The National Association of Insurance Commissioners is still working on a new model act to ensure the suitability of annuities even though some people were questioning the need for such an act. This information comes from insurancenewsnet‘s article “Plan for New Annuity Model Continues at NAIC.” The model currently being used is from 2006 and called Suitability in Annuity Transactions Model Regulation. According to Sean Dilweg, the Wisconsin Insurance Commissioner and chairman of the Suitability in Annuity Transactions Model Regulation, a new plan is necessary to keep up with recent changes in the marketplace and new regulations.
Insurance companies would be held more accountable for ensuring the suitability of their annuity products whereas they currently can pass that responsibility off to either third parties or the broker-dealers. The new model is applied to all consumers, regardless of their age. Fixed annuity rates and policies must be proven to be the best option for each individual customer as do the variable annuity policies. The new model is similar to practices already put in place by the federal government for broker-dealers and other advisers regarding variable annuities.