Revisions to the Suitability in Annuity Transactions Model Act
A Suitability in Annuity Transactions Model Act from the National Association of Insurance Commissioners (NAIC) has been protecting consumers for almost 20 years. The Act was most recently updated in 2020. These latest revisions align with the U.S. Securities and Exchange Commission’s guidelines on the ‘best interest’ standard of conduct and clarify that all annuity recommendations made by producers and insurers must be in the best interest of the consumer based on their current circumstances. Producers and insurers must act with “reasonable diligence, care and skill” in making annuity recommendations and cannot put their interests ahead of the consumers. The revisions also enhance the insurance company’s supervision process to assist in compliance.
Relating to pet insurance
A Pet Insurance Model Law recently adopted by the NAIC creates new uniform standards for policy definitions, waiting periods, pre-existing conditions, and disclosure requirements. The model also requires companies to clearly describe the differences between an insurance policy and a wellness plan. If this model is adopted in Washington state, consumers would find more consistency between policies and experience less confusion about what insurance coverage they are purchasing for their pets.
Fighting criminal insurance fraud
Since 1995, the cost of insurance fraud has skyrocketed from $80 billion to more than $308 billion. The reporting of criminal insurance fraud is required by state law and the number of referrals to the Office of the Insurance Commissioner (OIC) continues to increase, so the OIC is requesting funding for an additional detective in its Criminal Investigations Unit (CIU). Early detection and action are critical to effectively combatting insurance fraud. Without the necessary resources to timely evaluate and investigate fraud referrals, criminal enterprises will continue their illegal activities in Washington.
Increasing turnaround time of property & casualty filings
The OIC is responsible for reviewing and approving all rate changes for insurers selling property and casualty coverage. The complexity of these filings has increased dramatically. To ensure insurance products are approved for the market quickly, the OIC is requesting two additional actuarial staff to be sure updated and accurate rates are reviewed without unnecessary delay.