New Suitability Model Regulation Effective 01/01/21

The National Association of Insurance Commissioners (NAIC) recently enacted revisions to the Suitability in Annuity Transaction Model Regulation (#275). As an annuity carrier, we want to make sure you’re aware of key aspects of the new regulation that may affect how you do business going forward.

Although you should familiarize yourself with the entire regulation, we wanted to share with you the following excerpt from NAIC’s new best interest standard.

Contests, quotas, bonuses and other non-cash compensation:

The insurer shall establish and maintain reasonable procedures to identify and eliminate any sales contests, sales quotas, bonuses, and non-cash compensation that are based on the sales of specific annuities within a limited period of time. The requirements of this subparagraph are not intended to prohibit the receipt of health insurance, office rent, office support, retirement benefits or other employee benefits by employees as long as those benefits are not based upon the volume of sales of a specific annuity within a limited period of time.

As stated in the NAIC drafting note, the intent of the above provision is to prohibit sales contests, quotas, bonuses and non-cash compensation based upon volume of sales of a particular product within a limited period of time.

Remember, it is your obligation to know the requirements of your Athene contract, as well as the laws and regulations of any state in which you conduct business. Failure to comply with applicable regulations may lead to disciplinary action and may be grounds for termination of your appointment and/or contract with Athene.