NYDFS issues final rule to establish standards for insurance sellers

State Issues NYDFS Insurance

On July 18, the New York Department of Financial Services (NYDFS) issued a final rule requiring licensed insurers that offer life insurance and annuity products to New York consumers to establish standards and procedures to ensure that the financial objectives of the consumer are addressed at the time of the transaction and financial exploitation is prevented. According to the NYDFS, the rule amends the state’s current suitability regulation and “provides for a best interest standard of care for all sales of life insurance and annuity products.” The rule provides that when making a recommendation to consumers with respect to policies, the producer must “appropriately address the insurance needs and financial objectives of the consumer at the time of the transaction.” According to NYDFS Superintendent Maria Vullo, “financial compensation or incentives may not influence the recommendation.”