The Feds May Fast-Track Strict Annuity Suitability Laws
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A Wall Street Journal article published on
March 26, 2010 quotes Senate Banking Committe Chairman, Christopher Dodd, as saying, “It is my hope that shortly after our return on the second week of April that we will come to the floor of the U.S. Senate to debate, hopefully a full-throated debate, about how we reform the financial services sector of our nation.”
If this bill passes, the stronger, tighter, NAIC Suitability in Annuity Transactions Model Regulation passed on March 28, 2010 may become immediately effective in all 50 states.
Here is a quote from page 966 of the Senate’s Restoring American Financial Stability Act of 2010: …adopted rules with respect to fiduciary or suitability requirements in the sale of annuities that meet or exceed the minimum requirements established by the Suitability in Annuity Transactions Model Regulation of the National Association of Insurance Commissioners (or any successor thereto);
Page 1427 from the House’s Wall Street Reform and Consumer Protection Act of 2009 that passed on December 17, 2009 states: “SUITABILITY AND SUPERVISION RULES FOR ANNUITY PRODUCTS. A State shall have adopted rules that govern suitability requirements in the sale of annuities which shall meet or exceed the minimum requirements established by the National Association of Insurance Commissioners Suitability in Annuity Transactions Model Regulation in effect on the date of the enactment of this Act, or any successor thereto.”
Does this mean that insurance companies and annuity producers may have to be ready for these new laws by June first? Probably not, but they will almost certainly be in effect in most states this year.