American Council of Life Insurers (ACLI) President and CEO David Chavern and National Association of Insurance and Financial Advisors (NAIFA) Trustee Dennis Cuccinelli made the following comment on the best interest annuity rule approved today by the New Jersey Department of Banking & Insurance:
“With New Jersey’s action today, all 50 states have now adopted a best interest standard for annuity sales—an important milestone for consumers. This ensures people will get professional financial guidance they can trust on products that provides a reliable lifetime stream of income in retirement. At a time when millions of workers are nearing retirement without a pension, this kind of certainty matters more than ever.”
New Jersey Department of Banking & Insurance Commissioner Justin Zimmerman approved the rule, which incorporates the best interest protections from the National Association of Insurance Commissioners (NAIC) Suitability in Annuity Transactions Model Regulation. This pro-consumer measure also aligns with the SEC’s Regulation Best Interest to provide retirement savers with robust safeguards at the state and federal level.
Together, these models offer better protections for retirement savers than the U.S. Department of Labor’s fiduciary-only regulation that limited consumers’ access to retirement guidance and information. Before it was vacated by a federal court in 2018, the department’s 2016 regulation left more than 10 million American workers’ accounts, with $900 billion in savings, without access to professional financial guidance.
Each year through 2027, more than 4.1 million Americans will turn 65. Most will not have a defined benefit pension that provides a regular monthly income in retirement.
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. With these enhanced state and federal consumer protections in place, millions of savers across the country can be confident that financial professionals are offering guidance on annuities that are in the consumer’s best interest.
