ACLI On Request For Company Information On Noncash Compensation

WASHINGTON, May 2 -- The American Council of Life Insurers issued the following statement on May 1, 2024, by President and CEO Susan Neely:

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American Council of Life Insurers (ACLI) President & CEO Susan Neely issued the following statement on Sen. Elizabeth Warren's (D-MA) request for information from life insurance companies on noncash compensation to financial professionals:

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"Attacks on annuities and noncash compensation arrangements ignore protections established since 2020 and the real-world needs of workers and retirees.

"Forty-five states already have adopted enhanced annuity sales standards reflecting the National Association of Insurance Commissioners' (NAIC) model regulation imposing reasonable limits on noncash compensation. These limits directly address the conflict of interest concerns raised by the Labor Department in 2015. And FINRA has in place noncash compensation restrictions for sellers of insurance products with equity components, such as variable annuities. The most valuable type of noncash compensation that many financial professionals receive is health and welfare benefits. Regardless, as the enhanced annuity sales standards require, financial professionals must act in the best interest of their customers.

"The NAIC model, along with the SEC's Regulation Best Interest, tightened rules involving annuity sales while ensuring the product - the only one in the marketplace guaranteeing lifetime income like a traditional pension - remains accessible. In sharp contrast, this year's federal fiduciary regulation may very well result in millions of American retirement savers losing access to the help they need for a financially secure retirement.

"In a post-traditional pension environment, retirement savers are seeking options for guaranteed lifetime income and financial planning. Last year, four in five workers between age 45 and 65 told Morning Consult they were concerned about having enough savings to last through retirement. Additional research finds retirees can pay a modest premium expense early in retirement to avoid the risk of running out of savings late in retirement.

"Consumers working hard to set aside retirement savings and make it last are not served by misinformation about state and federal restrictions on noncash compensation of financial professionals who offer annuities."

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The American Council of Life Insurers (ACLI) is the leading trade association driving public policy and advocacy on behalf of the life insurance industry. 90 million American families rely on the life insurance industry for financial protection and retirement security. ACLI's member companies are dedicated to protecting consumers' financial wellbeing through life insurance, annuities, retirement plans, long-term care insurance, disability income insurance, reinsurance, and dental, vision and other supplemental benefits. ACLI's 275 member companies represent 93 percent of industry assets in the United States.

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Original text here: https://www.acli.com/posting/nr24-044