“This regulation absolutely makes it more difficult for advisors to offer annuities to their clients,” said Lau. “New York is already a difficult market for insurers. What we’ve found, across the board, whether we’re talking about fee-based or commission-based, is that there are fewer products in the New York market and ultimately that’s at a detriment to consumers. The well-intentioned effort to protect consumers can also scare insurers away, and we end up with less competition, fewer products and fewer choices.”
New York is one of the more prominent examples of states adopting their own fiduciary regulations after the U.S. Department of Labor’s fiduciary rule was vacated by a federal appeals court last year. Since that ruling, Massachusetts, New Jersey and Nevada have joined New York in pursuing more stringent fiduciary standards of their own.
An insurance industry group, the National Association of Insurance Commissioners, is also undertaking a multiyear examination whether it should impose a best-interest standard on its own membership.