Insurance and financial planning groups are split over whether regulators should expand guidance tied to the NAIC best-interest annuity sales rule. Trade groups say the current framework works, while the Certified Financial Planner Board of Standards says the model rule does not reach a true fiduciary standard.
The comments were submitted to the NAIC’s Annuity Suitability Working Group. The group is working to create more uniform compliance with the best-interest annuity sales model revision adopted in February 2020.
The issue gained more attention in March 2024, when Iowa Insurance Commissioner Doug Ommen said compliance reviews had found deficiencies in producer monitoring. Regulators later approved an Annuity Suitability Safe Harbor Guidance document in late 2025.
The working group is now preparing a resource document on how insurers meet supervisory obligations. The document is expected to describe methods and practices already used in the market.
A coalition of seven life insurance and annuity trade groups argued that the rule is working as intended. They said the 2020 regulation lets insurers adapt compliance programs to their own business models while keeping consumer protections in place.
The trade groups said insurers have invested heavily in training, technology, oversight systems, and compliance procedures since the rule was adopted.
They warned regulators against turning the resource document into prescriptive guidance.
According to the industry letter, insurers already use layered supervision. Those systems combine automated reviews, risk-based monitoring, and human oversight to identify possible suitability concerns.
All 50 states have adopted some version of the NAIC best-interest annuity sales rule. The rules still differ in some details from state to state.
The trade groups said insurers monitor conflicts of interest, verify producer training, and supervise third-party arrangements. They cited audits, certifications, and contractual requirements as common controls.
They urged regulators to preserve flexibility and avoid duplicative requirements. That concern applies especially to firms already operating under other rules, including Regulation Best Interest.
The joint letter was signed by the American Council of Life Insurers, the Committee of Annuity Insurers, Finseca, the Indexed Annuity Leadership Council, the Insured Retirement Institute, the National Association for Fixed Annuities, and the National Association for Insurance and Financial Advisors.
