The life insurance industry supports a standard of care under which financial professionals are required to act in the best interest of consumers. That means:
Fortunately, this standard of care exists. The National Association of Insurance Commissioners (NAIC) revised model regulation on annuity transactions together with the Securities and Exchange Commission’s (SEC) Regulation Best Interest (Reg BI) provide a robust framework that protects Americans planning and saving for the future and managing their retirement nest eggs.
More than one-third of these United States have already adopted rules or laws patterned after the NAIC model including Delaware, Michigan and Texas. Momentum is building as more states are pursuing similar actions.
With these enhanced state and federal consumer protections, savers can rest assured that financial professionals must act in the consumer’s best interest and not place their own interests ahead of the consumer’s when offering recommendations about annuities. 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.
Preserving access to financial tools and information is especially critical nowadays. The economic upheaval sparked by COVID-19 has raised concerns about retirement security for many Americans, especially those in underserved communities. These worries can be eased through prudent financial security tools, including annuities, which can provide income that retirees cannot outlive.
ACLI is working to have all 50 states and the District of Columbia adopt these sensible consumer protections. That way every American will be able to benefit from a best interest standard of care, regardless of where they live.
Michelle Carroll Foster is Chief Inclusion Officer at the American Council of Life Insurers (ACLI). She joined ACLI in 2019.
