With no direct roads to Juneau, it’s not easy to get in or out of Alaska’s state capital.
But you don’t need a ferry or a plane ticket to spread enhanced consumer protections across Alaska’s 663,268 square miles.
Alaska’s Division of Insurance led by Director Lori Wing-Heier 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 Alaska residents.
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 new rule, all Alaska residents from Juneau to north of the Arctic Circle to the farthest reaches of the Aleutian Islands will be in a better position to achieve financial security and prosperity for their entire lives.
Alaska became the 29th state to adopt similar laws or rules. Building on this momentum, several more states are considering similar measures to protect their residents.
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 shut down access to financial inclusion for 10 million households. And a new survey finds 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 be assured that financial professionals must act in the consumer’s best interest 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 will retain access to easy-to-understand financial information.
More states should adopt this sensible consumer protection. Then more Americans looking to protect their family’s financial future would benefit from a best interest standard of care, no matter where they reside.
Laura Leigh Latta is Regional Vice President, State Relations at the American Council of Life Insurers (ACLI). She is responsible for state legislative and regulatory affairs in Alaska, Kentucky, Louisiana, Mississippi, Tennessee, and West Virginia. Laura Leigh leads ACLI’s advocacy team on issues related to tax, unclaimed property, and state guaranty associations.
Lanet Spence, NAIFA-Alaska Vice President of Advocacy, is from Anchorage, AK.