Adoption of Model Regulation Will Protect Consumers, Preserve Choice of Investment Advice
WASHINGTON, D.C. – Georgia and Wyoming are poised to adopt a model investor protection regulation that the Insured Retirement Institute (IRI) calls an important enhancement to the standard that applies when producers recommend annuities to their clients.
If adopted by Georgia and Wyoming, it will bring the number of states to adopt the model regulation to 31. Similar proposals are currently pending in Illinois, Massachusetts, Nevada, Tennessee, Utah, and West Virginia.
In letters to Georgia and Wyoming regulators, IRI said that the proposed amendments are well-aligned with the enhanced Suitability in Annuity Transactions Model Regulation approved by the National Association of Insurance Commissioners (NAIC) in early 2020.
“As you know, the revised 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), which went into effect as of June 30, 2020. Similar to Reg BI, the revised model requires insurance producers to act in the best interest of the consumer under the circumstances known at the time a recommendation is made, without placing the producer’s or the insurer’s financial interest ahead of the consumer’s interest,” wrote Sarah Wood, Director, State Affairs.
While supporting each state’s approach, IRI recommended that regulators allow sufficient time for insurers and producers to come into compliance with the amendments and to ensure that financial advisors and insurance agents can receive required training before the regulation takes effect.
“Strong, consistent regulation is important to protect consumers and to preserve consumers’ choice of financial advice and products that meet their financial and retirement planning needs,” Wood said. “We look forward to working with Georgia and Wyoming regulators to implement these important consumer protection regulations.”
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Contact: Dan Zielinski
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