(DeWitt, New York, March 1, 2018) - Big I New York met with representatives of the DFS last week to discuss its concerns with the departments proposed rules which would add new requirements for insurance producers that sell life insurance in the state. The association has also submitted a comment letter to the DFS that outlines the concerns raised at the meeting and which offers specific suggestions for amending the proposed rules.
In December DFS proposed changes to Insurance Regulation 187 that would add a new best interests standard to the sale of all life insurance products and annuities and would apply the same suitability analysis currently in place for annuities to all life insurance transaction. The department suggested the changes after rules from the federal Department of Labor that establish a best interests standard for retirement products was placed on hold.
While Big I New York supports the departments goal of protecting consumers, it is concerned that the proposal would make buying life insurance more complicated for consumers and lead to fewer individuals buying these important policies that protect families from financial ruin when a love one dies, said Big I New York Chair of the Board Rich MacDonald, CPCU, ARM, AIM. He explained that New York already has several regulations on the books that are designed to protect consumers who purchase life insurance and insurance producers consistently follow these rules. More rules are unnecessary and may have unintended consequences harmful to consumers.
One suggestion the association offered to DFS was to exclude straight forward products such a term and group life insurance from the proposal, which is more appropriately designed for more complicated annuity and life products.
The association also made suggestions to ensure the insurance producers can still easily process policyholder requests to make changes to their policies and that producers can still provide informational materials to their customers that help them understand their policies better.
We look forward to continuing to work with the department as they consider comments on this important proposal, said MacDonald.
The Department will be reviewing many comments submitted by the life and annuity industry in the new few weeks.
To read our full recommendations/submitted comments, click here.