New York Regulation 187 Best Interest Rule - Back in Play

By Lynn Knauf, CPCU, ARM
Oct 27, 2022

New York’s Suitability and Best Interests Regulation Back in Play for Life and Annuity Producers

New York Regulation 187 Best Interest Rule reinstated

On October 20, 2022, the New York Court of Appeals essentially reinstated Revised Regulation 187, Suitability and Best Interests in Life Insurance and Annuity Transactions, a regulation previously struck down by the Appellate Division of the New York Supreme Court on April 29, 2021.

Regulation 187 was first adopted in 2010 to address the issue of suitability in annuity sales. The regulation was substantially revised in 2019 to adopt a “best interest of the consumer” standard and to extend the scope of the regulation to life insurance transactions. Industry groups challenged the regulation as unconstitutionally vague, a challenge now presumably ended by the latest decision of the state’s highest court.

The producer is also required to act in the best interests of the “consumer” (defined as the owner or prospective purchaser of the policy). The Court of Appeals decision provides some welcome clarity with its interpretation of the regulation by stating that it, “does not require producers and insurers to identify the single best policy for a consumer. It simply requires them to reasonably recommend a suitable policy that will benefit the consumer, while refraining from considering their own financial gain.”

WebCE’s state-approved course, New York Regulation 187: Suitability and Best Interest Standard provides a detailed look at the state’s suitability and best interest requirement. The course is approved for two hours of CE credit and satisfies New York’s one-hour law CE requirement.

View New York Annuity and Insurance CE Courses