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FIO Releases Its 2014 Annual Report

Each year, the Federal Insurance Office is required to issue an annual report on the insurance industry and any other information it deems relevant...
October 2, 2014

Each year, the Federal Insurance Office (FIO) is required to issue an annual report on the insurance industry and any other information it deems relevant. This report is not to be confused with the FIO report on regulatory modernization, which it released in December 2013, more than two years late. This second annual FIO report was released in September 2014.

Much of the FIO's Annual Report on the Insurance Industry appears to take a "just the facts" approach to recounting what has gone on in the industry over the past year. However, at times the FIO can appear to advocate its own views by defining progress, then measuring it against its own recommendations as contained in its 2013 modernization report. Greater objectivity is provided in reports by the Insurance Information Institute (I.I.I.).

The FIO report states support for the NAIC Suitability in Annuity Transactions Model Regulation as a way to protect consumers when making complicated financial decisions. The NAIC Model Regulation, which has been adopted in approximately 30 states, requires producers to make reasonable efforts to obtain suitability information and to take it into consideration before recommending any annuity purchase. The model regulation also requires producers to complete a one-time training course on annuity sales approved by state insurance regulators and for insurers to provide product-specific training to producers and to review the suitability of an annuity for a particular consumer prior to issuing the annuity.

What It Means to Agents: The FIO report includes recommendations for the sale of life insurance products and indicates it may potentially recommend actions beyond the National Association of Registered Agents and Brokers Reform Act of 2013 (NARAB II) to encourage additional producer licensing, specifically in life insurance. PIA will monitor the FIO's activities in this area, to ensure that the office does not seek to expand its narrow congressional mandate, which prohibits it from acting as an insurance regulator.

FIO Annual Report

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