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A Working Alternative to a Principles-Based Standard Subject to Judicial Interpretation

Phoenix, AZ, October 4, 2018 – Members of the FACC Campaign have been working to develop an alternative to the NAIC Suitability Working Group’s proposal to regulate a best interest standard that is stronger for consumers by protecting their access to affordable insurance representation. 

The FACC Campaign remains steadfast in its belief that the NAIC should not modify the model suitability law and instead focus its efforts on improving consumer protection through better communication between agents and policyholders.  Rather than modifying a standard of care that works well in our industry, the FACC Campaign recommends that the NAIC should focus on “rules and tools” that would improve consumer interactions in the marketplace and their understanding of their financial or insurance professional’s role and duties to them. 

The FACC Campaign has developed a concept proposal that modifies the NAIC Model Annuity Disclosure Regulation to include:

  • Client Relationship Summary (CRS) document similar to what the SEC is considering but tailored to the insurance industry.
  • Notice of Producer Compensation giving consumers the opportunity to get detailed information about agent compensation, incentives, and conflicts.
  • Improved disclosure and restrictions on non-cash compensation.   

The FACC Campaign has shared its draft template of the Client Relationship Summary with Commissioners on the Suitability Working Group and the A Committee in an effort to show how this kind of tool could work to give consumers the power of more information, give agents the framework to communicate about compensation and conflicts, and create a more virtuous marketplace that facilitates better flow of information and alignment of consumer and agent interests.  The FACC Campaign believes this approach could be a win-win-win for consumers, agents, and regulators.  

While, appreciating that the NAIC continues to concentrate on developing a “best interest” proposal which will be the focus of their upcoming meeting in Chicago in late October, the FACC Campaign continues to advocate that the NAIC take a pause, consider alternative approaches such as our concept proposal, and avoid rushing towards a new model law that runs the risk of overshooting and thereby harming our industry and consumers.  A copy of the Client Relationship Summary can be found at

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If you would like more information about this topic, please contact Kim O’Brien at 414-332-9312, email, or visit

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