6. Summary of and preliminary comparison with any existing or proposed federal regulation that is intended to address the activities to be regulated by the proposed rule:
There are no existing or proposed federal regulations which are intended to address the annuity benefit solicitations to be regulated by the proposed rule.
7. Comparison of similar rules in adjacent states as found by OCI:
Iowa: Iowa Administrative Code r. 191-15.61 to 191-15.67 (2003/2012) adopts the National Association of Insurance Commissioner’s (NAIC) approved Annuity Buyer’s Guide as the Buyer’s Guide to be used in Iowa. On October 21, 2013, addressing the updated 2013 versions of the Annuity Buyer’s Guide, the Commissioner issued Iowa Insurance Bulletin 13-03 stating that the Buyer’s Guide for Deferred Annuities-Fixed is acceptable in sales of fixed indexed annuities, the Buyer’s Guide for Deferred Annuities-Variable is acceptable in sales of variable annuities, and the Buyer’s Guide for Deferred Annuities (the combination guide) is acceptable in all instances.
Illinois: Illinois has not adopted disclosure rules for annuity benefit solicitations. To date there has been no formal adoption of language similar to the proposed rule.
Minnesota: Minnesota has not adopted disclosure rules for annuity benefit solicitations. To date there has been no formal adoption of language similar to the proposed rule.
Michigan: Michigan has not adopted disclosure rules for annuity benefit solicitations To date there has been no formal adoption of language similar to the proposed rule.
8. A summary of the factual data and analytical methodologies that OCI used in support of the proposed rule and how any related findings support the regulatory approach chosen for the proposed rule:
The proposed rule is based upon model regulation and analysis of the proposed provisions by representatives of the insurance industry, trade associations, life insurance agents, and consumer organizations. The proposed rule will foster consistency and uniformity across state lines which will promote predictability in the annuity marketplace and enhance consumer protection through important disclosures.
9. Any analysis and supporting documentation that OCI used in support of OCI’s determination of the rule’s effect on small businesses under s. 227.114: The amendment to s. Ins 2.15 will have a minimal additional cost for insurers and insurance agents. OCI does not charge insurers or agents for using the Wisconsin Buyer’s Guide to Annuities. However, NAIC charges $0.35 for each copy of a buyer’s guide. This has been a consistent cost for using NAIC guides. The repeal of Ins 2.14(4)(g)1. and amendment to 2.16(3)(a)2. are minor technical changes which should have no effect on small businesses. 10. If these changes may have a significant fiscal effect on the private sector, the anticipated costs to be incurred by private sector in complying with the rule:
See attached Fiscal Estimate and Economic Impact Analysis.
11. Effect on Small Business:
This rule does not impose any additional requirements on small businesses.
12. Agency contact person:
A copy of the full text of the proposed rule changes, analysis and fiscal estimate may be obtained from the Web site at: http://oci.wi.gov/ocirules.htm or by contacting Inger Williams, OCI Services Section, at: Phone: (608) 264-8110
Address: 125 South Webster St – 2nd Floor, Madison WI 53703-3474
Mail: PO Box 7873, Madison, WI 53707-7873
13. Place where comments are to be submitted and deadline for submission:
The deadline for submitting comments is 4:00 p.m. on February 6, 2015.
Mailing address:
Robin S. Jacobs
Legal Unit - OCI Rule Comment for Rule Ins 2.14, 2.15, and 2.16
Office of the Commissioner of Insurance
PO Box 7873
Madison WI 53707-7873
Street address:
Robin S. Jacobs
Legal Unit - OCI Rule Comment for Rule Ins 2.14, 2.15, and 2.16
Office of the Commissioner of Insurance
125 South Webster St – 2nd Floor
Madison WI 53703-3474
Email address:
Robin S. Jacobs
The proposed rule changes are:
SECTION 1. Ins. 2.14(4)(g) and 2. are consolidated, renumbered Ins. 2.14(4)(g) and amended to read:
2.14(4)(g) If cost comparison indexes are illustrated, all of the following disclosures shall be provided: the insurer shall provide A a statement regarding the use of the cost comparison indexes, including an explanation to the effect that indexes are useful only for the comparison of the relative costs of 2 or more similar policies.
SECTION 2. Ins. 2.14(4)(g)1. is repealed.
SECTION 3. Ins. 2.15(3)(b)1. and 2. are amended to read:
Ins 2.15(b) This section shall not apply to:
1. Variable annuities Non-registered variable annuities issued exclusively to an accredited investor or qualified purchaser as those terms are defined by the Securities Act of 1933 (15 U.S.C. Section 77a et seq.), the Investment Company Act of 1940 (15 U.S.C. Section 80a-1 et seq.), or the regulations promulgated under either of those acts, and offered for sale and sold in a transaction that is exempt from registration under the Securities Act of 1933 (15 U.S.C. Section 77a et seq.); 2. Contracts registered with the federal securities and trade commission Transactions involving variable annuities and other registered products in compliance with Securities and Exchange Commission (SEC) rules and Financial Industry Regulatory Authority (FINRA) rules relating to disclosures and illustrations;
a. Notwithstanding subdivision 2. above, the delivery of the applicable Buyer’s Guide is required in sales of variable annuities and, when appropriate, in sales of other registered products.
b. Nothing in this subdivision will limit the Commissioner’s ability to enforce the provisions of this regulation or to require additional disclosure.
SECTION 4. Ins. 2.15(4)(c) is amended to read:
Ins 2.15(4)(c) “Wisconsin Buyer’s Guide to Annuities” means the document which contains, and is limited to, the language set forth in Appendix I to this section.“Buyer’s Guide” means one of the following buyer’s guides adopted by the National Association of Insurance Commissioners (NAIC):
1. With respect to sales of fixed or fixed indexed annuities, either:
a. The Buyer’s Guide for Deferred Annuities (2013); or
b. The Buyer’s Guide for Deferred Annuities Fixed (2013).
2. With respect to sales of variable annuities, either:
a. The Buyer’s Guide for Deferred Annuities (2013); or
b. The Buyer’s Guide for Deferred Annuities Variable (2013).
SECTION 5. Ins. 2.15(8) is amended to read:
Ins 2.15(8) Disclosure Requirements. (a) The insurer and its intermediaries shall provide, to all prospective purchasers of any contract or arrangement subject to this section, a copy of the current edition of the Wisconsin Buyer’s Guide to Annuities a buyer’s guide and a properly completed Preliminary Contract Summary or Contract Summary prior to accepting the applicant’s initial consideration for the annuity contract, or, in the case of a rider or provision, prior to acceptance of the applicant’s initial consideration for the associated insurance policy or annuity contract. Insurers which do not market contracts through an intermediary may provide the Contract Summary, and the Wisconsin Buyer’s Guide to Annuities a buyer’s guide at the point of contract delivery provided they:
1. Guarantee to the contractholder the right to return the contract for a full refund of premium any time during a 30 day period commencing on the date such contract holder receives the Contract Summary and the Wisconsin Buyer's Guide to Annuities a buyer’s guide;
2. Alert the prospective contractholder, in advertisements or direct mail solicitations, of his or her right to obtain a copy of the Wisconsin Buyer's Guide to Annuities buyers guide and a Preliminary Contract Summary prior to the sale.
(b) The insurer and its intermediaries shall provide a Contract Summary upon delivery of the contract, if it has not been delivered beforehand;
(c) The insurer and its intermediaries shall provide a Wisconsin Buyer's Guide to Annuities buyer’s guide and a Contract Summary to individual prospective purchasers upon reasonable request;
