We urge that Subchapter 17 be modified to specify the content of required disclosure forms rather than stating “on a form prescribed by the Commissioner.” These statements appear in the “Disclosure obligation” and “Documentation obligation” provisions in subsection 365:25-17-7 (a) concerning Best Interest Obligations. This modification could be done either by incorporating the full forms into the regulation as provided for in the NAIC Model Regulation or making specific reference to the NAIC Model Regulation exhibit forms.
Submitted via email to Ashley.Scott@oid.ok.gov
Ms. Ashley Scott
Government and Community Affairs Director
Oklahoma Insurance Department
400 Northeast 50th Street
Oklahoma City, 73105
RE: Proposed Rule Amendments to Title 365, Chapter 25, Subchapters 3 and 17
Dear Ms. Scott:
FACC, the Federation of Americans for Consumer Choice, appreciates the opportunity to comment on the proposed revisions to the above referenced rules relating to Consumer Protection in Annuity Transactions.
FACC commends the Oklahoma Insurance Department for moving forward to adopt the updated National Association of Insurance Commissioners (NAIC) Model Regulation #275. In particular, we applaud efforts by the Department to adopt the updated model regulation as drafted by the NAIC, thereby promoting uniformity and consistency across over thirty states that have now adopted the NAIC Model Regulation.
FACC and its members, 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 deviations so that companies and agencies operating across state boundaries can efficiently comply with the regulation and utilize uniform practices that most effectively serve consumer interests.
With that in mind, we would like to request one important modification to the proposed rules to help with further alignment with the NAIC Model Regulation, and also bring attention to an apparent oversight wherein the proposed rules do not include updated agent training requirements found in the updated NAIC Model Regulation:
- We urge that Subchapter 17 be modified to specify the content of required disclosure forms rather than stating “on a form prescribed by the Commissioner.” These statements appear in the “Disclosure obligation” and “Documentation obligation” provisions in subsection 365:25-17-7 (a) concerning Best Interest Obligations. This modification could be done either by incorporating the full forms into the regulation as provided for in the NAIC Model Regulation or making specific reference to the NAIC Model Regulation exhibit forms. The NAIC Model Regulation identifies these exhibit forms as Appendices A, B, and C. 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 promulgate these forms within the regulation itself. Such promulgation, or incorporation of the NAIC forms by reference, would ensure that Oklahoma is consistent with the NAIC Model Regulation in regard to disclosure requirements and provide certainty to regulated parties both now and into the future.
- We notice the proposed changes to Subchapter 3 do not contain updated training requirements found in Section 7 of the updated NAIC Model Regulation adopted in 2020. We now understand that may be an oversight and urge this be addressed prior to final adoption. Those changes in the NAIC Model Regulation address, among other things, required course content and training date deadlines for insurance producers. The proposed rules as written do not include either the new required course content or the training deadlines for existing versus new producers as prescribed by the NAIC Model Regulation. To ensure Oklahoma aligns with the NAIC Model Regulation and other states and Oklahoma derives the full benefits of the updated NAIC Model Regulation, we urge the Department to modify subchapter 3 to incorporate new NAIC training requirements for both existing and newly licensed insurance producers.
In closing, FACC wishes to emphasize on behalf of our members and our industry that we are very thankful for the Department’s leadership and pleased to see Oklahoma moving forward with adoption of this important regulatory update. Thank you again for the opportunity to comment.
Kim O’Brien, CEO