At the Perfect Time

Aug 8, 2022

Before long, Colorado will welcome its 6 millionth resident.

Whether they are an infant or a transplanted retiree, the new Coloradoan will be arriving at the perfect time. That’s because of a recent Colorado state rule that puts all of its residents – new and old – in a better position to achieve financial security and prosperity for their entire lives.

Colorado Insurance Commissioner Michael Conway and his colleagues at the Division of Insurance recently adopted a rule that incorporates the enhanced consumer protections in the National Association of Insurance Commissioners (NAIC) updated model regulation on annuity transactions.

The law 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. This is an epic triumph for Centennial State citizens.

Colorado became the 28th state to adopt similar laws or rules. Building on this momentum, several additional states are considering comparable 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 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 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 follow Colorado and 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 or when they arrive.

Karen Melchert

Karen Melchert is Regional Vice President, State Relations for the American Council of Life Insurers (ACLI). She administers the legislative and regulatory relationships regarding the life insurance industry in Illinois, Michigan, New Mexico, Ohio and Utah and is the ACLI lead advocate for the National Council of Insurance Legislators (NCOIL).

Brent Jones

Brent Jones, a member of the NAIFA-CO Government Relations Committee, NAIFA-CO Political Action Committee Chair and Principal & Owner of Jones Financial Design, is from Denver, Colorado.