Expect Focus Life, Annuity, and Retirement Solutions, December2020

New Year, New Duties in the Sale of Annuities

Life, Annuity, and Retirement Solutions   |   Financial Services Regulatory   |   Securities & Investment Companies   |   December 15, 2020

It looks as if 2021 will be a busy year as states move to implement the NAIC 2020 revisions to the Suitability in Annuity Transactions Model Regulation (Model 275), or other duty of care measures. The below chart outlines the actual or proposed state activity, its status, and notable items insurers need to consider. As 2021 continues, more states are expected to revise their standard of conduct requirements.


Actual or Proposed Effective Date


Notable Items


January 1, 2021

Introduced regulatory proposal

Does not use the term “best interest”


January 1, 2021




On date of commissioner’s signature

Introduced regulatory proposal



August 1, 2021

Introduced regulatory proposal



January 1, 2021




July 1, 2021

Introduced regulatory proposal

Includes consultants

Does not exclude general communications to the public, general information and tools, or other product and sales material from the definition of “recommendation”

Eliminates subjective standards such as “reasonable basis” and “reasonably appropriate”

Requires insurer to maintain records of the information collected from the consumer


Not known

Introduced regulatory proposal

Requires consumer signature on each page of disclosure document


Six months after enacted into law

Bill in process



Not known

Introduced regulatory proposal in 2018, but refreshed proposal in 2020

Different structure than NAIC Model

Includes prudence

Slightly different consumer information to be obtained, including whether potential surrender charges, tax implications, and penalties could be incurred in connection with the funds used to purchase the annuity

Requires training on financial exploitation of seniors and other vulnerable adults

Requires establishment of supervision system by producers

Safe Harbor limited to compliance with FINRA


Six months after enacted into law

Introduced regulatory proposal


Rhode Island

April 1, 2021





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