The National Association of Insurance Commissioners commended the American Council of Life Insurers this week for agreeing to support a measure to extend consumer protections in the sale of life insurance and annuities.
At a recent ACLI meeting, Jim Poolman, chair of the NAIC Life Insurance and Annuities (A) Committee, called for an expansion of suitability protections to consumers of all ages. Currently, protections are limited to persons over the age of 65.
“I commend the life insurance industry for their leadership in extending protections for all consumers who are planning for their security in retirement,” said Poolman, who is the the North Dakota commissioner of insurance. “The combination of state and industry support on this matter is a clear victory for consumers.”
In 2000, the NAIC adopted a white paper calling for the development of suitability standards for non-registered products, similar to those that had existed for some time under the Securities and Exchange Commission (SEC) for registered products. The result of that white paper was a working group that drafted a model setting suitability standards for all life insurance and annuity products.
The NAIC Life Insurance and Annuities (A) Committee decided to focus first on the area that had been identified as subject to the greatest abuse: the inappropriate sales of annuities to persons over the age of 65. The resulting Senior Protection in Annuity Transactions Model Regulation was adopted by the NAIC in 2003. Many states have adopted the suitability or similar suitability regulations to protect consumers where it was appropriate within their state laws.
“Problems once restricted to seniors are no longer confined to one age group, proving that protections must be expanded,” said Commissioner Poolman.
Source: The National Association of Insurance Commissioners