The Nebraska Department of Insurance (NDOI) published on Oct. 8 a bulletin answering frequently asked questions about the new annuity training requirements.
The NDOI, as well as nearly every state, requires producers who sell annuity products to complete state-specific levels of product suitability training, based on regulation recommendations included in the National Association of Insurance Commissioners (NAIC)'s Suitability in Annuity Transactions Model.
The Big “I” worked extensively with the NAIC over the last two years to improve the model, before it was introduced in the Nebraska Legislature this year.
This model was updated at the federal level early in 2020 to a "Best Interest" standard of producer and insurer conduct, clarifying that all recommendations by agents and insurers must be in the best interest of the consumer and that agents and carriers may not place their financial interest ahead of the consumers’ interest in making a recommendation.
To satisfy the best interest standard, a producer or an insurer must satisfy four obligations: 1) care; 2) disclosure; 3) conflict of interest; and 4) documentation.
The Nebraska Legislature is one of at least 11 state governments that have adopted these model revisions. LB 22 titled “Change provisions of the Nebraska Protection in Annuity Transactions Act” was introduced in January by Sen. Matthew Williams and approved by Gov. Pete Ricketts in April.
The changes made to the Nebraska Protection in Annuity Transactions Act by LB 22 shall apply to solicitations occurring on and after Jan. 1, 2022.
These revisions require producers licensed to sell annuity products complete additional training.
Any producer who has completed an approved annuity training course prior to July 1, 2021, is required to complete either of the following by Dec. 31, 2021:
- a new four-credit annuity best interest training course
- OR an additional one-time, one-credit annuity best interest training course
The course needs to have been approved by the NDOI and provided by a Nebraska-approved continuing education provider on appropriate sales practices and replacement and disclosure requirements under the Nebraska Protection in Annuity Transactions Act.