Michigan and Arkansas have become states number four and five to adopt a best interest annuity rule based on the National Association of Insurance Commissioners’ (NAIC’s) revised Suitability in Annuity Transactions Model Regulation.
Michigan Gov. Gretchen Whitmer signed the measure into law on Dec. 29. The Arkansas Department of Insurance approved its rule on the same day.
The model aligns with the Security and Exchange Commission’s Regulation Best Interest and provides significant consumer protections:
NAIFA is working with the American Council of Life Insurers (ACLI) as advocacy partners to promote the adoption of the NAIC model in every state to ensure consistent, common-sense protections for consumers.
Recent research conducted by LIMRA shows that despite regulatory concern over conflicts of interest, nine in ten consumers agree that their financial professionals always put their interests first. NAIFA believes that a consistent, uniform standard of care for annuity recommendations will help alleviate regulatory attempts to put in place standards that would be disruptive to NAIFA’s members’ business practices and unintentionally reduce consumers' choices and access to financial products and services.
“States that adopt the NAIC model, as written, essentially reject a fiduciary-only approach,” said NAIFA State Chapter Director Julie Harrison. “The model, along with the SEC’s Regulation Best Interest, serves as a common-sense combination of policies that will enhance protections for consumers who want to purchase guaranteed lifetime income in retirement through annuities.”