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.
|
State |
Actual or Proposed Effective Date |
Status |
Notable Items |
|
Alabama |
January 1, 2021 |
Introduced regulatory proposal |
Does not use the term “best interest” |
|
Arizona |
January 1, 2021 |
Adopted |
|
|
Arkansas |
On date of commissioner’s signature |
Introduced regulatory proposal |
|
|
Delaware |
August 1, 2021 |
Introduced regulatory proposal |
|
|
Iowa |
January 1, 2021 |
Adopted |
|
|
Kentucky |
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 |
|
Maine |
Not known |
Introduced regulatory proposal |
Requires consumer signature on each page of disclosure document |
|
Michigan |
Six months after enacted into law |
Bill in process |
|
|
Nevada |
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 |
|
Ohio |
Six months after enacted into law |
Introduced regulatory proposal |
|
|
Rhode Island |
April 1, 2021 |
Adopted |
©2026 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.
Related Capabilities
Related People
Shareholder
