The National Association of Insurance Commissioners (“NAIC”) issued a press release on October 12, 2011 announcing, among other things, amendment to the Annuity Disclosure Model Regulation (#245) (the “Model”), adopted by a joint executive/plenary session. The amendments are designed to improve disclosure and reduce consumer confusion regarding annuity purchases.
Among other things, the amended Model:
- Provides uniform guidance on developing consumer disclosures to inform consumers about how annuity products work;
- Requires that consumers receive a buyer’s guide when purchasing an annuity;
- Improves requirements with respect to illustration development; and
- Requires that customers be provided with an explanation of any riders, along with penalties that apply to withdrawals, and well as information about the tax treatment of annuities.
