In February 2020, the National Association of Insurance Commissioners (NAIC) adopted revisions to the Suitability in Annuity Transactions Model Regulation to incorporate a Best Interest standard of care. HB 1160 reflects these amendments.
Kraft testified that annuities are complex products, providing lifetime income guarantees, and design options based on the needs of the consumer and therefore merit a best interest of the consumer standard of care.
“Best interest says, ‘I’m going to put my clients interests in front of my own, and I’m going to meet our obligations,’” Kraft said. “In North Dakota, these are values that we believe in. Not all my friends are my clients. But I want to know that whoever they are working with is putting my friend's best interest ahead of their own.”
The bill easily passed through the House and was adopted in the Senate Committee on the same day of Kraft’s testimony.
NAIFA members subscribe to a Code of Ethics that require them to put clients’ interest first. NAIFA is encouraging all states to adopt the NAIC amendments on best interest.