Advocacy in action blog

NAIFA-Delaware and the American Council of Life Insurers (ACLI) have commended Delaware Insurance Commissioner Trinidad Navarro for proposing a best interest annuity rule based on the National Association of Insurance Commissioners’ (NAIC’s) revised Suitability in Annuity Transactions Model Regulation.

NAIFA continues to urge the states to consider and adopt recent amendments to the NAIC’s Suitability in Annuity Transactions Model Regulation, and NAIFA state chapters should reach out to their state’s insurance commissioner or director and encourage him/her to support and promote the adoption of the NAIC amendments. The adoption of these amendments by the states remains a top advocacy priority for NAIFA.

Bradford Campbell, a partner with the law firm Faegre, Drinker, Biddle & Reath, testified today on behalf of NAIFA and several other industry organizations at the U.S. Department of Labor’s Administrative Hearing on the Proposed Class Exemption Regulation “Improving Investment Advice for Workers & Retirees.”

Maryland’s new Insurance Commissioner, Kathleen Birrane, had an opportunity to introduce herself to the state’s insurance agents and financial advisers on August 25 during a townhall webinar with NAIFA-MD, the Maryland Association of Health Underwriters and Maryland Insurance Agents and Brokers.

NAIFA President Cammie Scott submitted a comment letter on behalf of NAIFA that generally supports the Department of Labor’s proposed class exemption for investment advice fiduciaries under ERISA and the Internal Revenue Code and makes several suggestions to improve the proposal.

The U.S. Department of Labor has proposed a new rule to govern the standard of care for producers providing consumers with retirement guidance and products. NAIFA was a part of the lawsuit, along with the American Council of Life Insurers and other groups, that resulted in the DOL’s original fiduciary rule being struck down by the Fifth Circuit Court of Appeals in 2018. The new proposal would create a “best interest” prohibited transaction exemption (PTE) for ERISA- and Internal Revenue Code-covered investment advice fiduciaries.

In an opinion published last Friday, the Second Circuit Court of Appeals upheld the validity of the SEC’s Regulation Best Interest and rejected the challenge to the rule which had been filed last fall by a group of state attorneys general and several private financial firms. The court did not agree with the plaintiffs’ claim that the Dodd Frank Act required the SEC, if it chose to act, to adopt a standard of conduct for broker-dealers that paralleled the fiduciary standard applicable to investment advisers under the Investment Advisers Act.

Ohio’s Department of Insurance recently proposed updates to its “3901-6-13 Suitability Annuity Transactions” rule.  The state’s Director of Insurance, Jillian Froment, chaired the National Association of Insurance Commissioner’s Annuity Suitability Working Group while the working group crafted revisions to the NAIC’s “Suitability In Annuity Transactions Model Regulation (#275).”  As expected, the Ohio proposal is similar to the model. It establishes a new standard of conduct that goes beyond the rule’s current suitability standard, but it is not a fiduciary standard. 

Arizona Governor Doug Ducey signed into law SB 1557 on Friday June 5, 2020. The measure will amend the state’s requirements governing annuity recommendations and sales by requiring producers and insurers to act in the best interest of annuity purchasers and to not put their own financial interests ahead of the consumers’ interest. These revisions track amendments made earlier this year by the National Association of Insurance Commissioners to the NAIC Suitability in Annuity Transactions Model Regulation, which aligns well with the SEC’s Regulation Best Interest and will raise the standard of care required of financial professionals while preserving consumers’ access to valuable financial advice, services and products.

On May 11 Iowa insurance regulators adopted revisions to the state’s regulations on annuity recommendations and sales to require producers and insurers to act in the best interests of annuity purchasers. Under the revised rules, producers must not put their own financial interests ahead of consumers’ interests. These revisions track amendments made earlier this year by the National Association of Insurance Commissioners (NAIC) to the NAIC Suitability in Annuity Transactions Model Regulation, which aligns well with the SEC’s Regulation Best Interest and will raise the standard of care required of financial professionals while preserving consumers’ access to valuable financial advice, services, and products.