04.11.22

Maryland Adopts NAIC's Annuity Sales Standards

by: Allison Bell

The Maryland Insurance Administration has completed adoption of the annuity sales standards developed by the National Association of Insurance Commissioners (NAIC). The earlier suitability rule from the NAIC required annuity sellers to verify that an annuity sold to a consumer suited the consumer’s needs. The update requires annuity sellers to act in the best interest of the consumer but appears to allow an agent or broker to earn commissions or other compensation tied to sales volume from selling annuities. Maryland and New Mexico recently adopted similar suitability rule updates. Wisconsin lawmakers, meanwhile, have sent an update bill to the desk of Gov. Tony Evers. Some other states have adopted or tried to adopt a fiduciary rule approach, which would require an annuity seller to put the consumer’s interest first and might prohibit annuity sales commissions. A fiduciary rule approach could require most annuity sellers to collect fees from the buyers, rather than commissions from the sellers.

Read the full article on Think Advisor