Mississippi is known for its magnificent magnolias. Its state tree is the magnolia. Its state flower is the magnolia. Its nickname is The Magnolia State.
But the state might also become known for its magnificent consumer protection, thanks to recent action by the Mississippi Insurance Department.
The Department recently adopted a new regulation that incorporates the enhanced consumer protections in the National Association of Insurance Commissioners (NAIC) updated best interest model regulation on annuity transactions.
The regulation raises the standards financial professionals must meet while ensuring that individual Mississippi savers maintain access to, and information about, annuities, the only financial product in the marketplace that can provide guaranteed income for life.
This means Mississippi savers can now be sure that financial professionals must act in the consumer’s best interest when offering recommendations about annuities.
This is a huge triumph for Mississippi savers.
Mississippi joins 17 other states that have adopted or enacted similar regulations or laws. Building on this momentum, several more states are considering similar measures to protect their residents.
The consumer actions in these states align closely with the Securities and Exchange Commission’s Regulation Best Interest, which took effect last year. And, 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 in retirement. According to a new 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 when it passed legislation in 2019 that made it easier for employers to include annuities in workplace retirement plans. These protections safeguard consumers while also ensuring that middle- and working-class families retain access to annuities.
More states should follow Mississippi’s lead and implement this sensible consumer protection. Then, more consumers working to protect their family’s financial future would benefit from a best interest standard of care, no matter where they live.
(George B. Pickett, a member of the NAIFA Government Relations Committee, is from Flowood, Mississippi.)
Jana Lee Pruitt was a Regional Vice President in the State Relations Department at the American Council of Life Insurers. She was responsible for state legislative and regulatory affairs in Alaska, Kentucky, Louisiana, Mississippi, Tennessee and West Virginia. She also led ACLI’s state advocacy teams on the issues of guaranty associations and insurance data security.
George B. Pickett, a member of the NAIFA Government Relations Committee, is from Flowood, Mississippi.
