Good News for Savers

While many of the newcomers came from out-of-state, others were homegrown. Utah has the nation’s highest birth rate and the largest households.

Not surprisingly, Utah was recently ranked as the happiest state in the country.

Now there’s even more good news coming from Utah.

Utah’s Insurance Department led by Commissioner Jon Pike recently adopted a new rule that incorporates the enhanced consumer protections in the National Association of Insurance Commissioners (NAIC) updated model regulation on annuity transactions. This is wonderful news for the more than 3.3 million residents of the Beehive State.

The rule enhances the standards financial professionals must follow and protects consumers’ access to, and information about, annuities, the only financial product in the marketplace that can provide guaranteed income for life. Thanks to this new rule, all Utah residents will be in a strong position to achieve financial security and prosperity for their entire lives.

Utah became the 41st state to adopt similar laws or rules. Residents in more than 80% of the United States now benefit from a best interest standard of care. Building on this momentum, more states are considering similar measures to further protect their residents.

The actions in the states closely align with the Securities and Exchange Commission’s Regulation Best Interest. And, unlike the Department of Labor’s ill-advised fiduciary-only proposal, these measures ensure savers, particularly financially vulnerable lower- and middle-income Americans, can access information about different options for long-term security throughout retirement. According to a study, a fiduciary-only approach would shut down access to financial inclusion for 10 million households. Another survey shows that retirement savers overwhelmingly want the option to work with any type of financial professional who is offering products and services that meet their needs.

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 state and federal protections safeguard consumers while also 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.

The remaining states should adopt this practical 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 in the United States they reside or how big their family is.

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).