The Ohio Department of Insurance has finalized a rule based on the National Association of Insurance Commissioners’ updated Suitability in Annuity Transactions Model that requires financial professionals to work in the best interests of consumers on annuity transactions. The new rule goes into effect in Ohio on Feb. 14.
The model increases consumer protections while preserving the ability of insurance and financial advisors to serve Main Street clients. It allows consumers to choose to work with advisors who offer various compensation models. The Model also aligns with the Security and Exchange Commission’s Regulation Best Interest, avoiding potential confusion and contradictions differing state regulations could cause.
“The Department of Insurance with this rule assures consumers in Ohio that financial professionals discussing annuity products are acting in the consumers’ best interests,” said NAIFA Senior Vice President of Government Relations Diane Boyle. “NAIFA supports state laws and regulations based on the NAIC model that bolster consumer protections while enabling producers to continue providing financial security products and services to Main Street Americans. NAIFA members abide by a strong Code of Ethics that requires them to always work for their clients’ best interests, but rules like this one in Ohio can give consumers added peace of mind.”
NAIFA and NAIFA-Ohio submitted a comment letter to the state Department of Insurance this past summer commending Ohio’s leadership role in developing the model revisions. NAIFA was an active participant in the development of the NAIC revisions, and the adoption by the states of these revisions is a top advocacy priority for NAIFA.
Ohio joins Arizona, Arkansas, Delaware, Iowa, Michigan, and Rhode Island as states that have rules or legislation based on the NAIC Model.