By: Chris Dickinson, Senior Principal
August is right around the corner, and with it comes the first phase of New York Insurance Regulation 187. Also known as “Suitability and Best Interests in Life Insurance and Annuity Transactions,” the state’s newest regulation will directly impact all annuity insurance carriers based in New York, requiring that any life insurance policy or annuity contract transaction (whether initial purchase or in-force) performed with in-state customers be made in the client’s best interest. This “best interest” standard will first go into effect for annuities on August 1, 2019, with rules about life insurance products coming into play on February 1, 2020. Although the new rule may seem simple on the surface, carriers may find themselves struggling to meet some of the new demands placed on their businesses. With change on the horizon, insurers may ask themselves, “Am I ready for Regulation 187?”
Answering this question requires multiple in-depth analyses of various areas of the organization, including sales, suitability, new business, and services. Processes designed to meet Regulation 60 (which will still be in place after August first) likely won’t meet the requirements of Regulation 187. The amount of information an insurer will now need to learn about and share with their customers will make a transition into a two-step system nearly inevitable. Organizations will need to devise a clear strategy for minimizing the expansion’s impacts. These represent only a few of the many concerns that organizations will need to consider as they prepare for this regulation.
What do you think about Regulation 187?