For months – years even – you've been hearing about New York's Best Interest and Suitability Reg 187, but now it's finally happening. Starting February 1, 2020, Reg 187 will be effective for all new life insurance sales issued or delivered in New York and will apply to all carriers operating in New York.
So now what do you need to do? To help you get started, NFP has developed an FAQ that outlines the key parts of Reg 187 and the all pieces that producers licensed to do business in New York State, or servicing clients with NY issued life insurance policies need to know.
One of the most important components is that Reg 187 requires training of all individuals holding NY licenses (producers, staff, and anyone else involved in making a "recommendation" to a client). This training can be found at RegEd, Kaplan, or LIMRA. Most carriers are indicating that they prefer RegEd, but license holders who received training from Kaplan or LIMRA can submit a certificate of completion from Kaplan or LIMRA. In addition to the universal training offered by RegEd, Kaplan, and/or LIMRA, each carrier will require product-specific training that can be found on the new business websites of the various carriers.
The other important change is that Reg 187 requires that each client's specific "suitability information" be gathered, documented, submitted, and retained for all "recommendations." Reg 187 has specific requirements for what constitutes "suitability information" and each carrier has created their own suitability form. To help simplify the process for our producers, NFP has created universal suitability forms – both for new recommendations and annual reviews – that can be submitted to the carriers with new business.
As you can imagine, the full impact of Reg 187 has yet to be felt and there are a lot of outstanding questions that the Reg has raised, but not yet answered. Given this, NFP will continue to provide information as we get additional clarity from the New York State Department of Financial Services or from those carriers doing business in New York.