The training and insurer-oversight rules behind the annuity best-interest standard

Our companion piece on the annuity best-interest standard covers what care, disclosure, conflict-of-interest, and documentation actually require a producer to tell you. This page is about two structural pieces working behind that sale: the training a producer has to complete before they can recommend an annuity at all, and the system their own insurer is legally required to run to catch a recommendation that doesn't meet the standard.

A one-time, four-credit-hour training requirement

Under the 2020 revision to the NAIC's Suitability in Annuity Transactions Model Regulation (#275), a producer generally can't recommend an annuity to a consumer at all until completing a one-time training course — sufficient for at least 4 continuing-education credits — specific to the best-interest standard, through a training provider approved in the state where the application is actually taken. A producer who already completed the older, pre-2020 annuity suitability training typically only needs a shorter "top-off" course covering what changed, rather than repeating the full training from scratch; the exact mechanics of that transition can vary by state's own implementing regulation.

The insurer's own required supervision system

The obligation doesn't stop with the individual producer. Model #275 separately requires the insurer itself to establish and maintain a supervision system reasonably designed to achieve compliance with the standard — including procedures to review each annuity recommendation before the policy is actually issued, checking for a reasonable basis that the specific product addresses the consumer's disclosed financial situation, needs, and objectives.

Beyond that upfront review, the model expects an insurer to maintain ongoing procedures reasonably designed to detect a pattern of noncompliance, not just react to an individual complaint — things like confirming receipt of the consumer's profile information, systematic customer surveys, direct producer or consumer interviews, confirmation letters, producer attestations, and internal transaction monitoring. In 2025, the NAIC's own Annuity Suitability Working Group issued further guidance specifically addressing insurers that outsource this supervision function to a third party (such as a marketing organization or broker-dealer performing the review on the insurer's behalf) — making clear the insurer itself remains responsible and has to actively oversee that third party's work, not simply delegate the obligation away.

New York runs on a genuinely different rulebook

New York doesn't implement Model #275 at all. It adopted its own best-interest rule, Regulation 187 (11 NYCRR 224), in 2018 — before the NAIC's 2020 revision existed — and Reg 187 doesn't conform to the later NAIC model. It's broader in some real ways: it covers life insurance recommendations, not just annuities, and reaches certain in-force transactions that the NAIC model doesn't address at all. A producer or insurer operating in New York is working from a genuinely separate rulebook, not a state-customized version of the same one described above.

Where every other state stands

By April 2025, the last remaining state (New Jersey) had adopted its own version of the 2020 best-interest revision, meaning 49 states now run on some version of Model #275's framework, with New York alone on its separate Regulation 187. As always on this site: verify your own state's specific implementation date and any state-level modification directly, rather than assuming a single, uniform national effective date — a model regulation only has force once a state actually adopts it, and adoption details can still differ state to state even now.

What this means for you

If you're ever recommended an annuity, it's a reasonable, answerable question to ask the producer directly whether they've completed the current best-interest training — not just an older suitability-only course — and, for the fuller picture, whether the insurer's own review process actually looked at your specific recommendation before the policy was issued. A legitimate producer and a legitimate insurer should both have a straightforward answer to both questions; neither is an unusual thing to ask.