A new rule adopted recently by the Illinois Department of Insurance provides greater safeguards for consumers seeking lifetime income from annuities. Illinois is the 32nd state to adopt a measure that implements the “best interest of consumer enhancements” in the National Association of Insurance Commissioners (NAIC) Suitability in Annuity Transactions Model Regulation. The new laws and regulations also align with the SEC’s Regulation Best Interest.
“The U.S. Congress reaffirmed the importance of lifetime income when it passed legislation in 2019 and 2022 that made it easier for employers to include annuities in workplace retirement plans,” said American Council of Life Insurers President and CEO Susan Neely. “The new rule in Illinois adds momentum to the nationwide push for protections that safeguard consumers while also ensuring that middle- and working-class families retain access to annuities. We urge more states to adopt this practical consumer protection so more consumers looking to protect their family’s financial future can benefit from a best interest standard of care, no matter where they reside.”
“The new rule adopted by Director Dana Severinghaus and the Illinois department enhances the standards financial professionals must follow while ensuring that individual savers maintain access to, and information about, annuities, the only financial product in the marketplace that can provide guaranteed lifetime income,” said Illinois Life and Health Insurance Council President Laura Minzer. “It represents an important victory for Illinois savers.”
“Unlike a fiduciary-only approach that limits choices for consumers, the new rule offers strong protections while making sure savers, particularly financially vulnerable middle-income Americans, can access information about options for long-term security throughout retirement,” said NAIFA-Illinois President Dennis Dean. “A recent survey finds that middle-income retirement savers would be very concerned about a regulation keeping them from accessing the professional financial guidance they want and need.”