American Council of Life Insurers (ACLI) President and CEO Susan Neely and National Association of Insurance and Financial Advisors (NAIFA) South Carolina President Johnny Craven issued the following joint statement on the best interest annuity rule adopted recently by Acting Director Michael Wise and the South Carolina Department of Insurance:
“A new rule adopted by Acting Director Michael Wise and the South Carolina Department of Insurance boosts protections for consumers seeking lifetime income through annuities. It provides Palmetto State savers confidence the financial professional they work with is acting in the best interest of consumers.
“South Carolina is now the 24th state that as part of a nationwide, bipartisan effort has adopted enhanced protections that 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 hope that other states continue this momentum and adopt these sensible protections so that more consumers can benefit from a best interest standard of care.”