What is New York Regulation 187?
On July 18, 2018, the New York Department of Financial Services (DFS) released a thoroughly revised version of Regulation 187, now retitled “Suitability and Best Interests in Life Insurance and Annuity Transactions.” The revised regulation ensures any transaction related to life insurance policies and annuity contracts must be in the best interest of the consumer and must address the needs of the consumer at the time of a transaction. The provisions of the regulation that apply to annuity contracts went into effect August 1, 2019. On February 1, 2020, the provisions of the regulation that apply to life insurance policies will take effect.
The main purpose of the revised New York Regulation 187 is to define a producer’s obligations when making annuity and life insurance policy recommendations to a customer. The results of the revised Regulation 187 are expected to be a higher level of transparency in insurance transactions and more consumer confidence in producers, insurers, and the insurance marketplace. It should lead to fewer misunderstandings and miscommunications while ensuring customers walk away with products that better meet their needs and expectations.
Insurance producers will now be guided by two principles. The first principle is to help ensure that the insurance products sold address the needs of the customer and are in their best interest. The second is to ensure a sale appropriately addresses the consumer’s insurance needs at the time of purchase. These two ideals will encourage a high standard of honesty, transparency, fair business practices, and public responsibility.
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