Legislation signed recently by Pennsylvania Governor Tom Wolf enhances protections for consumers seeking lifetime income from annuities. Pennsylvania is the 19th state to adopt a measure that implements the "best interest of consumer enhancements" in the National Association of Insurance Commissioners (NAIC) Suitability in Annuity Transactions Model Regulation. The new laws and regulations also align with the SEC's Regulation Best Interest.
"Governor Wolf and Pennsylvania's elected leaders have advanced important protections that enhance 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," said Insurance Federation of Pennsylvania CEO Sam Marshall. "This is a huge victory for Pennsylvania savers."
"Unlike a fiduciary-only approach that limits choices for consumers, the bill signed into law offers strong protections while making sure savers, particularly financially vulnerable middle-income Americans, can access information about options for long-term security throughout retirement," said National Association of Insurance and Financial Advisors Pennsylvania President Carina Hatfield. "According to a new study, a fiduciary-only approach would limit choices for consumers, reduce savings of nearly 3 million people by $140 billion and widen the racial wealth gap by 20%."
"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," said American Council of Life Insurers President and CEO Susan Neely. "The new law in Pennsylvania adds momentum to the nationwide push for protections that safeguard consumers while also ensuring that middle- and working-class families retain access to annuities. We hope other states will join Pennsylvania and adopt this practical consumer protection so more consumers looking to protect their family's financial future can benefit from a best interest standard of care, no matter where they reside."