FACC would like to make one suggestion to the Department which is to promulgate another rule that would specify content of the required disclosures referenced in the updated statutes consistent with the NAIC Model Regulation as set forth in Appendices A, B, and C. HB 1120 provides that the Department shall post the Appendices on its website which FACC presumes will be the same forms as provided in the NAIC Model Regulation. FACC requests the Department consider adopting the NAIC appendices through a regulation that could lay out the sample forms or incorporate the NAIC forms by reference. Such promulgation, or incorporation of the NAIC forms by reference, would ensure that Washington is consistent with the NAIC model regulation in regard to disclosure requirements and provide certainty to regulated parties both now and into the future.
Submitted via email to: RulesCoordinator@oic.wa.gov
Michael Walker
Senior Policy Analyst
Policy and Legislative Affairs Division
Washington State Office of the Insurance Commissioner
RE: R2023-5 Best Interest Standard for Annuities
Prepublication Draft of WAC 284-17-265 and 284-23-390
Dear Mr. Walker:
FACC, the Federation of Americans for Consumer Choice, appreciates the opportunity to comment on the proposed updates to WAC 284-17-265 and WAC 284-23-390 relating to best interest obligations for annuity sales in Washington.
FACC wishes to commend your office for proposing these regulations to complete adoption of updates to the NAIC Model Regulation on Suitability in Annuity Transactions (#275). FACC was pleased the Washinton state legislature adopted HB 1120 bringing state statutes into alignment with the updated NAIC Model Regulation and we appreciate the Department now moving forward to complete the effort with adoption of these proposed rules.
FACC believes that it is particularly helpful that those provisions from NAIC Model Regulation Section 6.C. subsections 2 to 4 relating to insurer supervision have been incorporated into the corresponding rule WAC 284-23-390. Those sections were carefully crafted to fit and complement other parts of these newly updated requirements and will help ensure the overall construct of the newly updated rules will be workable.
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 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.
FACC would like to make one suggestion to the Department which is to promulgate another rule that would specify content of the required disclosures referenced in the updated statutes consistent with the NAIC Model Regulation as set forth in Appendices A, B, and C. HB 1120 provides that the Department shall post the Appendices on its website which FACC presumes will be the same forms as provided in the NAIC Model Regulation. FACC requests the Department consider adopting the NAIC appendices through a regulation that could lay out the sample forms or incorporate the NAIC forms by reference. Such promulgation, or incorporation of the NAIC forms by reference, would ensure that Washington is consistent with the NAIC model regulation in regard to disclosure requirements and provide certainty to regulated parties both now and into the future.
In closing, FACC wishes to commend Department staff for their continuing commitment to adoption of updates to the NAIC Model Regulation incorporating best interest obligations for annuity sales which we believe will serve Washington industry and consumers well. Thank you again for the opportunity to comment.
Sincerely,
Kim O’Brien, CEO
