The best-interest model of annuity transactions promoted by the National Institute of Insurance Commissioners has gained additional support in Indiana. The Indiana Department of Insurance is adopting a new rule offering stronger protections for consumers looking to get lifetime income through annuities.
Under the rule announced by Amy Beard, commissioner of the Department of Insurance, Indiana has officially become the 45th state to align with the "best interest of consumer enhancements" outlined in the NAIC Suitability in Annuity Transactions Model Regulation.
The move in Indiana comes shortly after California Gov. Gavin Newsom endorsed the NAIC annuity sales model update in his own state by signing Senate Bill 263.
The Hoosier State’s newly adopted rule, which will take effect on July 1, mirrors the SEC’s Regulation Best Interest standard, marking a stride toward unified state and federal consumer safeguards.
In a joint statement, the National Association of Insurance and Financial Advisors and the American Council of Life Insurers hailed the move as a step forward, as it means more than 90% of U.S. annuity consumers are now protected with a best interest standard.
“With these enhanced state and federal consumer protections, millions of savers in Indiana and across the country can be confident that financial professionals must act in the consumer’s best interest when offering recommendations about annuities," said Susan Neely, president and CEO of ACLI.
“The new rule is a much more sensible approach to safeguarding consumers than the ill-advised fiduciary-only regulatory package proposed by the U.S. Department of Labor,” said Trent Hahn, executive director and legislative counsel at the Association of Indiana Life Insurance Cos.
Hahn pointed to the fallout from similar DOL regulation adopted in 2016, which effectively saw more than 10 million American workers losing access to professional financial guidance, according to Deloitte.
“Indiana’s new rule is in line with the real-world needs of retirement savers,” said Daniel Stallings, past president of NAIFA Indiana. “Research shows that middle-income retirement savers would be very concerned about a regulation keeping them from accessing the professional financial guidance they want and need.”
“We believe that the remaining states will adopt these sensible protections soon, ensuring all consumers can benefit for a best interest standard regardless of where they call home,” Neely said.
A score is generated to show coverage needs across life insurance, long-term care coverage, retirement income protection, and annuities.
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