Which Thoroughbred Will Win the Standards of Care Derby?
June 25, 2018
While New York was fast out of the gate, and is pushing to have its version used by all states, it is not a sure bet that New York has the stamina to go the distance. The New York version is saddled with many extra bells and whistles impacting this horse’s endurance. While the NAIC stumbled out of the gate after the Fifth Circuit vacated the DOL Rule, it is picking up speed.
Those placing bets should consider the differences between the two horses that will likely impact which one will win the crown:
- New York’s has a broader scope by including life insurance, while the leaner NAIC stallion is focusing only on annuities.
- New York’s insists on including prudence within its standard of care; several regulators were concerned about including this terminology in the NAIC version.
- New York’s imposes additional requirements not included in the NAIC’s version including: (1) insurer-provided comparison of fee-based and commission-based versions of products; (2) insurer prevention of incentives which would cause producers to make recommendations that are not in the best interest of the consumer; and (3) insurer procedures designed to prevent financial exploitation and abuse.
As the NAIC and New York continue to jockey for position and consider input from the crowd, ultimately, the true champion will be the horse that can deliver meaningful consumer protection in a manner the industry can implement.
©2024 Carlton Fields, P.A. Carlton Fields practices law in California through Carlton Fields, LLP. Carlton Fields publications should not be construed as legal advice on any specific facts or circumstances. The contents are intended for general information and educational purposes only, and should not be relied on as if it were advice about a particular fact situation. The distribution of this publication is not intended to create, and receipt of it does not constitute, an attorney-client relationship with Carlton Fields. This publication may not be quoted or referred to in any other publication or proceeding without the prior written consent of the firm, to be given or withheld at our discretion. To request reprint permission for any of our publications, please use our Contact Us form via the link below. The views set forth herein are the personal views of the author and do not necessarily reflect those of the firm. This site may contain hypertext links to information created and maintained by other entities. Carlton Fields does not control or guarantee the accuracy or completeness of this outside information, nor is the inclusion of a link to be intended as an endorsement of those outside sites.