We are much stronger together and the results show it

When 4 in 5 Americans tell a Wall Street Journal pollster they believe the state of the economy is “not so good” or “poor,” an overwhelming share of Americans aren’t confident their children’s lives will be better than their own. And when we see bank failures, such as what happened with Silicon Valley Bank, it’s easy to let pessimism set in.

But at Finseca, our mission is right there in our name: FINancial SECurity for All. And that’s why we will continue to draw attention to New York state’s Regulation 187, which — as the data show — has been problematic for consumers looking for access and more choices. It is because of what has happened in the Empire State that Finseca has been actively engaged with lawmakers in any state that is considering a similar proposal.

For example, when California State Sen. Bill Dodd, with the backing of the California Department of Insurance, introduced SB 263, which included a standard far more onerous than New York’s, we activated immediately.

Our coalition, led by the Association of California Life & Health Insurance Carriers — with the help of Finseca, the American Council of Life Insurers, the National Association of Insurance and Financial Advisors, the Insured Retirement Institute, the National Association for Fixed Annuities, Federation of Americans for Consumer Choice, and Independent Insurance Agents and Brokers of America — joined together to oppose the introduced legislation. We began our efforts by telling the story of the very troubling impact of NY 187.

Since its inception, NY 187 (according to data shared by Life Annuity Specialist) has led to a decline in the number of people covered by individual life insurance. Specifically, in 2021, new policy count in New York stood at 362,207, down 15% from the total in 2018, the year before the rule took effect. But over the same period, the policy count nationally increased by 3%.
In addition to this, from 2019 to 2021, life insurance premiums from individuals climbed 11.5% across the United States, but only 3.6% in New York, based on data from S&P Capital IQ Pro. Meanwhile, over the same period, retail annuity premiums rose 8.9% nationwide but dropped 4.2% in New York.

Data from MIB, a life insurance industry leader in data collection and risk assessment, showed a 13% decrease in the number of new life insurance applications from 2018 to 2022 in the state of New York. In 2021 alone, New York saw a 3.16% decline in new life insurance applications from the prior year. In comparison, Connecticut saw a 5.87% increase in life insurance applications and a 3.39% increase on the national level, during that same time frame.

Consumers and clients need help

In addition to this, we’ve also heard about how burdensome it is for advisors to serve their clients.

When we share these reports and couple them with the stories about the work holistic financial security professionals do each and every day for countless individuals and families all over this country, it has resonance.

Candidly, our work seems to be one of the few things today that can transcend partisanship. This work isn’t about left or right; it’s about up or down. We can help everyone get a leg up by ensuring they have more financial security, not less.

I want to commend Sen. Dodd, his team, and all the legislators in California working to bring attention to the issue of financial security. We certainly appreciated the constructive dialogue we’ve had in order to make sure we get this right. Expanding access and choice is so important at this juncture. Achieving financial security for all is only possible if we’re all working toward this goal together.

Though there is still some work to be done, I’m pleased to report that we’ve made significant progress toward this end. We’ve taken the initial California proposal and more closely aligned it with the NAIC Best Interest for Annuities standard, which has already been adopted in 39 states.

It’s our hope that California will be number 40 in the coming months.

Remember, there are 60 million American households that have no or not enough life insurance. That means millions don’t have the benefit of the protection of a true financial security plan. Couple this with the roughly $12 trillion dollar protection gap, and our work should be squarely focused on ensuring consumers have more access and more choice instead of less.

Melissa Bova joined the Finseca government affairs team in November 2021 as its first vice president of state affairs. She may be contacted at [email protected].