Life insurance is one of the core tools in wealth management. It replaces income for families, funds the payment of estate taxes, and, given its tax advantages, can serve as an investment vehicle. However, the culture of life insurance, its sales process and its regulatory framework live apart from the world of stocks and bonds.

To that end, there is a new framework in New York that is changing the way life insurance is presented to clients: Rule 187. This rule and the law that surrounds it is in contrast to the way in which life insurance has been traditionally presented. It imposes a new “best interest” standard and recognizes the importance of an accurate demonstration of the COSTS of insurance to clients. And for the wealth advisers and fiduciaries out there, Rule 187’s reach goes far beyond the borders of New York.


Steven serves as a Managing Director of Wealth Management at KB FINANCIAL and is a recognized expert in applying prudent investor guidelines to life insurance product selection. He works with large clients and advises individual and corporate trustees on their responsibilities around life insurance.

Steve will help us understand the practical application of Rule 187 and some of the potential future impacts on the business of life insurance nationwide. After this podcast, you should have a new appreciation for the way life insurance should be bought . . . and sold.

(As a reminder, this podcast is for education purposes and not investment advice. Securities Offered Through M Holdings Securities, Inc. A Registered Broker/Dealer, Member FINRA/SIPC. KB Financial is independently owned and operated.)

Outline: Fiduciary Responsibilities Around Life Insurance in NY-

Steven’s Background-

How is life insurance used? 

  • Income Replacement,
  • Estate Tax Funding,
  • Business Succession,
  • Investment Vehicle

How do most people think the word “fiduciary” works with life insurance?

  • How is it regulated nationwide? By state with guidance from NAIC
  • Why is NY different?  RULE 187 and the New “Best interest” standard
  • What court cases should high end advisors keep in mind?
  • Which advisers are affected? Trustees? NY

Why are the costs important? And to whom?

  • What is the important information in an insurance projection?
  • What information is usually missing and why is that important for NY compliance purposes?
  • The problem of co-mingling cost and performance metrics
  • From a 30K ft. level, how does that impact the allocation of premium dollars for clients?
    *Either save premium on current DB, or by more DB/current premium-

At what levels should this cost-based interaction be engaged?

  • What does look like for the NY advisers?
  • The advisor community in general? RIA’s? The Life Insurance Industry?

How do we stay in touch?
(Contact info etc . . . )


Useful articles around Life Insurance and RULE 187

Trust & Estates -A Shot Across the Bow – Veralytic Inc.  – (Using independent research)

DownloadDocumentFile.ashx (uniformlaws.org) – (Investigating Insurance Costs)

FINRA: 2210. Communications with the Public | FINRA.org – (Don’t compare illustrations side by side, disclose costs)

NYSDFS Regulations – Insurance: Final Adoption of First Amendment to Insurance Regulation

RULE 187 (11 NYCRR 224): Suitability and Best Interests in Life Insurance and Annuity Transactions (Care skill prudence diligence cost performance risk)

CFP: standards-of-professional-conduct.pdf (cfp.net) (care skill prudence diligence cost performance risk)

(Disclosure: Securities Offered Through M Holdings Securities, Inc. A Registered Broker/Dealer, Member FINRA/SIPC. KB Financial is independently owned and operated.)

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