The New York Department of Financial Services (DFS) amended Insurance Regulation 187 (Reg 187) to elevate the existing suitability standards for both life insurance and annuity sales by expanding obligations to act in the customer's best interest, improving transparency in consumer disclosures, and establishing clear lines of accountability for producers and insurers in the sales of both life insurance and annuities. Reg 187 applies to both new sales recommendations and in force policy transactions, and also requires insurers to create internal procedures to recognize and prevent the financial exploitation of senior consumers.
Bottom line: Carrier and producer sales practices must prioritize the customer’s interest over sales commissions and should not allow compensation to influence a product or transaction recommendation.
Reg 187, entitled, “Suitability and Best Interests in Life Insurance and Annuity Transactions,” establishes standards of conduct for insurance producers, broker-dealers, and registered representatives licensed in New York to sell life insurance and annuity products, and requires them to act in a competent and trustworthy manner towards all consumers, keeping consumer best interests ahead of personal remuneration for any new or in-force transactions. This regulation was expanded in the state's efforts to ensure that insurance products sold to NY consumers appropriately address the insurance needs and financial objectives of the consumer at the time of the transaction.
The regulation applies to licensees authorized to transact life insurance and/or annuity business, and requires training on Reg 187 specifics to be completed within the following time frames:
Resident producers in New York who hold non-resident licenses in any other state should be aware that completion of Regulation 187 training DOES NOT meet the NAIC Model’s definition of “substantially similar” annuity suitability training; and therefore, DOES NOT satisfy non-resident annuity suitability training requirements in any other state.
Insurers—including fraternal benefit societies—have a duty and obligation to establish standards and procedures for recommendations to consumers, with respect to policies delivered or issued for delivery in New York, so that transactions defined in the Regulation are in the best interest of that consumer and appropriately address the insurance needs and financial objectives of the consumer at the time of the transaction.
A.D. Banker & Company offers 3 courses for insurance CE credit:
The Life & Annuity Best Interests-Reg 187 webinar does not require a NY proctor or exam to count for CE credit.
An additional training option, Reg 187 Best Interests, is available online. This non-CE course does not require a proctor and includes a shorter assessment exam, a perfect option for those interested in an online solution without the need for CE credit. Completions are verified with a certificate of completion and can be monitored in CE Tracking. Please contact customer service or your Account Manager for more information.