American Council of Life Insurers (ACLI) President and CEO Susan Neely and NAIFA-SD President Jennifer Soma issued the following joint statement on the best interest annuity law recently signed by South Dakota Governor Kristi Noem:
“The new law approved by the South Dakota legislature and signed by Governor Kristi Noem strengthens protections for consumers in the Mount Rushmore State seeking lifetime income in retirement through annuities.
“Their actions add to the nationwide momentum behind enhanced standards for financial professionals recommending annuities. South Dakota joins 20 other states that have adopted new laws and regulations 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 to retirees when it passed legislation in 2019 that made it easier for employers to include annuities in workplace retirement plans. The protections adopted in South Dakota and 20 other states safeguard consumers while also ensuring that middle- and working-class families retain access to annuities.
“We hope additional states will follow South Dakota’s lead and adopt this important consumer protection so that more consumers can benefit from a best interest standard of care no matter where they live.”