NY’s Suitability Rule Would Have Sweeping Impact on Life Insurers: Law Firm

Carlton Fields’ Financial Services – Regulatory Practice Chair, Ann Black and attorneys Jamie Bigayer and Adriana Perez analyzed a new proposed version of New York State’s Suitability in Annuity Transactions regulation. Life Annuity Specialist cited their analysis in the article, “NY’s Suitability Rule Would Have Sweeping Impact on Life Insurers: Law Firm.”

The proposed rule would be applicable to life insurance policies as well as in-force policies. It would require insurers to “establish and maintain procedures designed to prevent financial exploitation and abuse…[i.e.,] the improper use of an adult’s funds, property, or resources by another individual, including fraud, false pretenses, embezzlement, conspiracy, forgery, falsifying records, coerced property transfers or denial of access to assets,” according to the attorneys’ analysis. At the same time, the attorneys pointed out, the proposed rule fails to offer carriers the tools to help them prevent abuse, such as the ability to delay disbursement of funds if the insurer has a reasonable belief that the disbursement would result in financial exploitation, they wrote.

Another noteworthy item in the proposed rule is the change to the definition of “recommendation,” which now includes communications with the consumer, which they interpret to be advice and “any act intended to result in a consumer entering into or refraining from entering into a transaction,” they wrote.

According to the article, it is likely the New York Department of Financial Services will publish additional amendments and try to finalize this regulation by the end of the summer, with an effective date next year.

©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.