Iowa, Arizona Lead The Way on Best Interest
Separated by about 1,000 miles of farmland, mountains and desert, Iowa and Arizona are two very different states.
On first glance, the only thing they seem to have in common is their deep-rooted ties to the Chicago Cubs.
The Cubs’ spring training facility has been in Arizona for more than 60 years. And the Cubs’ AAA minor league affiliate has been in Des Moines for nearly 40 years.
But a closer look reveals a more contemporary connection between the Hawkeye State and the Grand Canyon State has emerged – one that the other 48 states would be wise to emulate.
Last month, Iowa became the first state to approve a best interest annuity rule that closely follows the National Association of Insurance Commissioners (NAIC) Suitability in Annuity Transactions Model Regulation.
Last week, Arizona Governor Doug Ducey signed a bill into law regarding annuity sales that also mirrors the NAIC model.
Arizona and Iowa have become leaders and trendsetters as it relates to states providing protection for consumers purchasing annuities.
With these initiatives, retirement savers can feel confident that financial professionals are acting in the best interest of consumers. Iowa and Arizona’s actions also closely align with Security and Exchange Commission’s Regulation Best Interest, which goes into effect on June 30. Iowa and Arizona consumers’ interests will be protected at the state and federal levels.
Hopefully, more states will soon follow their lead. About 10 other states are considering approving similar regulations this year.
This is good public policy.
June is Annuity Awareness Month, a time to focus Americans on the only financial product in the marketplace that offers guaranteed income for life. During the market volatility spawned by COVID-19, the importance of stable, guaranteed income from annuities has been reaffirmed. The uncertainties of the COVID-19 economy and its impact on vulnerable communities highlight the growing societal need for financial protection.
Other states should adopt the NAIC model as soon as possible, so that all consumers, regardless of where they live, will benefit from a national best interest standard of care.