New York State’s top financial watchdog proposed regulations that would require sellers of life insurance and annuities to act in the best interest of clients, raising standards even as the U.S. government delays its fiduciary rule.
Products that best fit clients would have to be offered before those that are most profitable to the sellers, the New York Department of Financial Services said Wednesday in a statement.
President Donald Trump’s administration has delayed implementation of parts of the Department of Labor’s fiduciary rule that was created during Barack Obama’s presidency, adding to uncertainty about the regulation’s future. The rule would raise the standards for sellers and was expected to add to compliance costs for firms. New York joins states such as Nevada that have looked to impose similar regulations.
“As Washington continues to ignore and roll back efforts to protect Americans, New York will continue to use its role as a strong regulator of the financial services and insurance industries to fight for consumers and help ensure a level playing field,” New York Governor Andrew Cuomo said in the statement.
The proposed rules are subject to a 60-day comment period before being officially issued. The Life Insurance Council of New York, an industry group, said it was reviewing the proposal and has the same goal to protect consumers.
“We do have serious concerns about implementing any regulations that will result in an unfair playing field for New York’s life insurance companies,” the group said in an emailed statement. “Any implemented regulation should be uniform across the country, so companies do not face different standards in different states.”
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