A New York state rule that raises the standard of conduct for sellers of annuities and life insurance policies has survived a legal challenge from industry groups.
On the eve of the rule’s implementation last Thursday, the New York State Supreme Court upheld it, InvestmentNews reports.
State regulators proposed the rule in late 2017 and issued it in July 2018. It requires agents and brokers selling life insurance and annuities to place consumers’ interests ahead of their own.
Acting Supreme Court Justice Henry F. Zwack said the regulators properly exercised their powers by promulgating the measure, the publication says. The judge also said the rule was neither “arbitrary” nor “capricious.”
At least one of the plaintiffs, the National Association of Insurance and Financial Advisors – New York State Inc., had claimed the state’s Department of Financial Services exceeded its executive authority by promulgating the rule.
Representatives of the plaintiffs did not return requests for comment to InvestmentNews, but legal experts said it’s likely there will be an appeal.