Wisconsin The Latest State To Adopt New Annuity Sales Regs
Targeted News Service (Press Releases)
Legislation signed into law Friday by Wisconsin Governor Tony Evers greatly enhances protections for consumers seeking lifetime income from annuities, the American Council for Life Insurers said in a news release.
The law was proposed by Senator Rob Stafsholt (R-New Richmond) and Representative Kevin Petersen (R-Waupaca). Wisconsin is the 23rd state that as part of a nationwide, bipartisan effort has adopted measures implementing 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.
"The new law unanimously passed by the Wisconsin legislature and signed today by Governor Evers is a victory for Badger State consumers," said Wisconsin Council of Life Insurers Executive Director Connie O'Connell. "It enhances 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."
In February 2020, the NAIC adopted a model law that articulates a best-interest standard through the following four obligations: care, disclosure, conflict of interest and documentation. With the outbreak of COVID-19, states were slow to adopt the model in the months that followed. Activity began to pick up in late 2021 and has continued in 2022.
"Unlike a fiduciary-only approach that limits choices for consumers, the bill signed into law today 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 (NAIFA) Wisconsin Grassroots Chair Laura P DeGolier. "According to a recent 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 (ACLI) President and CEO Susan Neely. "These protections safeguard consumers while also ensuring that middle- and working-class families retain access to annuities. We hope other states will join Wisconsin in adopting this practical consumer protection so more consumers can benefit from a best interest standard of care."