New NAIC Suitability Model Regulation Changes Effective April 1 for Annuities Sold in Arkansas
Arkansas has adopted the new NAIC model regulation. The biggest component of this regulation includes the adoption of the Best Interest Standard of Care, requiring financial professionals to act in the best interest of the consumer when recommending annuity products.
Product and state training requirements
Arkansas now requires you to complete carrier-specific product training courses, and/or a best interest annuity training course, prior to soliciting annuity sales. The product training gives you an adequate level of understanding about annuities in general and about the carrier specific products. The state training includes the new standard of care sales practices.
Financial professionals who completed a 4-hour annuity suitability course prior to January 1, must complete either a new one-time 4-hour best interest suitability training course, or an additional one-time 1-hour best interest suitability training course. See chart below for effective dates. Financial professionals who obtain a life insurance license on or after April 1, must complete the new one-time 4-hour course before selling annuities.
All training vendors are working on adding both the new 1-hour and 4-hour training courses that meet the new 2020 regulation requirements. If you’re completing this training via RegEd, the courses are titled Recommending Annuities Under the NAIC Best Interest Standard (Course 490) and Recommending Annuities Under the New NAIC Best Interest Standard – One Hour Update (Course 491). If training is not completed through RegEd, a certificate of completion must be sent to Sales Compensation Administration to prove training has been completed.
Arkansas:
- Effective date
- New reps: 04/01/2021
- Existing Reps (those who completed a prior version of the NAIC Model Regulation training): 07/01/202
- Model Regulation State Training Requirement:
- New reps: New 4-hour NAIC Best Interest course prior to sale.
- Existing reps: If the prior version of the Model Regulation training has been completed already then you can choose to complete one of the following: New 1-hr NAIC Best Interest course OR New 4-hr NAIC Best Interest course
- Effective date of carrier specific product training: 07/01/2021
State reciprocity
The model regulation indicates that if you complete the best interest annuity training for one state, it may satisfy the training requirements needed for another state that has adopted the same model regulation. Arkansas does allow reciprocity with this new model regulation.