Ohio residents are about to receive a wonderful Valentine’s Day present, one that will last much longer than a box of chocolates.
The Ohio Department of Insurance adopted a rule that enhances the standards financial professionals must follow while ensuring that individual savers maintain access to, and information about, annuities. The rule becomes effective on Feb. 14. It is a significant victory for consumer protection and for all Ohio citizens planning for retirement.
The rule enacts the National Association of Insurance Commissioners’ (NAIC) updated model regulation on annuity transactions.
Ohio is now the seventh state with a new law or rule that incorporates the NAIC model’s additional protections, following Arizona, Arkansas, Delaware, Iowa, Michigan and Rhode Island. Several other states are considering similar actions to protect their residents.
These state actions also closely align with the Securities and Exchange Commission’s Regulation Best Interest, which took effect last year.
With these enhanced consumer protections, people can rest assured that financial professionals must act in the consumer’s best interest when offering recommendations about retirement savings products, including annuities. These standards protect consumers while also ensuring that middle- and working-class families will continue to have access to sensible and understandable financial information.
Ready access to financial information is especially vital these days. After the economic turmoil sparked by the COVID-19 pandemic, concerns about retirement security have intensified for many Americans. Their worries can be eased through financial security tools, including annuities, the only financial product in the marketplace that allows savers to create a personal pension with income they can’t outlive.
American consumers obtain helpful information and education about annuities from financial professionals. All consumers need to be able to access the benefits that come from guaranteed lifetime income. And they deserve to be confident that financial professionals must act in the consumer’s best interest when recommending annuity products.
Ohio’s adoption of the NAIC model provides that essential assurance to Buckeye State residents.
More states should follow the lead of Ohio with this consumer protection. Then, more consumers will benefit from a best interest standard of care, regardless of where they live.
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).
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Duane Borcherding is the president of NAIFA-OH. He is a financial adviser and offers a variety of products, including, but not limited to, college funding, retirement, managing costs for extended periods of care and lifetime income strategies.
