The NAIC model and many other states permit insurance companies and producers to utilize producer disclosures that are “substantially similar to NAIC Appendices A, B, and C.” Many insurers and producers are already using those disclosure forms in other states and it would help insurance companies and producers if Utah conformed to the NAIC model language. Specifically, we ask that the Rule be modified to say “the producer shall prominently disclose to the consumer on a form substantially similar to the 2020 NAIC Model #275 Suitability in Annuity Transactions Appendix A”. Parallel wording could be used for the other appendices as well. As you can appreciate, this is important to enable insurance companies and producers to utilize the same forms across all jurisdictions that have adopted the NAIC model.
Via Email to: tnorthrup@utah.gov
The Honorable Tanji Northrup
Deputy Insurance Commissioner, FLMI, CIE
Utah Insurance Department
4315 S. 2700 West, Ste. 2300
Salt Lake City, UT 84129
RE: Proposed Revisions to R590-230 v 09242023, Suitability in Annuity Transactions
Dear Deputy Commissioner Northrup:
Thank you for the opportunity to comment on your recently issued final changes to R590-230, Suitability in Annuity Transactions. FACC applauds the Department’s ongoing efforts to keep pursuing adoption of the 2020 NAIC Model Regulation to enhance consumer protection for the citizens of Utah. In doing so, Utah joins nationwide efforts to update industry sales conduct standards incorporating best interest obligations while maintaining regulatory flexibility that permits diverse delivery systems to continue providing a wide range of quality products for Utah consumers.
We also thank you for incorporating FACC’s suggestions we outlined in our previous comment submitted July 5, 2022, during your drafting process. We appreciate version R590-230 v 09242023 follows the 2020 NAIC Suitability Model nearly verbatim with one significant exception.
The NAIC model and many other states permit insurance companies and producers to utilize producer disclosures that are “substantially similar to NAIC Appendices A, B, and C.” Many insurers and producers are already using those disclosure forms in other states and it would help insurance companies and producers if Utah conformed to the NAIC model language. Specifically, we ask that the Rule be modified to say “the producer shall prominently disclose to the consumer on a form substantially similar to the 2020 NAIC Model #275 Suitability in Annuity Transactions Appendix A”. Parallel wording could be used for the other appendices as well. As you can appreciate, this is important to enable insurance companies and producers to utilize the same forms across all jurisdictions that have adopted the NAIC model.
We appreciate that the Department likely intends the prescribed forms to be the same as the NAIC forms, but we believe it is strongly preferable to expressly identify the referenced forms within the regulation itself. Such incorporation of the NAIC forms by reference would ensure that Utah is fully consistent with the NAIC Model Regulation in regard to disclosure requirements and provide certainty to regulated parties both now and into the future.
To address your question to comment on the cost/benefit of Utah’s proposed rule, we believe our request to incorporate specific reference to the NAIC Model or incorporating the actual forms themselves is important to ensure uniformity and consistency across many jurisdictions which makes implementation the most cost effective for industry and ultimately benefits everyone including consumers.
We trust the final adopted regulation will address this important change to remain aligned with the NAIC Model and our support is based on that expectation. Again, we thank you for the opportunity to comment.
Sincerely,
Kim O’Brien, CEO
