IMPORTANT New NAIC Suitability Model Regulation Requirements
The National Association of Insurance Commissioners (NAIC) recently enacted revisions to the Suitability in Annuity Transactions Model Regulation (#275). This new regulation, effective January 1, 2021, will impose new requirements on both producers and insurers. As an annuity carrier, we want to make sure you’re aware of key aspects of the new regulation.
Below, you will learn about actions you need to take in order to meet your Best Interest Obligations.
Required training
As states adopt the regulation, there will be new regulatory training requirements. As of this date, Iowa and Arizona have adopted the regulation with a January 1, 2021 effective date.* If you were licensed in either state before January 1, 2021 and have completed model law training for the previous rule, you must complete the 1-hour best interest supplemental training course or the new 4-hour training course. For those licensed on or after January 1, 2021, the new 4-hour training course will be required.
If you have completed the previous model law course, the following rules apply:
- Iowa: The 1-hour supplemental course must be taken prior to July 1, 2021. Iowa has approved both the 1-hour and 4-hour courses, and they are available now.
- Arizona: The 1-hour supplemental course must be taken prior to June 30, 2021. Arizona has approved the 1-hour course, which is available now. The new 4-hour course has also been approved but will not be available until January 1, 2021.
Training is available through the RegEd platform. Once completed, RegEd will notify Athene that you have satisfied your requirement. While Athene will accept training through other platforms, you will need to provide Athene with proof of completion.
* We will continue to update you as additional states adopt the new regulation and approve training courses. Pending states include: AL, AR, ID, KY, MA, ME, MI, NV, OH and RI.
Material and forms updates
To comply with the regulation, we’ve also updated the following materials and suitability forms:
Revised – Materials:
- A step-by-step guide to completing Athene’s Suitability Worksheet (20543)
- Suitability Guidelines for Producers (52264)
- Doing Business with Athene Producer Guide (19608)
- Athene’s Position and Guidelines on Replacements (19532)
Please note: Athene’s position on Annuity Suitability (form 52266) has been retired. This information can now be found in our Doing Business with Athene Producer Guide (form 19608).
Revised – Suitability forms:
- Rate Comparison Worksheet (22216, Ver. 12/20):
- Customer Identification and Suitability Confirmation Worksheet (17341, Ver. 12/20)
The revised forms listed above will be required in all states (except FL and NY), whether the new suitability regulation has been adopted or not.
New – Suitability form:
The new Model Regulation also requires the use of an Insurance Agent [Producer] Disclosure for Annuities form, often referred to as Appendix A. For your convenience, we’ve created a version of Appendix A (22712, Ver. 12/20) for you to use.
Athene will require a version of this form (Athene’s form or another version that matches the regulation’s prescribed form) to accompany all applications submitted in states that have adopted the new regulation. This form will need to be signed by both the producer and customer.
Important processing dates
- Applications signed on or after January 1, 2021, OR received on or after January 14, 2021, will require the revised Rate Comparison and Customer Identification and Suitability Confirmation Worksheets. For states that have adopted the new regulation, Appendix A will also be required.
- Applications signed on or before December 31, 2020, AND received on or before January 14, 2021, will require the old Rate Comparison and Customer Identification and Suitability Confirmation Worksheets.
Please note: Electronic applications initiated prior to, but not yet e-signed by market close (3 p.m.) December 31, 2020 will require both revised worksheets and Appendix A (if applicable).
The new and revised forms will be available on Athene Connect beginning January 1, 2021 for all states except Florida and New York. Applications with outdated or missing forms that do not fall within the guidelines above will be considered “not in good order.” Be sure to use up-to-date materials when offering Athene annuities.