There’s No Debate
Eagles or Steelers? Penn State or University of Pittsburgh? Pat’s King of Steaks or Geno’s Steaks?
Pennsylvanians are always debating something. But thanks to recent action by Governor Tom Wolf, now there’s something everyone in the Keystone State can agree on.
Governor Wolf recently signed a law that 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 lifetime income. This is a huge victory for Pennsylvania savers.
Pennsylvania became the 19th state to adopt similar laws or rules. Building on this momentum, several other 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, which took effect last year. 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 new study, a fiduciary-only approach would shut down access to financial inclusion for 10 million households.
With these enhanced state and federal consumer protections, savers can rest assured that financial professionals must act in the consumer’s best interest when offering recommendations about annuities. The U.S. Congress reaffirmed 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 easy-to-understand financial information.
There’s no debate – more states should join Pennsylvania and adopt this practical consumer protection. Then more consumers throughout America looking to protect their family’s financial future would benefit from a best interest standard of care, no matter where they reside.
(Sam Marshall is CEO of the Insurance Federation of Pennsylvania.)
(Carina Hatfield, President of NAIFA-PA, is from Pottstown, Pennsylvania.)