AM Best believes life insurance companies’ regulatory burdens and costs could be eased by a recent court ruling overturning regulations geared toward increased consumer awareness in New York life insurance and annuity sales.
The state’s Supreme Court Appellate Division recently struck down the rules known as Regulation 187 as being unconstitutionally vague. In a new Best’s Commentary, “Regulation 187 Overturned by Division of New York Supreme Court,” AM Best notes that the ruling also could lead to more life insurance sales, though N.Y. regulators could still appeal the decision.
Regulation 187 had been in effect since August 2019 for annuities and February 2020 for life insurance. The regulation applied to sales transactions, as well as transactions involving in-force policies, to insure that such transactions or recommendations are in the best interest of the consumer and meet their financial objectives. Regulation 187 identified suitability information needed at the time of transactions; defined the duties of producers—and of insurers where no producer is involved; and included insurer responsibilities and supervision requirements to assure compliance.
To access the full copy of this commentary, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=308754.
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