On Monday, Jan. 22, NAFA submitted a comment letter to the NAIC, Annuity Suitability Working Group in response to their request for feedback on proposed revisions to the NAIC Suitability in Annuity Transactions Model Regulation (#275). The proposed draft would amend the current model rule to include a new Best Interest Standard of Conduct. NAFA’s comment letter discusses in detail concerns regarding the proposed revisions, primarily focusing on the difficulty of supervising – and ensuring – producer compliance with a best interest standard that is inherent in the independent agent distribution system – under which the fixed annuity industry largely operates.
NAFA’s Government and Legal Affairs Committee created a working group in July 2017 to address the NAIC’s intent to amend the suitability model rule. Members of this working group have had the opportunity to meet several times with members of the NAIC’s Working Group to discuss in person the interests and concerns of NAFA membership. NAFA looks forward to continuing to collaborate with the NAIC as it moves through the drafting process. A copy of NAFA’s comment letter is available HERE.