American Council of Life Insurers: New Rule in Louisiana Strengthens Protections for Annuity Consumers

WASHINGTON, May 21 -- The American Council of Life Insurers issued the following joint statement on May 20, 2024 with National Association of Insurance and Financial Advisors:

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American Council of Life Insurers (ACLI) President and CEO Susan Neely and National Association of Insurance and Financial Advisors (NAIFA)--Louisiana Chapter President Blake Gillies issued the following joint statement on the best interest annuity rule adopted recently by the Louisiana Department of Insurance:

"The Louisiana Department of Insurance, led by Commissioner Tim Temple, has significantly enhanced protections for Pelican State consumers seeking lifetime income through annuities. The new rule includes heightened standards that financial professionals must follow and protects consumers' access to information about annuities, the only financial product in the marketplace that can provide guaranteed income for life.

"Louisiana is the latest example of how states are taking the lead on a nationwide effort to protect retirement savers. To date, 46 states have adopted the 'best interest of consumer enhancements' in the National Association of Insurance Commissioners (NAIC) Suitability in Annuity Transactions Model Regulation. Over 90% of Americans now live in a state that has adopted a best interest standard for annuity sales. These bipartisan laws and regulations also align with the SEC's Regulation Best Interest, providing consumers with robust safeguards at the state and federal level.

"The state-based protections stand in stark contrast to the ill-advised fiduciary-only approach rolled out recently by the U.S. Department of Labor. The regulation is a repackaging of a failed 2016 regulation that, before it was struck down by a federal court, resulted in more than 10 million American workers' accounts, with $900 billion in savings, losing access to professional financial guidance. With more than 4.1 million Americans turning 65 each year through 2027, public agencies should be working to expand and not limit people's options for retirement.

"The best interest standard adopted in Louisiana and other states ensures that retirement savers, particularly financially vulnerable middle-income Americans, can access information about different choices for long-term security in retirement. A consumer survey finds that middle-income retirement savers would be very concerned about a regulation keeping them from accessing the professional financial guidance they want and need.

"The U.S. Congress reaffirmed the importance of lifetime income when it passed legislation in 2019 and 2022 that made it easier for employers to include annuities in workplace retirement plans. With these enhanced state and federal consumer protections, millions of savers across the country can be confident that financial professionals must act in the consumer's best interest when offering recommendations about annuities.

"We look forward to the remaining states implementing these sensible protections so that consumers everywhere can benefit from a best interest standard."

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About ACLI: 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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About NAIFA: Founded in 1890 as The National Association of Life Underwriters, NAIFA is the oldest, largest, and most prestigious association representing the interests of financial professionals from every Congressional district in the United States. Our mission - empowering financial professionals and consumers with world-class advocacy and education - is the reason NAIFA has consistently and resoundingly stood up for agents and called upon members to grow their knowledge while following the highest ethical standards in the industry.

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Original text here: https://www.acli.com/posting/nr24-050