The last few years have seen dramatic regulatory change in the life/health industry. From financial planners to health agents to annuity producers, everyone has felt the effects of regulatory restraint on both the local and national level. What changes are yet to come? And how can you adapt in order to survive and thrive in this ever fluctuating environment?
At the 2014 Advisor Summit Network in Las Vegas, an expert panel comprised of Sheryl Moore, President and Chief Executive Officer, Moore Market Intelligence, Scott Kipper, Insurance Commissioner, State of Nevada, and Kim O'Brien, President and Chief Executive Officer, National Association for Fixed Annuities (NAFA), and moderated by Steven R. McCarty, Chairman, National Ethics Association, discussed many facets of regulation. Here are excerpts from their discussion. 
Q: What has had the biggest impact on this industry?
Moore: From the producers' perspective, I think the biggest change we've had in this industry is suitability. That's really affected your businesses in a big way. It has affected not only the products that are in your toolbox, but the solutions that you can provide to your clients, as well.
O'Brien: Producers have done an astounding with suitability. NAFA just got our numbers in on 2013 and there were 46 complaints against the indexed annuity and a total of 202 for all fixed annuities. That's down 85 percent. We wouldn't have gotten the Harkin Amendment if we didn't have the suitability rule in place.
Kipper: Suitability is also the [commissioners'] focus. We're entirely hopeful that this trend continues. It's nice to hear those numbers. We believe the message is getting across. Here in Nevada, we don't have those significant issues and we hope this continues to be a trend that you all are doing what you're supposed to do for your consumers — getting the right products in their hands at the right time. 
Q: How has this issue of suitability impacted advisors and their businesses?
O'Brien: Well, it's no doubt complicated it. There's a lot to do to meet suitability standards, there's a lot of forms to complete. There's no doubt it's increased the workload. But I think with that increased workload, it's further secured the relationship with your customers and carriers.
Moore: I think it's been confusing, too. You can sell insurance and annuities for 80 different companies if you feel like it, but each of those 80 companies might have different suitability forms and guidelines and processes. What I'm hearing from advisors is that suitability's a pain in the butt. And I get that. And I don't disagree with you. I'm not entirely happy with all the effects that it's had on our industry, but I was having a conversation with Mr. Kipper out in the hallway and I really think that what I hear from all of you more than anything else is, "Yeah, it's a pain in my neck, but it has helped me in this way."
Has anybody heard the name Glenn Neasham? That case happened before we had our suitability model reg that's in place today. And maybe, had that been in effect at that time, we wouldn't have had to hear about Glenn Neasham all over the headlines for so many months.
I think that the takeaway when it comes to suitability is, yes it is more work; yes it is confusing. But in the end, it not only helps protect you, but it also strengthens your relationships with your clients. So ultimately, I do see it as a win/win.
Kipper: As a very old producer, I think that suitability did nothing but simply help cement that relationship between producer, advisor and client. And I think that will go a long way toward enhancing sales, enhancing a change in the portfolio of those clients as their situation changes, because you can know them that much better. Ninety-five percent of the producers and advisors out there do it right, do it correctly, are not a problem, are a great service to their clients. It's the 5 percent that end up on my desk and force us to take action at the state level and also to address new suitability rules at the NAIC.
O'Brien: If I might just take this a little more federal, NAFA is very much opposed to the DOL fiduciary rule and the SEC putting forth a "uniform standard," because we believe the suitability is the gold standard for the transactional sales that you make. The reason we're so opposed to the fiduciary standard is not because it's not a great standard—it's a good standard for the type of business that it's applicable to. But if there's a uniform standard imposed, suitability will not go away. Thirty-six states now have enacted it and Harkin makes it pretty much across the country. So you will have to face two dueling standards, two fiduciary responsibilities, both the suitability standard and the best interest standard of the fiduciary. That is going to be devastating to the marketplace. 
Q: As far as the product line itself, what changes do you see coming down the pike?
Q: How can advisors prepare themselves for future changes? And if they're with an FMO, how can they talk to their producers about how to adapt? 
Q: What are the most common mistakes that you see advisors make that lead to enforcement actions? 
