And insurers and distributors are implementing these processes without being dependent on Insurance Technologies to do it for them.Â. Anything that can be done to make the process easier for the agent and clearer for the customer will be a huge win in the wake of all the regulatory changes. References:
By Katherine Dease, Vice President of Product Management, Insurance Technologies. endstream
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Insurers and distribution firms need a defensible process that is error proof and guides the agent through the defined requirements including additional data collection, disclosures, and signatures. https://www.njconsumeraffairs.gov/Proposals/Pages/bos-04152019-proposal.aspx
h�b```f`` https://naic.org/documents/cmte_a_aswg_related_0219_cai_comments.pdf
Are you ready to comply? This is a critical part of the retirement plan. Regulation 187 (Part 224 of Title 11 of the Official Compilation of the State of New York) requires insurers set forth standards and procedures for recommendations to consumers with respect to annuity contracts so that the insurance needs and financial objectives of the consumers are appropriately addressed. They need to be nimble and able to adapt to the regulatory changes as they evolve. The regulation now states “consumer” means the owner or prospective owner of an annuity contract. Insurers and producers should prepare now for what will inevitably be a new future as other states, including Nevada, New Jersey and others, explore updating their own suitability rules. The goal is to set forth clear standards that put the consumer first where the advisor does not put compensation desires over the need of the consumer and requires the advisor to disclose any material conflict of interest. The standards will also require documentation explaining the basis for the recommended product and included features to ensure the consumer understands the products they are purchasing and why that product matches their needs, risk tolerance and objectives. For many years, annuity suitability standards varied greatly depending on whether the product was a fixed or variable annuity. The NAIC standards and procedures required insurers or insurance producers to make reasonable effort to collect financial details and investment objectives for the purpose of having reasonable grounds for recommending the annuity products to consumers. New life and annuity suitability regulations are coming at firms from all angles. New York was the first state to adopt a “best interest” regulation that adds to the existing NAIC and FINRA 2330 with a new level of requirements aimed to ensure the best interest of the consumer is enforced for both life and annuity sales. https://www.naic.org/cipr_topics/topic_annuity_suitability.htm
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Additionally, the SEC approved the Customer Relationship Summary Form (CRS Relationship Summary), which updates both the SEC’s 1934 Act and 1940 act and will now require investment advisors and broker dealers to disclose to the retail investor the relationship with the financial professional; including a summary of services provided, fees clients might pay, and any conflicts of interest.
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