For reasons explained herein, FACC must strongly oppose the proposal to amend Georgia’s suitability regulation as currently drafted. The current proposal attempts to create a “best interest” standard in a single sentence which FACC believes would be a serious mistake and would prove counterproductive as compared to adopting the newly revised NAIC Model Regulation in its entirety.
It is critical to recognize the term “best interest” is not self-defining and thus adopting such a shorthand version would invite uncertainty and confusion in the annuity marketplace. It would subject agent recommendations and insurance company oversight obligations to vague and inconsistent enforcement standards which would be wholly contrary to your stated purposes and ultimately harmful to providers and consumers transacting business in Georgia.
Submitted via email to: gconley@oci.ga.gov
RE: Amendments to Chapter 120-2-94: Suitability in Annuity Transactions
Dear Deputy Commissioner Conley:
FACC, the Federation of Americans for Consumer Choice, appreciates the opportunity to comment on the proposed revisions to Regulation Chapter 120-2-94 entitled “Suitability in Annuity Transactions.”
FACC wishes to commend the Office of the Commissioner for moving forward to adopt the updated National Association of Insurance Commissioners (NAIC) Model Regulation #275. In particular, we applaud efforts by the Office of the Commissioner to adopt the model regulation in full in lieu of the originally proposed amendment using only a shorthand version as introduced last August.
FACC and its membership, consisting of independent distributors selling mostly fixed annuity products, believe the NAIC Model Regulation provides strong consumer protection while at the same time preserving consumer choice through well-balanced thoughtful regulatory requirements consistent with different delivery systems in the marketplace. We have long held that it is important for states to uniformly adopt the model requirements without unnecessary deviations so that companies and agencies operating nationally can efficiently comply and establish uniform practices which in the longer run will most effectively serve consumer interests.
The Georgia Office of the Commissioner is to be commended for taking this approach which will serve to modernize existing regulations, while following along the same path as 29 other states so far, which we believe ensures the best interests of all Georgians are protected.
Sincerely,
Kim O’Brien, CEO
