Annuity Transactions and Protecting Ohio Insurance Consumers
by Judith L. French, Director
Our objective at the Ohio Department of Insurance is to protect the state's insurance consumers. We do this in many ways, including around annuity products.
An annuity can be a complicated insurance and investment product and requires thoughtful alignment with a policyholder's age, income, and other needs to benefit the policyholder over time. To help ensure this happens, we have been deeply involved through our National Association of Insurance Commissioners (NAIC) work in crafting an enhanced annuity transactions model regulation with stronger consumer safeguards for implementation by all states. Earlier this year, Ohio was one of the first states to adopt the regulation.
The regulation clarifies that all recommendations by insurance agents and insurance companies must be in the best interest of the consumer and that agents and companies may not place their financial interest before the consumer’s interest. Agents and companies are required to act with reasonable diligence, care, and skill in making recommendations to consumers. Also incorporated is a “best interest” standard mandating agents and companies satisfy requirements outlined in a care obligation, disclosure obligation, conflict-of-interest obligation, and documentation obligation.
As part of the regulation enhancement, agents must complete specific training requirements by Aug. 14, 2021 prior to engaging in the sale, solicitation, or negotiation of annuity products in Ohio. We have created a questions and answers page on our website to provide training clarity for agents. Our Licensing Division team is also available to answer questions.
Gaining familiarity with the annuity rule and products is just as important for consumers. I encourage consumers to read the rule and to utilize our life and annuity insurance guide. The department's insurance product experts are available at 1-800-686-1526 for those who have questions.
|
