For many Americans, concerns about their retirement security have intensified in 2020 due to the economic disruption and market volatility triggered by COVID-19.
Their concerns can be lessened through financial security products offered by life insurers, including annuities. Annuities are the only financial product in the marketplace that can guarantee lifetime income.
Americans receive valuable information and education about annuities from insurance agents and other financial professionals. Now more than ever, consumers must be certain that these financial professionals are acting in their best interest when recommending annuity products.
Thanks to robust actions by state and federal officials, more and more consumers are gaining that certainty.
Rhode Island this week joined Iowa and Arizona as states with new regulations or laws that protect consumers purchasing annuities. These states are following the lead set by the National Association of Insurance Commissioners (NAIC), which revised its model regulation on annuity transactions earlier this year. The NAIC model enhances the standards for sales professionals while ensuring savers retain access to, and information in plain English about, annuities.
The states’ actions also closely align with the Securities and Exchange Commission’s Regulation Best Interest, which went into effect this year.
With these initiatives, retirement savers can feel confident that financial professionals are acting in their best interest when offering guidance and information about all forms of retirement savings products, including annuities. Importantly, middle- and working-class families will still have access to sound, transparent financial guidance.
National adoption of the NAIC model is crucial now more than ever. As more states follow Rhode Island, Iowa and Arizona and adopt department rules or pass legislation regarding annuity sales that mirror the NAIC model, the better off consumers will be.
Hopefully, more states will soon follow their lead, so that all consumers, regardless of where they live, will benefit from a national best interest standard of care.
Camille Simpson and John Howard
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- Rhode Island Moving to Protect its Citizens’ Financial Security - November 10, 2020