With all the turbulence and strife in recent months, we sure could use some soothing news.
Cue up the Securities and Exchange Commission and its Regulation Best Interest (Reg BI).
Reg BI takes effect tomorrow. Together with the National Association of Insurance Commissioners’ (NAIC) revised Suitability in Annuity Transactions Model Regulation, Reg BI will ensure financial professionals act in the consumer’s best interest when providing guidance and information about annuities.
The assurances that Reg BI and the NAIC model will provide are especially valuable now.
Many Americans have long been concerned about their retirement security. Their concerns have been accentuated by the economic disruption and market volatility unleashed by COVID-19.
Life insurers offer products that can ease those concerns and allow people to secure financial peace of mind in retirement. Life insurers offer annuities, the only product that provides guaranteed income for life.
Both Reg BI and the NAIC model require that financial professionals act in the consumer’s best interest, provide enhanced disclosures, and address conflicts of interest.
Life insurers strongly support these complementary federal and state efforts. Unlike the Labor Department’s fiduciary only rule that would have shut down access to information for the average saver, these efforts preserve small- and moderate-savers access to valuable services and provides them with information, in plain English, to help them make informed decisions.
Iowa and Arizona have already adopted best interest rules consistent with the NAIC model. Several other states are expected to joint them this year. These robust protections will help Americans feel comfortable when considering the guaranteed lifetime income options that annuities provide.
The U.S. Congress reaffirmed the importance of annuities last year when it passed the SECURE Act, which makes it easier for employers to include annuities in retirement plans.
With the SECURE Act, more Americans should be able to obtain the financial security that comes from guaranteed lifetime income. And with Reg BI and the NAIC model, they can trust the guidance they receive from their financial professional.
There is no better time for this soothing peace of mind.
Susan K. Neely was President and CEO of the American Council of Life Insurers (ACLI), the nation’s leading trade association determined to help families live better lives by achieving financial security and certainty. As president and CEO, Neely drove public policy and advocacy on behalf of ACLI’s member companies that represent 93 percent of industry assets and serve 90 million families. She is CEO Emeritus through December, 2024.
