“Virginia is for Lovers” has been the tourism and travel slogan for the Old Dominion since 1969.
“Virginia is for Savers” doesn’t quite have the same ring to it. But thanks to recent action by the state’s Department of Insurance, it might just catch on.
The Department, led by Insurance Commissioner Scott White, recently adopted a best interest annuity regulation that provides important benefits for Virginia savers. It 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 offers guaranteed lifetime income.
Virginia is the 14th state with a new law or rule that incorporates the enhanced consumer protections in the National Association of Insurance Commissioners’ (NAIC) updated model regulation on annuity transactions. Several other states are considering similar measures to safeguard their residents.
The activities in the states also closely align with the Securities and Exchange Commission’s Regulation Best Interest, which took effect last year. And, unlike a fiduciary-only approach, these measures ensure that savers, particularly financially vulnerable middle-income Americans, can access information about different choices for long-term financial security through retirement.
With these enhanced state and federal consumer protections, savers can be confident that financial professionals must act in the consumer’s best interest when offering recommendations about annuities. The U.S. Congress reiterated the importance of lifetime income when it passed legislation in 2019 that made it easier for employers to include annuities in workplace retirement plans. These protections safeguard consumers while also ensuring that middle- and working-class families will retain access to understandable financial information.
More states should model Virginia and advance similar consumer protections. Then more people aiming to protect their family’s financial future will benefit from a best interest standard of care, no matter where they live.
(Susan Campbell, NAIFA-VA President, is Brokerage Manager at Disability Insurance Quotes.)
Michelle Carroll Foster is Chief Inclusion Officer at the American Council of Life Insurers (ACLI). She joined ACLI in 2019.
Susan Campbell, NAIFA-VA President, is Brokerage Manager at Disability Insurance Quotes.
