NAIFA Board Votes to Support Application of Suitability Protections in Annuity Sales to All
February 24, 2006 – The Board of Trustees of the National Association of Insurance and Financial Advisors (NAIFA) voted this week to support application of a National Association of Insurance Commissioners (NAIC) model law protecting seniors in annuity transactions to annuity purchasers of all ages.
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For several years NAIFA has worked closely with the American Council of Life Insurers (ACLI) to encourage states to promulgate the NAIC's Senior Protection in Annuity Transactions Model Regulation. The model requires that recommendations of annuity sales to consumers ages 65 and older be based on information of the customer's financial situation. The model also requires a system be put in place to supervise those recommendations.
Last month the ACLI announced it would urge states to extend to all consumers the protections contained in the senior model and asked NAIFA to consider a similar position.
“The ACLI and NAIFA recognize how vitally important it is that our groups work together to provide the best environment possible for consumers to plan for their long-term financial protection and retirement security,” said David F. Woods, CLU, ChFC, LUTCF, NAIFA chief executive officer. “With that said, NAIFA staff, our Policy Formation Subcommittee and the Board of Trustees considered the ACLI request, and agreed that extending the model to all annuity purchasers is appropriate.”
Woods added: “We look forward to continue working with ACLI and our state associations to facilitate adoption of these standards in the state legislatures.”
About NAIFA: Founded in 1890 as the National Association of Life Underwriters, the National Association of Insurance and Financial Advisors comprises 800 state and local associations representing the business interests of 225,000 members and their employees nationwide. Members focus their practices on one or more of the following: life insurance and annuities, health insurance and employee benefits, multiline, and financial advising and investments. NAIFA's mission is to advocate for a positive legislative and regulatory environment, enhance business and professional skills, and promote the ethical conduct of its members. NAIFA's website can be accessed at www.naifa.org.