The purpose of amending Ins 2.16 (3) (a) 2. is to change the reference from “Wisconsin Buyer’s Guide to Annuities” to “Buyer’s Guide” so that Ins 2.16(3)(a)2. conforms with the amendments to Ins 2.15. This is a minor technical change to ensure consistent cross references in the Wisconsin Administrative Code.
The purpose of repealing Ins 2.14 (4) (g) 1. is to bring the rule up to date with a change in the law that occurred in 1998. The entire subdivision should be deleted because the sentence stating “Further explanation of the intended use of these indexes is provided in the life insurance buyer’s guide” is incorrect as no such explanation is contained in the NAIC Life Insurance Buyer’s Guide concerning cost indexes. The explanation was previously included in OCI’s Life Insurance Buyer’s Guide which was replaced with the NAIC Buyer’s Guide by rule change in January, 1998. This is a minor technical change to the existing rule which does not encompass a change of existing policy with respect to the disclosure rules applicable to life insurance.
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 s. Ins 2.14 (4) (g) 1. and amendment of s. Ins 2.16 (3) (a) 2. are minor technical changes which should have no effect on small businesses. 10. See the attached Private Sector Fiscal Analysis.
See attached Fiscal Estimate and Economic Impact Analysis.
11. A description of the 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 the 14th day after the date for the hearing stated in the Notice of Hearing.
Mailing address:
Robin S. Jacobs
Legal Unit - OCI Rule Comment for Rule Ins 08214
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 08214
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(g)1. is repealed.SECTION 2.
Ins 2.15(3)(b)1. and 2. are amended to read: Ins 2.15(3)(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 3.
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, for the purposes of this section, the National Association of Insurance Commissioner’s (NAIC) adopted Annuity Buyer’s Guide which refers to:
1. For sales of fixed or fixed indexed annuities, either the “Buyer’s Guide for Deferred Annuities” or the “Buyer’s Guide for Deferred Annuities – Fixed”, dated 2013, as adopted by and available from the NAIC; or
2. For sales of variable annuities, either the “Buyer’s Guide for Deferred Annuities” or the “Buyer’s Guide for Deferred Annuities – Variable”, dated 2013, as adopted by and available from the NAIC.
