A new rule adopted today by the Missouri Department of Insurance on annuities drew praise from both the American Council of Life Insurers (ACLI) and the National Association of Insurance and Financial Advisors (NAIFA).
The new best interest annuity rule strengthens safeguards for consumers seeking lifetime income through annuities, the groups said.
“Today’s actions take us one step closer to nationwide adoption of the ‘best interest of consumer enhancements’ in the National Association of Insurance Commissioners (NAIC) Suitability in Annuity Transactions Model Regulation. To date, 46 states accounting for over 90 percent of the U.S. population have adopted a best interest standard for annuity sales. These bipartisan laws and regulations also align with the SEC’s Regulation Best Interest, providing consumers with robust safeguards at the state and federal level,” ACLI President and CEO Susan Neely and NAIFA-Missouri President Craig Wright said in a joint statement.
The groups said this is preferable to the fiduciary-only approach adopted by the U.S. Department of Labor, as this new Missouri rule protects retirement savers without limiting their access to information about annuities.
“The best interest standard adopted in Missouri and other states ensures that retirement savers, particularly financially vulnerable middle-income Americans, can access information about different choices for long-term security in retirement. A consumer survey finds that middle-income retirement savers would be very concerned about a regulation keeping them from accessing the professional financial guidance they want and need,” Neely and Wright said.
The two officials said they hope that more states implement these protections so that more consumers can benefit from a best interest standard.