A New York state life insurer with more than one similar life insurance or annuity product may have to work hard to convince Empire State regulators that its product menu is fair.
The New York Department of Financial Services sent out a circular letter warning that “offering multiple versions of the same product” could be discriminatory.
Mona Bhalla, the deputy superintendent in charge of the department’s Life Bureau, signed the letter, and Adrienne Harris, the department’s superintendent, announced it.
Harris said insurers have a responsibility to ensure fairness in their products. “The complexity of insurance products should not be used to exploit vulnerable groups,” she added.
What It Means
Knowing just what products are on a New York state life insurer’s life and annuity shelves could get tricky over the next few months.
The Circular Letter
Bhalla acknowledged in the circular letter that life insurers may have developed separate products to fit different distribution channels, or to reflect how certain types of distributors are paid.