Call us today @ (518) 692-2494
Compliance you can trust. Service you can rely on.
schedule call with Cailie

Mark your calendar!


Proposed Regulation 187 (Suitability in Life Insurance and Annuity Transaction)


I am sure by now most of you have read the proposed revision to NY’s suitability regulation – or at least a news article about it. There have been quite a few. Because the comment period is still open, it is not too late to make your views known to NYSDFS. 

I have many opinions and thoughts about this proposal – some of which I wrote about in an earlier blog post. The longer I sit with it, the more thoughts and opinions I have. Here is one that I did not write about in my earlier post and that I have been ruminating on the last couple of weeks… 

Many of us who are involved in annuity filings, and have made DOL-related fee-only or reduced-commission filings, have heard from DFS in recent months that the DOL compliance obligations of producers should not impact what products are offered, by those producers, to consumers. They have pulled out a circular letter from 1955 and are once again focused on all individual products being “generally available.” They are adamant that they will not approve products that are developed for one distributor. Where they will allow some flexibility by distribution channel, they have stated in objection letters that a distribution channel means, for example, all banks in NY, not all Citizen Banks in NY. Absent a recognized distribution channel, our clients have been told, the product must be “generally available.” 

In that context, what does the definition of suitable mean? “Suitable means in furtherance of a consumer’s needs and objectives under the circumstances then prevailing, based upon the suitability information provided by the consumer and all available products, services, and transactions” (emphasis added). Does “all available products” mean all generally available products? Read with §224.5(c)(1)(i) of the Reg., it appears they do mean only those products, services, and transactions of a single company because that paragraph states that an insurer shall provide consumers with “all relevant policy information with respect to evaluating any transaction or proposed transaction, including a comparison, in a form acceptable to the superintendent, of all available policies of the same product type offered by the insurer; …”

Presumably the intent is for the information provided by the insurer to line up with the products considered by the producer for recommendation to the consumer. Leaving aside the question of how many insurers’ products must be considered and therefore how many disclosures must be provided to each individual consumer, what about all the distributor-specific products that one insurer might have? Is part of the intent of the regulation to bring us back to the days before the 2000 OGC opinion on class distinctions by making an onerous disclosure and suitability standard? Is this a way to go back to what the DFS has often waxed nostalgic for? That time when one company had only one UL policy or one FPDA because the DFS felt having two, unless the second fell into a small number of clearly recognized distribution channels, was unfairly discriminatory? Perhaps not, but the more I think about it the more it seems so to me. How else can these compliance burdens be met? And more than anything, doesn’t that limit product availability to consumers based on producer and insurer compliance burdens? 

VT Bulletin 198

Screen Shot 2018-01-30 at 9.21.17 AM.png

On Monday, January 8, 2018 Vermont joined Iowa and Tennessee and issued detailed guidance on providing advice for securities and insurance products. Insurance Bulletin 198 (and Securities Bulletin S-2018-01) is a joint bulletin that the Department of Financial Regulation felt was necessary in order to provide financial professionals additional guidance on what activities are and are not permissible when it comes to providing advice on securities and insurance products.

The Department had issued more general guidance back in 2011, however, they stated two specific reasons for providing more detailed information now.

First, the Department said, there has been “an increase in investigations and enforcement actions relating to unregistered investment advice.”

Second, the “continuing evolution of state and federal suitability laws that now require an extensive financial analysis of a consumer’s financial affairs and a discussion of broad financial trends prior to making a recommendation on an insurance product or an investment/securities product.”

One point I found interesting is that, in the past, we’ve thought of this guidance as related to “source of funds”; that is, a specific focus on where the funds are coming from, and who can provide what level advice on those funds. While that’s still something that is being addressed in this bulletin, the #2 reason the department cited is related but broader than just source of funds. It goes to the growing discussions and developing regulations around how financial services are provided to consumers and what standard of care is owed to those consumers of financial services.

With NY’s proposed changes to their suitability regulation (which includes a number of significant changes, one of which is including life insurance within the suitability standards) as well as the questions of what will become of the DOL rule and what will the SEC do, as well as the NAICs current work on incorporating “best interest” standards into the suitability model, it’s clear that there are lots of questions around how financial transactions should be handled and what the burdens of the financial professionals are to ensure consumers are getting the “best” products and services for their needs.

With this bulletin, VT is stepping into the arena to add a bit more clarity at least around who can provide what services, and what types of discussions are permissible depending on the licensing and/or registration the financial professional holds. While only two other states have issued nearly identical guidance, we think it’s prudent for financial professionals to follow these guidelines regardless of what states they live in.

Why? Because this language is the most detailed we’ve seen, except in TN and IA and by using it as a benchmark of how financial discussions should be had and what the limits of those discussions may be, it allows financial professionals to say that they are trying their best to provide advice that they’re qualified to give without stepping over any boundaries. It shows a commitment to using integrity with consumers, and that even for states outside of VT, IA, and TN, it may provide a “safe haven” of sorts to be able to show documentation of complying with these regulations.

NY Regulation 210: Non-Guaranteed Elements

Are you confident you understand the scope of what your company needs to do by March 19th to be compliant with this new regulation?

If not, there is only one place you need to be on Feb 6th –-> Irvine, CA.

We will spend hours discussing the regulation, its history and implementation. If you haven’t registered, you should do so right away!

This may be your last chance to talk to experts and peers before the regulation goes into effect. Don’t miss it!

Space is limited.

Proposed revisions to Suitability in NY: What next?

You may have missed the publication of Proposed revisions to NY’s Regulation 187 as it came out as many of us were celebrating holidays and taking a few well-deserved days off. However, we are all back to work now and as we continue to grapple with implementing the mandates of Regulation 210 (regarding non-guaranteed elements), we have a new proposal: Suitability in Life Insurance and Annuity Transactions. Yep, you read that correctly, Suitability in Life Insurance and Annuity Transactions.

In some ways, suitability is a misnomer because one thing this regulation does is equate suitability and best interest in a new, direct way. Before the DOL rule, I often spoke to groups about what seemed to be a degree of regulatory confusion about the difference between a suitable recommendation and a best interest recommendation. There are many examples in disciplinary actions and published statements where insurance regulators, often at the commissioner level, have used those terms and phrases interchangeably and therefore, in my opinion, inaccurately. NY now intends to make it accurate. And apply this new concept of suitability to life insurance. 

So, what does “best interest of the consumer” mean in NY’s suitability proposal?

First, it is transactional, which makes more sense in the context of insurance than the relationship-based concept of the DOL fiduciary rule. A transaction is “any purchase, replacement, modification, or election of a contractual provision with respect to a proposed or in-force policy.” Note the inclusion of “election of a contractual provision”, which would typically be post-issue.

There must be a recommendation. Recommendation is defined as “one or more statements or acts…to a consumer” by a producer or insurer if there is no producer involved. The statements or acts “reasonably may be interpreted as advice” and the consumer enters into or refrains from entering into a transaction. Finally, there is an intent element to the definition. The recommendation must include an intent by the producer/insurer, which is interesting, especially when we are talking about an insurer. Is it possible for a corporate entity to have an intent? (They can make campaign contributions as people, after all.) Are sales goals the same as intent?

In all states plus in the federal securities suitability standards, there are 12 factors to be considered, but NY is proposing to add a lucky 13th: “Tolerance of non-guaranteed elements in the policy, including variability in premium, cash value, death benefit or fees.”  They also modify the wording of some of the other 12 as well to make some policy features explicit suitability factors. Very significantly, the definition of “suitable” also requires consideration of “all available products, services, and transactions.” What is meant by “available?” What the producer is licensed/appointed to sell? What is available anywhere by anyone with an appropriate license? How can a producer consider products that they do not sell with the level of diligence apparently required by the regulation?

A producer/insurer acts in the consumer’s best interest under this proposal when the recommendation reflects due care and skill and is based on an evaluation of the suitability information provided and is made “without regard to the financial or other interests of the producer, insurer, or any other party.” The consumer must have been “reasonably informed” of the features of the product – whether favorable or unfavorable. In addition, the consumer has to have been informed of the producer’s compensation, which is not really a new requirement since Reg 194 has required notification for several years now. The producer/insurer must determine that the consumer would benefit from features in the policy (which includes both life insurance and annuities).

In addition to these best interest/suitability standards, a few additional rules are incorporated.  The producer cannot “state or imply to the consumer that a recommendation to enter into a transaction is part of financial planning, financial advice, investment management or related services unless the producer has a specific certification or professional designation in that area.” That seems more than reasonable when it comes to financial planning and investment management. However, isn’t any recommendation covered by this regulation financial advice? What certification or designation is contemplated for that element of this prohibition? 

The regulation also states that it applies to “every producer in the transaction, regardless of whether the producer has had any direct contact with the consumer.” This seems to be a warning to general agents and IMOs that they need to be very careful in this regard and have good oversight in place to make sure that they are not inadvertently brought into a violation because of an override payment on a sale that was not suitable.

Insurers are required not only to have policies and procedures around suitability and the implementation of the above rules, but also, they must establish procedures “designed to prevent financial exploitation and abuse.”

Finally, in contrast with the DOL rule, this proposal specifically endorses commission sales as consistent with both the suitable and best interest standard. It states: “Nothing in this Part shall be construed to prohibit the payment to a producer of any type or amount of compensation otherwise permitted under the Insurance Law.”  That is consistent with the DFS position that the compensation limits set forth in §4228 are reasonable. 

This proposal is currently in the public comment period.

We have had conversations with clients about making comments on their behalf. If you are interested in discussing this proposal and how it might impact your company, please contact me at 518-692-2494 or We will also be discussing this in more detail at our upcoming symposium on February 6 in Irvine, CA

Great Article on Wells Fargo’s Insurance License situation in California

As regular readers of this blog know, I am an enthusiastic fan of the work Alan Prochoroff does at Insurance Compliance Insight. His article in the December 11 edition titled California Considers Pulling Well Fargo’s Insurance License is an example of why I read each issue as soon as it arrives. I could not distill the information any better than Alan does, so instead, I recommend that you read it directly. For those of you who may not be subscribers, Alan has set up this link for direct access.

Finding Hidden Treasure

If you are like me, you know that you can find a treasure-trove of information in filing pipelines. I like the public access version of SERFF to find most of what I am looking for because it is so simple to use. Typically, I research filings to see how any number of challenging, state-specific requirements were addressed and approved. This research can then assist our clients in better understanding and eventually overcoming possible filing challenges before filings are even submitted.


Many states, including the Compact, make accessing these insightful filings pretty easy, while other states can be a bit more challenging. In CA, for example, a written request can be submitted for information, but did you know that the filings can also be accessed using SERFF? This can be done by going in-person to either the San Francisco or the Los Angeles office of the CDI. Access to SERFF is available using the computers provided by the Department for this purpose in their public viewing rooms.

Living in Southern California, I took advantage of this ability and made the short drive from Huntington Beach to Los Angeles just before Thanksgiving. I went on behalf of a client, and was able to easily locate and download several competitor filings to a thumb drive before I was back on the road. What a breeze! I had prepared for my visit in advance by jotting down the NAIC numbers for the companies of interest, as well as the product types and form numbers included in the filings. As with any SERFF search, having that information makes finding a filing quick work, especially since I knew what I was looking for. An appointment is required, but is easy to schedule with a phone call to the Department.

If you are unable to make the trip, I would be happy to go for you – I love a treasure hunt!

And if you prefer to get a copy of the filing the old fashioned way, this link will give you some additional information to do so.



Trust the Experts

cac bike.jpg

As many of you know, one of my great pleasures in life is riding my bike. I don’t get to do it as much as I would like. I ride around our beautiful county filled with farmland and rolling hills. I do fundraising rides for the Leukemia and Lymphoma Society, for which many of you have generously sponsored. I have done bicycle tours of Western Ireland and Prince Edward Island. 

In 2018, I will begin a bucket list ride across the country and, using that as a rationalization, I have recently bought a custom road bike. The process of having a custom-built bike made me think about our industry’s products and how they retain the core product values, even as the latest bells and whistles come along and get added and then fall away over time. 

My new bike is shiny, and it has a beautiful custom paint job. But guess what? It isn’t carbon fiber or some other super high-tech material, it is steel. The steel frame and fork will make it much more comfortable to ride across the country. My cycling friends asked, “Isn’t it heavy?” When I answer that it is about 1 lb. heavier than my carbon fiber road bike, they seem shocked that I would make that choice. I tell them I can lose 1 pound of body weight to make up for that, but I can’t make a carbon fiber bike any more comfortable to ride. Sometimes the tried and true is more valuable than the latest new thing. 

I never met the designer of my custom bike. Pictures, measurements, preferences, and experiences all shared by email. If I had to meet with her in person I could not have made it happen. I would not have been able to take the time to meet with her. We used all the technology we could to make the transaction happen. Those who know me best will also not be surprised to know the bike itself has a lot of technology too, including the latest Garmin tracker of all things cycling and front/rear lights that I hope will protect me from distracted drivers. But if they don’t, they have cameras to take pictures of the drivers’ cars if the bike sustains an impact. 

I had a moment of panic after the bike had been built but before I had seen it. Several of my friends were also getting new bikes complete with disc brakes—something my new bike did not have. I sent a worried email to the designer, who assured me that the traditional brakes are a better option. The cost and complexity of the new systems is not outweighed by performance, she assured me. Ultimately, with some angst, I went with her recommendation. I see my friends with their disc brakes and sometimes wonder if I made the right choice. I am not sure if I will ever know one way or the other. 

In the end, I trusted the expert.

Humor: It's all relative!


This Investment News article’s headline about a regulatory attorney caught my eye:  “Giachetti adds humor to compliance.” At CCS, we talk about bringing humor to compliance all the time, but it isn’t easy. There is laughter in the office, but not too much of it relates to our work. After reading the article, and no offense to Mr. Giachetti, I think humor may be relative. The article refers to the possibility of an alternative universe in which there is a comedy club for “financial regulatory wonks.” I think that is very alternative. I do not think, in this universe, there is such a demand. I am not one to talk: my family tells me I am generally only funny once a month. As the end of the month approaches, there is often discussion about whether I have been funny yet.

That said, there is a specific comment from the article that is very consistent with our experience – though it is not humorous at all: “firms will hire marketing consultants, most of whom haven’t got a clue about the business. And they will spend an exorbitant amount of money on a marketing campaign, but they won’t spend an hour to pay me to review the proposed material to make sure that they can actually use this stuff.” So often, with advertising review, we are brought in too late to avoid the compliance problem – we can only try to minimize the regulatory impact after the fact. Don’t be like that. Pay for the hour up front… it is worth it.

AICP Wrap-Up: Don’t Go Sleepless in Seattle – Hot Topics in Advertising


Another wonderful AICP National Conference is in the books! Seattle delivered with beautiful weather, and AICP delivered with great content, networking, and compliance insights.

I was honored to be a part of a panel featuring Maureen Perry, Product Reviewer with the Interstate Compact, and Ted Newton, Advertising Review with Mass Mutual. Together we selected what we saw as four overarching issues to be on the lookout for within the world of advertising review for life, health, and annuities.

  1. Consumer Confusion – Who is Offering What?
  2. Carrier Confusion – What is advertising?
  3. Electronic vs. Printed Advertising – Capabilities and Challenges
  4. Consumer Engagement – Plain Language, Disclosure, Engagement

Now, each of these topics could be broken down further and have their own dedicated sessions to really dig into how issues show up and how to tackle them. Still, we were able to discuss lots of ways to manage these hot topics and enjoyed an engaging conversation with the audience.

So how can you address these issues? Here are some of the key takeaways for each category:

  1. The issuing carrier must be made clear and prominent. Some states have more specific requirements about what this means than others, but there should be no question about who is issuing the policy.
  2. The definition of “advertising” is broad, and it’s best to cast a wide net to make sure your company is catching all the ads. If you don’t know if something is considered an ad or not, start with this question, “What is the intent of this flyer/tweet/brochure/tv commercial, etc.” Is it to promote insurance (generally, or specific products), your products, your services, your agents/agencies? If the answer is yes (and there’s a lot of times it’s going to be a yes) – then it’s an ad and needs to be handled as such.
  3. When it comes to electronic vs. printed ads, there are pros and cons on both sides. We talked a lot about space restrictions and how specific you can get in a limited space ad. Rule of thumb – less space, less specific.
  4. Finally, we rounded out our discussion with a big trend, which is the use of “plain language” or “plain English” in both insurance ads and in the contracts, themselves. We expect to see challenges to the traditional language and terminology that’s used in the insurance space for lots of reasons – target markets, selling products direct to consumer are just a couple of the drivers – while the idea of having language that’s familiar and understandable is certainly appealing from a compliance perspective (we want people to clearly understand how it works, what they’re buying). What that looks like while still having protection measures in place against litigation and/or regulatory violations is still very much up in the air. That said, it’s important for compliance professionals and regulators to keep an open mind here and work with others on what makes sense. There’s lots of room at the table to make insurance more accessible and understandable, it just needs open minds and discussions to make sure it stays reasonable and not simplified to the point it creates expectations that aren’t accurate.

If you’re interested in hearing more about these topics, drop us a line with any questions or comments you have or advertising issues you’re struggling with!!

Where are they now?

While at the AICP National Conference in Seattle last week, our booth was bustling with a stream of visitors looking for information and the latest Currin Compliance swag—often with stories of the adventures of their “buddies” collected in previous years. If you haven’t had the pleasure of attending an event where we had an exhibit booth, you’ve missed out on our very popular giveaways. Over the years our items have included the Compliance Hero, the Currin Cow, the happy yellow cell phone holder, the fuzzy bobble-head pen, the talking stress reliever, and the list goes on.

So many of the visitors who stopped by our booth last week made comments about their buddies from previous years, as if giving us an update on what our little friends have been up to since leaving our booth at a conference. It may sound silly now, but the stories were always warm and heartfelt. Whether lined up on their desk at work, on the top of their TV at home, or passed along to children or grandchildren, the buddies seem to make their way around, spreading a little happiness wherever they go.


During a break at AICP, one of our long-time CCS fans, Ken Bach, shared a story about two bobble-head pens he collected several years ago. Ken took them home and eventually ended up planting them in his yard. He sent a picture of them to his daughter, as in “look what just popped up today” like a tulip or a daffodil. Now Ken regularly sends an updated picture to his daughter as a way to say hello and to put a smile on her face. Amazingly, the pens have survived the Connecticut weather and are not looking too bad! He shared this picture with me, and I agree, the buddies look pretty darn cute.

If you have a story or a picture of one of your CCS buddies that you would like to share, please send them to us via email. We would love to include them in our newsletter as they're sure to put a smile on a face or two!

Another fabulous AICP National Conference

sheraton exterior_300x400.jpg

I began my October 2017 at the 30th Annual AICP National Conference in Seattle, Washington. This conference is always my favorite, and it did not disappoint this year! Some of my favorite parts included:

  • Delicious chicken parm dinner at Palomino, the Italian restaurant across the street from the hotel.
  • Meeting with fellow chapter officers at the chapter officer training and hearing from AICP leadership about their plans for the year.
  • Giving out our CCS cows with “Seattle raincoats,” aka our yellow eye glass cleaners, and meeting so many conference attendees. 
  • Hearing different perspectives on health care reform from commissioners from WA, WI, and ID during the View from the Top, Life Annuity and Health session.
  • The fact that the View from the Top session was held on the top floor of the hotel with amazing views!
  • The beautiful tribute to Rick Guggolz, former AICP Executive Director, who passed away unexpectedly this year.
  • Amazing views of the city from the Puget Sound aboard the Spirit of Seattle ship during the multi-chapter event.
  • Presenting with Hazel Delane of Milliman, Inc. on Combination Products.

This list could go on and on, the AICP Conference is always jam packed! Now that I have returned to the east coast, I also have a newfound appreciation for our Executive VP and COO, Machael Heise, who travels coast-to-coast every month. Jet lag is for real! As is the AICP National Conference. Next year’s conference is scheduled for September 23-26 in Nashville, Tennessee, mark it on your calendar!