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Think Advisor Quotes Locke Lord Insurance Lawyers on Insurance Regulators' Focus on Vendor Management, Suitability and Diversity

April 22, 2021

Chicago’s Mike Rohan, Paige Waters and Stephanie O'Neill Macro were quoted in a Think Advisor article on a Locke Lord webinar on the National Association of Insurance Commissioners (NAIC) Spring meeting and issues facing the industry in 2021. One such issue is vendor management, specifically with regard to short-term health insurance marketers, third-party administrators, managing general underwriters and other types of business associates.

“If you have a third party doing any kind of activity for you, whether they’re licensed or unlicensed, you’re ultimately answerable to the regulators for that,” Rohan said, adding that some regulators want to review existing NAIC models, and those reviews could eventually lead to new kinds of oversight of lead generators.

Another issue is “suitability,” or efforts to make sure that insurers and financial professionals are selling products that appear to suit the purchasers’ needs.

“We believe that, going forward, regulators may attempt to extend suitability to life insurance,” Waters said, noting she has observed in her practice at least one state operating as if there already is a suitability model for life insurance.

Macro commented on the NAIC Special Committee on Race and Insurance, noting its review of access to life insurance, annuities and health insurance and goal to deliver a set of recommendations to the NAIC’s executive committee by the end of 2021.

“There seemed to be a sense of an urgency and a desire to walk the talk and to move past the information-gathering phase,” Macro said.

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