Last December, Delaware Insurance Commissioner Trinidad Navarro proposed a rule that would ensure that financial professionals must act in the best interest of First State savers.
Now it’s official.
Commissioner Navarro and the Delaware Department of Insurance formally adopted the rule this week. This is a big win for consumer protection and for all Delaware residents planning for retirement.
The rule enacts the National Association of Insurance Commissioners’ (NAIC) updated model regulation on annuity transactions. The NAIC model and Delaware rule enhance the standards financial professionals must follow while ensuring that individual savers maintain access to, and information about, annuities.
Delaware is now the sixth state with a new law or regulation that incorporates the NAIC model’s additional protections, following Arizona, Arkansas, Iowa, Michigan and Rhode Island. Several other states are considering similar actions to protect their citizens.
These state actions also closely align with the Securities and Exchange Commission’s Regulation Best Interest, which took effect last year.
Because of these enhanced consumer protections, people know that financial professionals must act in the consumer’s best interestwhen offering recommendations about retirement savings products, including annuities. These standards protect consumers while also making sure middle- and working-class families will continue to be able to access sensible and simple-to-understand financial information.
Now more than ever, access to financial information is essential. Following the economic upheaval sparked by the COVID-19 pandemic, many Americans have concerns about their retirement security. Their worries can be eased through financial security tools, including annuities. Annuities are the only financial product in the marketplace that can provide guaranteed lifetime income.
Americans obtain useful information and education about annuities from financial professionals. Consumers need to have access to the peace of mind that comes from guaranteed income for life. And they deserve to have confidence that financial professionals must act in the consumer’s best interest when recommending annuity products.
Delaware’s adoption of the NAIC model provides First State consumers that assurance.
Vince Ryan is Regional Vice President, State Relations at the American Council of Life Insurers (ACLI). He is responsible for state legislative and regulatory affairs in Delaware, New Jersey, Iowa, South Dakota and Wyoming. He joined the ACLI in 2019 from the Delaware Insurance Department.
Diane R. Boyle is the senior vice president of government relations for the National Association of Insurance and Financial Advisors. Her responsibilities include the development and implementation of legislative and regulatory strategy, and daily execution of association activities to provide advocacy services for insurance and financial professionals to support a private, competitive insurance marketplace.
