Posted on July 31, 2019

WASHINGTON, D.C. – The Insured Retirement Institute (IRI) expects to see additional positive progress on a key regulatory issue affecting annuities during the National Association of Insurance Commissioners (NAIC) summer meeting in New York City this week.

Ongoing work to update the NAIC Suitability in Annuity Transactions Model law is a critical effort to help ensure consistent and compatible standard of conduct regulations for financial professionals.

“The NAIC has been hard at work on updates to their model law that will meaningfully raise the bar for insurance producers in a way that aligns, where appropriate, with the Securities and Exchange Commission’s Regulation Best Interest,” said Jason Berkowitz, IRI chief legal and regulatory affairs officer. “We hope to see continued progress on this effort during the NAIC’s summer meeting and to see it approved later this year.”

Berkowitz added that Reg BI combined with an amended NAIC model regulation will ensure that an enhanced consumer protection standard will cover all insurance and investment products.

IRI also is continuing to monitor NAIC efforts to amend the rules for indexed annuity illustrations in the NAIC Annuity Disclosure Model Regulation. While the working group charged with developing possible revisions is not scheduled to meet in New York, the Life Insurance and Annuities (A) Committee will receive a status report and consider whether to authorize the working group to continue its efforts.

“Illustrations are an important part of the education process for many consumers who are considering whether an annuity is right for them, so it is crucial that the model regulation strike the right balance,” Berkowitz said. “If the NAIC continues to explore changes to these rules, IRI will remain actively engaged in the effort.”

IRI also is scheduled to present an overview of its annual Baby Boomer retirement report issued earlier this year. IRI was invited to make the presentation before the Life Insurance and Annuities (A) Committee to set the stage for the critical need to promote retirement security. The NAIC has a retirement security initiative – supported by IRI – to help educate consumers on the importance of sound, financial planning for retirement.

“IRI research shows that too few Americans are saving for retirement,” Berkowitz said. “Forty-five percent of Baby Boomers have zero saved for retirement. Our industry, in partnership with the NAIC and others, must continue to educate Americans about the importance of establishing a financially sound retirement plan. This needs to incorporate both the accumulation of sufficient savings and the use of those resources to generate lifetime monthly income.”

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