NU Online News Service

The board of the American Council of Life Insurers will urgestates to extend product suitability standards for annuities to allconsumers, not just older consumers.

The current Senior Protection in Annuity Transactions modelregulation adopted by the National Association of InsuranceCommissioners, Kansas City, Mo., extends suitability protectiononly to consumers ages 65 and older.

North Dakota Insurance Commissioner Jim Poolman recently said ata conference sponsored by the ACLI, Washington, that he intends toopen up the NAIC model and extend protections in the model to allannuity purchasers.

Poolman spoke after Robert Glauber, chairman of the NationalAssociation of Securities Dealers, Washington, asked in an earlierspeech why the suitability model protects only older annuitypurchasers.

"Last year, we demonstrated our commitment to consumerprotection with our support for the Senior Protection Model, whichhas been adopted in a number of states," ACLI President FrankKeating says in a statement about the group's decision to support abroader suitability model. "We are taking one step further now,advocating that the insurance needs and financial objectives ofconsumers of all ages who purchase annuities are carefullyconsidered."

Linda Lanam, ACLI vice president-annuities, says ACLI will beginworking with states immediately on efforts to revise laws andregulations based on the model.

The process will vary from state to state, depending on whatstate insurance commissioners want to pursue and how suitabilitymeasures are put in place, Lanam says.

Today, 11 states have some version of the NAIC model in place,with very few states adopting it verbatim, Lanam says.

Kansas, for example, enacted the model without reference to age,Lanam says.

Some states may feel that the Unfair Trade Practices Act givesthem enough authority to take action when needed, Lanam says.

And whether states need to make changes through a new law orregulation or can simply amend a regulation or issue a bulletin isalso a factor that will affect getting the broader coverage inplace, Lanam says.

Lanam cites Wisconsin as an example of a state that requiresenactment by statute.

The National Association of Insurance and Financial Advisors,Falls Church, Va., has repeated an earlier statement expressingsupport for the current, narrower model.

"At this point, it is not clear to NAIFA that a problem in theunder-65 marketplace has been demonstrated," NAIFA says