Nearly two years ago, the Fifth Circuit Court of Appeals struck down the Department of Labor’s misguided fiduciary regulation.
That momentous decision triggered a series of thoughtful, well-reasoned measures by lawmakers and regulators in Washington, D.C., and across the country. These ongoing actions are part of a nationwide movement to provide American consumers the protections they deserve while helping them plan and save for retirement.
Last June, the Securities and Exchange Commission (SEC) introduced its new Regulation Best Interest (Reg BI). Reg BI requires broker-dealers to comply with specific obligations to ensure they are acting in the best interest of their customers. It also preserves the right of consumers to choose the type of advice they get and how they’ll pay for it.
Earlier this month, the National Association of Insurance Commissioners (NAIC) nearly unanimously adopted an enhanced Suitability in Annuity Transactions Model Regulation. The NAIC carefully aligned its model with Reg BI. With the NAIC model, consumers receive better information, in plain English, to help them make informed decisions, while also retaining access to valuable financial services.
Together, Reg BI and the NAIC’s model regulation will ensure consumers have uniform state and federal protections regardless of where in the United States they live.
Just last week Iowa introduced its best interest rules to protect consumers in accordance with the NAIC’s model. Arizona has also advanced a bill through its Senate.
And, Massachusetts recently adopted a rule that largely aligns with Reg BI and reflects a very constructive improvement over an earlier proposal.
At least a dozen states may adopt rules mirroring the NAIC model this year. Hopefully, dozens of additional states will follow their lead in the years ahead.
America is driving toward a uniform, harmonized best interest standard of care. And America’s consumers will be better off for it.
Susan K. Neely was President and CEO of the American Council of Life Insurers (ACLI), the nation’s leading trade association determined to help families live better lives by achieving financial security and certainty. As president and CEO, Neely drove public policy and advocacy on behalf of ACLI’s member companies that represent 93 percent of industry assets and serve 90 million families. She is CEO Emeritus through December, 2024.
