The Indiana Department of Insurance, led by Commissioner Amy Beard, has adopted a new rule that strengthens protections for consumers seeking lifetime income through annuities. Indiana is the 45th state to adopt a measure that closely tracks the ‘best interest of consumer enhancements’ in the National Association of Insurance Commissioners (NAIC) Suitability in Annuity Transactions Model Regulation. These new laws and regulations also align with the SEC’s Regulation Best Interest, providing consumers with comprehensive state and federal protections. Over 90% of Americans now live in a state that has adopted a best interest standard for annuities.
“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,” said American Council of Life Insurers (ACLI) President and CEO Susan Neely. “With these enhanced state and federal consumer protections, millions of savers in Indiana and across the country can be confident that financial professionals must act in the consumer’s best interest when offering recommendations about annuities. We believe that the remaining states will adopt these sensible protections soon, ensuring all consumers can benefit for a best interest standard regardless of where they call home.”
“The new rule adopted by Commissioner Beard and the department is a victory for annuity consumers in the Hoosier state,” said Association of Indiana Life Insurance Companies (AILIC) Executive Director and Legislative Counsel Trent Hahn. “It enhances standards financial professionals in Indiana must follow and protects consumers’ access to, and information about, annuities, the only financial product in the marketplace that can provide guaranteed income for life. The new rule is a much more sensible approach to safeguarding consumers than the ill-advised fiduciary-only regulatory package proposed by the U.S. Department of Labor. A similar Labor Department regulation in 2016 resulted in more than 10 million American workers’ accounts losing access to professional financial guidance.”
“Indiana’s new rule is in line with the real-world needs of retirement savers,” said Daniel Stallings, NAIFA-Indiana Past President. “Research shows that middle-income retirement savers would be very concerned about a regulation keeping them from accessing the professional financial guidance they want and need. Unlike the Labor Department’s fiduciary-only proposal, the best interest standard adopted in Indiana and the vast majority of the states, ensures that all savers, particularly financially vulnerable middle-income Americans, can access information about different choices for long-term security in retirement.”
Indiana’s best interest rule will become effective July 1, 2024.