American Council of Life Insurers (ACLI) President and CEO Susan Neely and NAIFA-NM Vice President of Advocacy Kenneth Bottari issued the following joint statement on the best interest annuity rule adopted recently by the New Mexico Office of the Superintendent of Insurance:
“The new rule adopted by the New Mexico Office of the Superintendent of Insurance gives people in the Land of Enchantment confidence that the financial professionals they are working with are acting in consumers’ best interest.
“New Mexico becomes the 20th state that as part of a nationwide, bipartisan effort has adopted enhanced protections for people seeking lifetime income in retirement through annuities. These new laws and regulations align with the ‘best interest of consumer enhancements’ in the National Association of Insurance Commissioners (NAIC) Suitability in Annuity Transactions Model Regulation. They also harmonize with the SEC’s Regulation Best Interest.
“Unlike a fiduciary-only approach, these measures ensure that all savers, particularly financially vulnerable middle-income Americans, can access information about different choices for long-term security throughout retirement. According to a recent study, a fiduciary-only approach would limit choices for consumers, reduce savings of nearly 3 million people by $140 billion and widen the racial wealth gap by 20%.
“The U.S. Congress reaffirmed the importance of lifetime income when it passed legislation in 2019 that made it easier for employers to include annuities in workplace retirement plans. These protections safeguard consumers while also ensuring that middle- and working-class families retain access to annuities.
“We look forward to seeing additional states adopt this important consumer protection so that more consumers can benefit from a best interest standard of care.”