Insured Retirement Institute: States Continue to Adopt NAIC Best Interest Model Regulation

WASHINGTON, Nov. 3 (TNSOps) -- The Insured Retirement Institute issued the following news release:

Nearly half of all states are likely to adopt a model regulation this year to require financial advice professionals to act in the best interest of their clients, according to the Insured Retirement Institute (IRI).

Speaking at the National Conference of State Legislatures this week, Sarah Wood, IRI Director, State Policy & Regulatory Affairs, said that 16 states had adopted the revised National Association of Insurance Commissioners (NAIC) Suitability in Annuity Transactions Model Regulation. Another eight states are actively considering adoption, and additional states are expected to consider the model.

"IRI and our members are encouraged by the progress we have seen in states to adopt this important consumer protection model regulation," Wood said.

She noted that the NAIC model is consistent with the heightened standards of conduct imposed by the U.S. Securities and Exchange Commission's Regulation Best Interest (Reg BI).

"Both Reg BI and the NAIC model were developed to deliver strong, consistent regulation to protect consumers and preserve their choice of financial advice and products that meet their financial and retirement planning needs," Wood added.

The 16 states that have adopted the model regulation are Alabama, Arizona, Arkansas, Connecticut, Delaware, Idaho, Iowa, Maine, Michigan, Montana, Nebraska, North Dakota, Ohio, Rhode Island, Texas, and Virginia. Eight other states - Kentucky, Maryland, Mississippi, New Mexico, Nevada, Pennsylvania, South Carolina, and Wisconsin - are actively considering the regulation.

Wood said that since the NAIC adopted the model in early 2020, IRI and an industry coalition had worked closely with state legislators, regulators, and the NAIC to address implementation concerns. She said that a frequently-asked-questions document issued by the NAIC with industry input has helped provide guidance regarding the interpretation of financial professional training obligations.

Industry groups also have worked with states to ensure that sufficient implementation lead time within the regulation is included and is consistent with the model.

"The implementation process has been marked by cooperation and discussion between regulators and the industry," Wood said. "We want to continue this dialogue with the remaining states to quickly and efficiently enact this regulation in all states by next year. Consumers deserve the enhanced protection that the regulation will deliver."