States Race Forward with NAIC Best Interest Adoption

Update: This article, originally wrote 1/18/21, was recently amended to reflect changes in regulation.


Several more states are moving quickly to add a best-interest annuity sales standard to its regulation of insurance products. The latest states to adopt the best-interest model law put forth by the National Association of Insurance Commissioners (NAIC) are Alabama and Michigan.

In February 2020, the NAIC adopted a model law that articulates a best-interest standard through the following four obligations: care, disclosure, conflict of interest and documentation. With the outbreak of COVID-19, states were slow to adopt the model in the months that followed.

States handle regulations such as this in two ways: either via rules published by state regulators, or as legislation. Here is the latest list of states with adopted regulation:

Alabama

Effective January 1, 2022, Alabama will require producers to act in the best interest of the consumer when recommending an annuity. Producers who have already completed the original training requirement before January 1, 2022 must complete either a new one-time 4-hour course or an additional one-time 1-hour course before June 30, 2022. Producers who obtain a life insurance license on or after the effective date must complete the new one-time 4-hour course before selling annuities.

Quest CE 1-Hour Course: Approved

Quest CE 4-Hour Course: Approved

Arizona

Effective January 1, 2021, Arizona will require producers to act in the best interest of the consumer when recommending an annuity. Producers who have already completed the original training requirement before January 1, 2021 must complete either a new one-time 4-hour course or an additional one-time 1-hour course before July 1, 2021. Producers who obtain a life insurance license on or after the effective date must complete the new one-time 4-hour course before selling annuities.

Quest CE 1-Hour Course: Approved

Quest CE 4-Hour Course: Approved

Arkansas

Effective July 8, 2021, Arkansas will require producers to act in the best interest of the consumer when recommending an annuity. Producers who are already selling annuities have until December 31, 2021, to complete the training. Producers who have already completed an annuity course before 1/1/2021 must complete either a new one-time 4-hour course or an additional one-time 1-hour course by December 31, 2021. Producers who obtain a life insurance license on or after the effective date, must complete the new one-time 4-hour course before selling annuities.

Quest CE 1-Hour Course: Approved

Quest CE 4-Hour Course: Approved

Delaware

Effective August 1, 2021, Delaware will require producers to act in the best interest of the consumer when recommending an annuity. Producers who have already completed the original training requirement before August 1, 2021 must complete either a new one-time4 hour course or an additional one-time 1 hour course within 6 months. Producers who obtain a life insurance license on or after the effective date must complete the new one-time 4 hour course before selling annuities.

Quest CE 1-Hour Course: Approved

Quest CE 4-Hour Course: Approved

Idaho

Effective July 1, 2021, Idaho requires producers to act in the best interest of the consumer when recommending an annuity. A producer who has completed an annuity training course approved by the department prior to July 1, 2021, must complete within six months either a new one-time 4-hour course or an additional one-time 1-hour course. Producers who obtain a life insurance license on or after the July 1, 2021 must complete the new one-time 4-hour course before selling annuities.

Quest CE 1-Hour Course: Approved

Quest CE 4-Hour Course: Approved

Iowa

Effective January 1, 2021, Iowa will require producers to act in the best interest of the consumer when recommending an annuity. Producers who have already completed the original training requirement before January 1, 2021 must complete either a new one-time 4-hour course or an additional one-time 1-hour course before July 1, 2021. Producers who obtain a life insurance license on or after the effective date must complete the new one-time 4-hour course before selling annuities.

Quest CE 1-Hour Course: Approved

Quest CE 4-Hour Course: Approved

Maine

Effective January 1, 2022, Maine will require producers to act in the best interest of the consumer when recommending an annuity. Producers who have already completed the original training requirement before January 1, 2022 must complete either a new one-time 4-hour course or an additional one-time 1-hour course within six months. Producers who obtain a life insurance license on or after the effective date must complete the new one-time 4-hour course before selling annuities.

Quest CE 1-Hour Course: Pending Approval 

Quest CE 4-Hour Course: Pending Approval 

Michigan

Effective June 29, 2021, Michigan will require producers to act in the best interest of the consumer when recommending an annuity. Producers who have already completed the original training requirement before June 29, 2021 must complete either a new one-time 4-hour course or an additional one-time 1-hour course before December 29, 2021. Producers who obtain a life insurance license on or after the effective date must complete the new one-time 4-hour course before selling annuities.

Quest CE 1-Hour Course: Approved

Quest CE 4-Hour Course: Approved

Montana

Effective October 1, 2021, Montana will require producers to act in the best interest of the consumer when recommending an annuity. Producers who have already completed the original training requirement before October 1, 2021 must complete either a new one-time 4-hour course or an additional one-time 1-hour course before April 1, 2022. Producers who obtain a life insurance license on or after the effective date must complete the new one-time 4-hour course before selling annuities.

Quest CE 1-Hour Course: Pending Approval 

Quest CE 4-Hour Course: Pending Approval 

Nebraska

Effective July 1, 2021, Nebraska will require producers to act in the best interest of the consumer when recommending an annuity. Producers who have already completed the original training requirement before July 1, 2021 must complete either a new one-time 4-hour course or an additional one-time 1-hour course before December 31, 2021. Producers who obtain a life insurance license on or after the effective date must complete the new one-time 4-hour course before selling annuities.

Quest CE 1-Hour Course: Approved

Quest CE 4-Hour Course: Approved

North Dakota

Effective January 1, 2022, North Dakota will require producers to act in the best interest of the consumer when recommending an annuity. Producers who have already completed the original training requirement before January 1, 2022 must complete either a new one-time 4-hour course or an additional one-time 1-hour course before June 1, 2022. Producers who obtain a life insurance license on or after the effective date must complete the new one-time 4-hour course before selling annuities.

Quest CE 1-Hour Course: Approved

Quest CE 4-Hour Course: Approved

Rhode Island

Effective April 1, 2021, Rhode Island will require producers to act in the best interest of the consumer when recommending an annuity. Producers who have already completed the original training requirement before April 1, 2021 must complete either a new one-time 4-hour course or an additional one-time 1-hour course before October 1, 2021. Producers who obtain a life insurance license on or after the effective date must complete the new one-time 4-hour course before selling annuities.

Quest CE 1-Hour Course: Approved

Quest CE 4-Hour Course: Approved

Texas

Effective January 1, 2022, Texas will require producers to act in the best interest of the consumer when recommending an annuity. Producers who have already completed the original training requirement before January 1, 2021 must complete either a new one-time 4-hour course or an additional one-time 1-hour course. Producers who obtain a life insurance license on or after the effective date must complete the new one-time 4-hour course before selling annuities.

Quest CE 1-Hour Course: Pending State Submission

Quest CE 4-Hour Course: Pending State Submission 

Virginia 

Effective September 1, 2021, Virginia will require producers to act in the best interest of the consumer when recommending an annuity. Producers who have already completed the original training requirement before September 1, 2021 must complete either a new one-time 4-hour course or an additional one-time 1-hour course before March 1, 2022. Producers who obtain a life insurance license on or after the effective date must complete the new one-time 4-hour course before selling annuities.

Quest CE 1-Hour Course: Pending Approval

Quest CE 4-Hour Course: Pending Approval


States with pending NAIC proposals include: Nevada, Pennsylvania, Kentucky and Connecticut. For up-to-date results, visit Quest CE’s annuity suitability platform here. If you’re an insurance carrier or financial firm that would like to host product training/state training through our NAIC portal, click here to contact us today.