CFA and other public interest organizations have submitted a letter in response to the New York State Department of Financial Services’ request for comment on its proposal to create a best interest standard for life insurance and annuities recommendations. The organizations appreciate the NY State Department of Financial Services' leadership in seeking to adopt a best interest standard for these recommendations that matches the strong protections provided by the U.S. Department of Labor’s conflict of interest rule for retirement accounts. In particular, they strongly support the decision to apply the strengthened standard to all life insurance products, not just annuities, as well as the proposal of a best interest standard that generally matches the wording of both the DOL rule and Section 913 of the Dodd-Frank Act. Despite these and other significant improvements over the NAIC’s proposal, however, the groups expressed concern that, as currently drafted, the proposed rule may not fully achieve the stated goal of requiring that insurance producers consistently recommend those life insurance and annuities products that are best for the investor, rather than those that are most profitable to the seller. The letter outlines several suggested changes to help ensure that the proposed standard achieves its intended purpose.

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