Falls Church, VA (PRWEB) December 16, 2011
The National Association of Insurance and Financial Advisors submitted a comment letter to Federal Insurance Office Director Michael T. McRaith on the FIO’s Dodd-Frank required study on the modernization and improvement of insurance regulation.
NAIFA supported the creation of the FIO to provide a needed source of expertise on the insurance industry within the federal government. In this role, NAIFA believes FIO should:
- Educate federal regulators – from the Treasury Department to the Securities and Exchange Commission to the Department of Labor – about the insurance industry, how it works, and how it interacts with other financial industries
- Serve as an intermediary on regulatory matters between the insurance industry and federal and state regulators
- Review state insurance regulations and work with the states to eliminate redundant or inconsistent regulations.
“It’s important that our government officials really understand the industries they regulate, and the Federal Insurance Office has great potential to educate and inform those regulators whose decisions greatly affect consumers, advisors and the economy,” said NAIFA President Robert Miller. “While NAIFA continues our century long support of state insurance regulation, we believe there are areas where the status quo must change. We believe the FIO can play an important part in efforts to educate, coordinate, modernize and reform regulations. We look forward to working with the FIO and providing assistance whenever necessary.”
“Specifically, NAIFA encourages the FIO to share its expertise on the intricacies of the insurance business with SEC and DOL regulators as they consider fiduciary duty standards likely to impact insurance and financial advisors and their clients,” Mr. Miller added. “NAIFA members are Main Street insurance professionals helping middle-market clients save and invest while protecting against life’s inevitable risks of outliving one’s retirement savings, dying too soon, or becoming disabled. Any federal regulations that would hinder the ability of our members to continue to provide these critical services would be a disservice to the American public.”
In its comment letter, NAIFA provides input on the following proposals and issues:
Producer Licensing: NAIFA supports the enactment of NARAB II because it would allow insurance producers who are licensed to operate in multiple states to comply with a single set of non-resident licensing and continuing education rules.
Stranger-Originated Life Insurance (STOLI): NAIFA supports the elimination of STOLI transactions. STOLI undermines the integrity of life insurance and flouts the public policy concerns regarding wagering on human life that have been voiced by state legislatures and the U.S. Supreme Court.
DOL/SEC Fiduciary Standard of Conduct: FIO could play a role in a) better informing SEC and DOL regulators on the intricacies of the insurance business and b) ensuring the two agencies coordinate with one another and not impose redundant and/or inconsistent requirements on financial professionals.
Annuity Suitability: NAIFA strongly supports the NAIC Suitability in Annuities Transactions Model Regulation.
Annuity Disclosure: NAIFA is a strong advocate for the revised NAIC Annuity Disclosure Model Regulation and believes that uniform adoption of the NAIC Model will ensure that consumers have the relevant information they need in order to make the right annuity purchase decision.
Regulating the Use of Senior-Specific Designations: States have made great strides in the adoption of some form of prohibition on the use of senior-specific designations, but not all states have come on board, which is why NAIFA supported the inclusion of language in Dodd-Frank to establish an incentive grant program for the states to adopt the NAIC and NASAA models.
Interstate Compact: NAIFA strongly supports the Interstate Insurance Product Regulation Commission but is disappointed that some of the nation’s largest states have not joined the IIPRC, including California, New York and Florida.
Optional Federal Charter: NAIFA supports the concept of the optional federal charter provided that it meets the following three conditions: 1) true agent choice, 2) enhanced consumer protections, 3) single federal voice and preserve state regulation.
About NAIFA: NAIFA comprises nearly 600 state and local associations representing the interests of approximately 200,000 agents and their associates nationwide. NAIFA members focus their practices on one or more of the following: life insurance and annuities, health insurance and employee benefits, multiline, and financial advising and investments. The Association’s mission is to advocate for a positive legislative and regulatory environment, enhance business and professional skills, and promote the ethical conduct of its members.
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