After every home football game victory, University of West Virginia fans stand and sing John Denver’s “Take Me Home, Country Roads.” Now West Virginia residents have something else to sing about — and they don’t have to be a football fan to join in.
Insurance Commissioner Allen McVey and his colleagues recently adopted a rule that incorporates enhanced consumer protections outlined in the National Association of Insurance Commissioners’ (NAIC) updated model regulation on annuity transactions.
The new rule enhances the standards financial professionals must adhere to, 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. This is a huge victory for all West Virginia savers.
West Virginia joins a growing list of states to adopt similar laws or regulation. Residents in more than 2/3rds of the United States now benefit from a best interest standard of care and, building on this momentum, several additional states are considering similar measures to protect their citizens.
Action in the states closely aligns with the Securities and Exchange Commission’s Regulation Best Interest. Unlike a fiduciary-only approach, these measures ensure that savers, particularly financially vulnerable lower and middle-income Americans, can access information about different choices for long-term security throughout retirement. According to a recent study, a fiduciary-only approach would restrict access to financial inclusion for 10 million American households. Another survey found that middle-income retirement savers would be very concerned about a regulation that keeps them from working with a financial professional on their retirement security needs.
With these enhanced state and federal consumer protections, savers in West Virginia and 35 other states can be assured that financial professionals must act in the consumer’s best interest when offering recommendations about annuities. Critically, these protections safeguard consumers while at the same time ensuring that middle- and working-class families will retain access to financial information. 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.
More states should follow West Virginia and adopt this practical consumer protection. Then more Americans working to protect their family’s financial future would benefit from a best interest standard of care, whether they can carry a tune or not.