From its earliest days as a colony, Massachusetts has been a leader in providing its citizens access to education. So it’s no surprise that Massachusetts has taken action to ensure that its residents will be able to access crucial information that can enhance their financial security.
The Massachusetts Division of Insurance recently adopted a new rule that incorporates the enhanced consumer protections in the National Association of Insurance Commissioners’ updated model regulation on annuity transactions.
The rule enhances the standards financial professionals must follow while ensuring that individual savers retain access to, and information about, annuities, the lone financial product in the marketplace that can provide guaranteed lifetime income. This is a major victory for Bay State savers.
Massachusetts is the 30th state to adopt similar rules or laws protecting their citizens. Now residents in three out of every five states are covered. Building on this momentum, several other states are considering similar 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 restrict 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 rest assured that financial professionals must act in the consumer’s best interest when offering recommendations about annuities. The U.S. Congress confirmed 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-income and working-class families will retain access to easy-to-understand financial information.
America’s first public school and first university were founded in Massachusetts. As America grew, more states followed Massachusetts’s lead.
The 20 states that have not yet adopted best interest rules should also follow Massachusetts’s lead. Then American consumers looking to protect their family’s financial future would benefit from a best interest standard of care, no matter where they live.
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.
Josh O’Gara, President of NAIFA-MA, is from Woburn, Massachusetts.