What do Chicago, Rock Island and Decatur, Illinois, have in common?
They boasted three of the National Football League’s charter franchises in 1920: the Chicago Tigers, the Rock Island Independents and the Decatur Staleys. Two years later, the Staleys moved and became the Chicago Bears.
More than a century later, those historic Illinois cities are linked once again. But this time so are every other town and city in the Land of Lincoln, thanks to the state’s Department of Insurance.
Led by Director Dana Popish Severinghaus, the Insurance Department recently adopted a new rule that incorporates the enhanced consumer protections in the National Association of Insurance Commissioners (NAIC) updated model regulation on annuity transactions. This is great news for everyone from Illinois.
The rule enhances the standards financial professionals must follow while ensuring that individual savers maintain access to, and information about, annuities, the only financial product in the marketplace that can provide guaranteed income for life. Thanks to this robust new consumer protection rule, all Illinois residents will be in a strong position to achieve financial security and prosperity through retirement.
Illinois became the 32nd state to adopt similar laws or rules. Momentum is growing as several additional states are considering related measures to protect their citizens.
The actions in the states closely align with the Securities and Exchange Commission’s Regulation Best Interest. And, unlike a fiduciary-only approach, these measures ensure savers, particularly financially vulnerable lower and middle-income Americans, can access information about different choices for long-term security through retirement. According to a recent study, a fiduciary-only approach would curtail access to financial inclusion for 10 million households. Another survey found that middle-income retirement savers would be very concerned about a regulation that restricted access to the professional financial guidance they want and need.
With these enhanced state and federal consumer protections, savers can rest assured that financial professionals must act in the consumer’s best interest when offering recommendations about annuities. The state and federal protections safeguard consumers while also ensuring that middle-income and working-class families will maintain access to easy-to-understand financial information about lifetime income. The U.S. Congress reaffirmed the importance of lifetime income when it passed legislation in 2019 and 2022 to make it easier for employers to include annuities in workplace retirement plans and simpler for savers and retirees to utilize annuities that fit their needs.
More states should adopt this practical consumer protection. Then more Americans looking to protect their family’s financial future would benefit from a best interest standard of care, regardless of where they live or whether their hometown ever had an NFL team.
Karen Melchert is Regional Vice President, State Relations for the American Council of Life Insurers (ACLI). She administers the legislative and regulatory relationships regarding the life insurance industry in Illinois, Michigan, New Mexico, Ohio and Utah and is the ACLI lead advocate for the National Council of Insurance Legislators (NCOIL).
![Picture of Illinois state sign, reads [Welcome to Illinois, The Land of Lincoln, From the People of Illinois]](https://impact.acli.com/wp-content/uploads/2023/02/022323_impact-580x386.66666666667@2x.png)
Laura Minzer is President of the Illinois Life and Health Insurance Council, an association of 31 insurance companies who offer a wide range of life, retirement, disability income, supplemental, accident and health insurance products in this state. The Council promotes and advocates for a healthy and competitive life and health insurance industry to support the financial well-being of employers, individuals, and families in Illinois.
Dennis Dean, President of NAIFA-IL, is from Chicago.