Iowa and Arizona are the first states to introduce measures that would implement a model standard of care for annuity sales developed by the National Association of Insurance Commissioners (NAIC). NAIFA chapters in both states successfully advocated for the NAIC model.
NAIFA-Iowa held a state advocacy day on February 19, which featured remarks by Iowa Insurance Commissioner Doug Ommen and meetings between NAIFA members and their state legislators. Ommen serves as the state securities regulator and helped lead the NAIC’s effort to develop the model. NAIFA-Arizona held a state advocacy day in January, during which NAIFA members raised the standard of care issue with lawmakers.
The Iowa Insurance Division proposed an annuity-sales best interest regulation based on the NAIC model on February 27, eight days after the “NAIFA-Iowa Day on the Hill.”
The Arizona state Senate in late February overwhelmingly passed the “Annuity Transactions: Requirements” act, also based on the NAIC model. The House is now considering the bill.
NAIFA worked with the NAIC to ensure the model provides strong protections for consumers, by requiring financial professionals to work in the best interests of their clients, without damaging advisor-client relationships or reducing Main Street investors’ access to financial products, services, and guidance.
NAIFA submitted comment letters and participated in meetings of the NAIC working group that developed the model. NAIFA’s suggestions helped shape the working group’s final product, and many were included in the model.
“The NAIC’s annuity sales model is a great example of how NAIFA’s recognized expertise is helping policymakers create laws and regulations that benefit consumers as well as the insurance and financial professionals who serve them,” said NAIFA CEO Kevin Mayeux, CAE. “NAIFA is pleased to support the NAIC model, which reflects the spirit and intent of our Code of Ethics requiring NAIFA members to work in the best interests of their clients.”
NAIFA encourages every state to adopt the NAIC model. This would provide strong protection for consumers nationwide and consistent rules for financial professionals, eliminating the confusion and contradictions a patchwork of state laws and regulations would cause. The NAIC model also works in harmony with the federal Security and Exchange Commission’s Regulation Best Interest.