NAIC Commissioners Racing The Clock To Finish Annuity Sales Model

The National Association of Insurance Commissioners creates model laws for states to pass.

A National Association of Insurance Commissioners' working group has one final meeting to finish its annuity sales rule, which would create a best-interest framework for states to consider adopting.

The Annuity Suitability Working Group will hold a two-hour conference call Tuesday that could run longer if that's what it takes to finish, an NAIC official said Wednesday.

According to the call invite members received, the working group "wants to finish its work and forward the draft to the Life Insurance Committee for its consideration at the end of this call," which would require a vote.

The group has held four two-hour calls so far to go over the rule line-by-line. Slow progress has been made, with members at times opting to "put a pin in it" in order to move past a controversial point.

After roughly 18 months of meetings, the group is in tentative agreement on a best interest-standard for annuity sales. It articulates a best-interest standard through the following four obligations: care, disclosure, conflict of interest and documentation.

But some significant issues still have pins in them:

The group is still lacking a strong consensus on whether to extend the annuity sales rule to in-force policies, a point that has been debated several times. And a conflict with state exemptions for equity linked annuities was brought up on a previous call and remains unresolved.

The group wants a model completed before the National Association of Insurance Commissioners' fall meeting the first week of December.

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.