Nevada has officially joined 47 other states in adopting a best interest standard for annuity transactions, further strengthening consumer protections for retirement savers.
The rule, approved by the Legislative Review Committee in Nevada and supported by the state's division of insurance, follows the National Association of Insurance Commissioners’ Suitability in Annuity Transactions Model Regulation.
Under the newly adopted measure, financial professionals in Nevada must prioritize the needs of consumers when recommending annuities, a product known for their ability to provide lifetime income in retirement.
The latest step adds to a yearslong trend of convergence across the industry by aligning the state’s standards with similar measures across the country, as well as the federal-level Regulation Best Interest standard by the SEC.
In a joint statement published Tuesday, David Chavern, president and CEO of the American Council of Life Insurers, and Jarod Morgan, chair of the National Association of Insurance and Financial Advisors—Nevada Political Action Committee, praised the move.
“Nevada becomes the 48th state to adopt the ‘best interest of consumer enhancements’ in the National Association of Insurance Commissioners Suitability in Annuity Transactions Model Regulation," the statement read. "More than 95 percent of the U.S. population live in a state with a best interest standard for annuity sales.”
The ACLI and NAIFA statement painted the regulation as a balanced solution to safeguard consumers without limiting their access to financial advice, a critical need as millions of Americans reach retirement age annually.
“These measures ensure that retirement savers, particularly financially vulnerable middle-income Americans, can access information about different choices for long-term security in retirement,” Chavern and Morgan said.
The latest development in the long-running story of the NAIC annuity model rule came just as the national association concluded its fall meeting in Denver, Colorado, where members officially elected their next officers. Along with the rest of the newly confirmed leaders, North Dakota Insurance Commissioner Jon Godfread will be taking up his role as president on January 1.
Nevada’s decision to institute the best interest annuity model, which follows similar moves in Louisiana, Indiana, and California earlier this year.
New Jersey and Washington, DC have not adopted the NAIC model, while New York has its own best interest rule for annuities that differs from the NAIC model.
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