What comes to mind when you think of Washington, the only state named after a U.S. president?
Olympic National Park, Puget Sound and Mount Rainier? Starbucks, Amazon and Microsoft? Nirvana, Pearl Jam and Jimi Hendrix? Or the Mariners, Seahawks and Kraken?
Seems like there’s something for everyone in Washington. And that’s not even counting its latest attraction, which will appeal to every saver in the Evergreen State.
Governor Jay Inslee recently signed into law a bill sponsored by Representative Kristine Reeves that strengthens protections for Washington consumers seeking lifetime income through annuities. The law 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 a huge victory for everyone from Anacortes to John’s hometown of Walla Walla.
Washington joins a growing list of states to adopt similar laws or rules. Residents in more than 2/3rds of the United States now benefit from a best interest standard of care. Building on this momentum, several more states are considering similar measures to protect their citizens.
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 restrict access to financial inclusion for 10 million American households. Another survey found 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 in Washington and 35 other states can be assured that financial professionals must act in the consumer’s best interest when offering recommendations about annuities. These 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.
More states should join Washington and adopt this practical consumer protection to help protect their residents’ financial future.
John Mangan is Vice President & Deputy, State Relations at the American Council of Life Insurers (ACLI). He is responsible for state legislative and regulatory affairs in California, Idaho, Nevada, Oregon and Washington. He also leads the ACLI’s state advocacy team on the issues of state-run retirement plans and independent contractor proposals.
Karl Kuntz, President of NAIFA-WA, resides in Buckley, Washington.
