New York Amends Regulation 187 (now called “Suitability and Best Interests in Life Insurance and Annuity Transactions”)

Effective August 1, 2019, the New York Department of Financial Services has amended and renamed New York Insurance Regulation 187, which will now be called “Suitability and Best Interests in Life Insurance and Annuity Transactions.”  The Amended Regulation addresses the duties and obligations of insurers and insurance producers and provides that any transaction with respect to life insurance policies and annuity contracts delivered or issued for delivery in New York must be in the best interest of the consumer and appropriately address the insurance needs and financial obligations of the consumer at the time of the transaction.

When it becomes effective in 2019, the Amended Regulation will require an insurance producer’s or insurer’s recommendation to the consumer concerning the sale of a life insurance policy or annuity contract to be  based on an evaluation of the relevant suitability information of the consumer and reflect the care, skill, prudence and diligence that a prudent person acting in a like capacity and familiar with such matters would use under the circumstances. Only the interests of the consumer may be considered in making the recommendation. The producer’s receipt of compensation or other incentives is not permitted to influence the recommendation.

The Amended Regulation, showing the changes, may be found here.