NAIFA State Advocacy Roundup

NAIFA's state-level advocacy work is second-to-none, with state chapters and members providing expertise and influence to shape legislation and regulations impacting NAIFA members' businesses and clients across the country.

Whether it's providing expert testimony, discussing proposed laws with state legislators, or writing the the state insurance commissioner, NAIFA members have been engaged and influential. Below is a summary of the excellent work during the first five months of 2021, driven mainly by NAIFA members, the true champions for a fair and positive working profession.

Best Interest

NAIFA continues to work with coalition members to enact the "best interest" standard of care language found in the NAIC's model on annuity transactions. At this point, eleven states have adopted the language, and we expect to add a few more over the next few months.

Alabama, Kentucky, and Nevada have proposed draft legislation or regulations that omit the NAIC's best interest language. NAIFA has been leading efforts to influence the direction those states are heading in (and we recently found out those efforts were successful in Alabama!).

The New York Supreme Court, Appellate Division ruled that state insurance Regulation 187 is unconstitutional. The ruling cited a similar lawsuit filed by the NAIFA chapter after Reg 187 was adopted. NAIFA views this as a good opportunity for the state to consider adoption of the NAIC model language.

State-Run Retirement

More than 30 bills on state-run retirement plans have been introduced this past legislative session. NAIFA members have been front and center on the issue – testifying, contacting their officials, and submitting letters to oppose these bills that would establish state-run retirement plans for private-sector workers and require certain employers to auto-enroll their employees in these plans.

Paid Family Medical Leave

There are 45 pending bills in various states to create some version of state-run paid family leave programs. The issue continues to be a priority for our members. We have identified some terrific NAIFA members who specialize in disability products who continue to be excellent advocates for the issue.

Washington Saves

NAIFA-WA's advocacy was an important factor leading to the adoption of crucial amendments to the Washington Long-Term Care Trust Act. The Trust was recently created to provide up to $36,500 in lifetime benefits for eligible beneficiaries to apply to the cost of their long-term care. The LTSS Trust Program is funded through a 0.58 percent premium assessment on an employee's wages.

The original intent of the bill was to allow employees to opt-out as they acquire private-sector long-term care service products. The opt-out was supposed to be used at any time, but a limitation was established in 2020. The recently passed, NAIFA-supported amendments extend the deadline for a person to purchase long-term care insurance and opt out of the state program to November 1, 2021. A second adopted amendment requires the long-term services and supports (LTSS) Trust Commission to work with insurers to develop long-term care insurance products that supplement the LTSS Trust program's benefit.

Other Issues of Note

• In Maine, NAIFA members have been fighting for thirty years to get the state’s 2% NQ annuity premium tax repealed, and efforts are finally paying off. LS 1062 is finally moving through the committee process!
• Montana recently adopted a law to end its practice of unisex rating for all insurance. NAIFA members helped draft the bill, worked with the commissioner, and testified in person.
• NAIFA-IN worked really hard on a bill to replace the Indiana Long-Term Care Insurance Program with a Deficit Reduction Act Partnership. While the RWJ Partnership served a meaningful purpose in incentivizing consumers to take personal responsibility for long-term care risks, it suffers from inflexible policy and special filing requirements, as well as burdensome inflation-protection requirements, that have resulted in many insurers dropping out of the program. The bill has passed.
• After several years of discussions and meetings with the insurance commissioner and lawmakers, NAIFA-IA secured a win recently when the Senior Financial Fraud Prevention bill passed both legislative chambers. We expect the governor’s signature soon.
• NAIFA-HI worked with coalition partners to secure the passage of HB 940, a bill that mandates reporting of suspected financial exploitation of elders and vulnerable adults in relation to securities. The bill provides immunity for good faith reporting and authorizes the delay of disbursements and transactions.
• In Louisiana, a recent bill to redefine independent contractors snuck up on us. The bill itself wasn’t a direct threat to our members. The sponsor immediately said he had no intention of producers being lumped into the new definition. However, NAIFA and our advocacy partners at ACLI saw this is a good chance to pursue general exemption language that would apply to anyone licensed by the Louisiana Department of Insurance, and any broker-dealer or independent advisor registered with the SEC or FINRA or licensed by the State of Louisiana. The amendments were adopted on the Senate floor in early May.
• Earlier this year, a NAIFA member provide very compelling testimony during an NAIC hearing on diversity and inclusion.
• NAIFA-IL drafted and is driving SB 2112 through the Illinois legislature. The bill makes it harder for life insurance policies to be cancelled due to lapsed premium payments by strengthen notification processes.  The bill recently passed the Senate unanimously on a vote of 59-0.
• NAIFA-AR drafted and helped enacted HB 1801, a bill to prohibit a change to a designated or named beneficiary of a life insurance policy or annuity contract through a will. The new law removes the exception for Arkansas that made it one of the only states to hold that a change of beneficiary of a life insurance policy can in fact be accomplished in a will.

State Advocacy on a Roll!

Many NAIFA state chapters have been quick to adapt to the COVID-19 advocacy environment, and have been able to hold virtual legislative action days. So far, NAIFA-CA, NAIFA-IA, NAIFA-FL, NAIFA-ME, NAIFA-MN, NAIFA-TX, NAIFA-SC, NAIFA-AR, NAIFA-PA, and NAIFA-WI have held their events, which have been well-attended. Speakers at state legislative days have included state legislators and insurance commissioners.

NAIFA has lobbyists on the ground in state capitals working on important issues, but those lobbyists are sure to utilize NAIFA members’ voices whenever possible. This past legislative season, at least a dozen NAIFA members have testified on five different topics during in-person and virtual legislative hearings.