Vermont has more than 100 covered bridges. It produces three times as much maple syrup as any other state. And it’s the home of Ben and Jerry’s iconic ice cream.
But now Vermont has another claim to fame — and this one is sure to last longer than a pint of Cherry Garcia.
Vermont recently adopted a rule promoted by Department of Financial Regulation Commissioner Kevin Gaffney that incorporates the enhanced consumer protections in the National Association of Insurance Commissioners updated model regulation on annuity transactions. Vermont became the 42nd state to adopt these measures.
The new rule enhances the standards financial professionals must follow and protects consumers’ access to, and information about, annuities, the only financial product in the marketplace that can provide guaranteed income for life. Thanks to this important consumer protection rule, every resident of the Green Mountain State will be in a strong position to achieve financial security and prosperity throughout retirement.
Nearly 80% of Americans now live in a state with a best interest standard for annuity sales. Building on this momentum, most of the remaining states are considering related measures to further protect their citizens.
The actions in the states closely align with the Securities and Exchange Commission’s Regulation Best Interest. And, unlike the Department of Labor’s ill-advised fiduciary-only proposal, these harmonized measures ensure savers, particularly financially vulnerable middle-income Americans, can access information about annuities and information about other options for their retirement savings.
The DOL’s proposal is similar to its failed 2016 regulation that, before it was struck down by a federal court, resulted in more than 10 million American workers’ accounts, with $900 billion in savings, losing access to professional financial guidance. A recent survey shows that retirement savers overwhelmingly want the freedom to work with any kind of financial professional who is offering products and services that meet their needs.
With these enhanced state and federal consumer protections, savers can be confident 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 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.
Hopefully, the remaining states that lack this best interest consumer protection will join Vermont and the rest of the country before long. Then all Americans working to protect their family’s financial future could benefit from a best interest standard, no matter what their favorite ice cream flavor is.
Jill Rickard is Regional Vice President, State Relations, at the American Council of Life Insurers (ACLI). She is responsible for state legislative and regulatory affairs in Connecticut, Massachusetts, New Hampshire, Rhode Island, and Vermont. She also leads ACLI’s advocacy team on matters related to paid family & medical leave, indexed universal life insurance, and impact investing. She joined ACLI in 2021.
NAIFA-VT President Tyler Wood is from South Burlington, Vermont.