Home Wealth Management Massachusetts Adopts Finest Curiosity Annuity Rule

Massachusetts Adopts Finest Curiosity Annuity Rule

Massachusetts Adopts Finest Curiosity Annuity Rule


Massachusetts has adopted laws enacting a “finest curiosity” customary on annuity gross sales and suggestions, based on the American Council of Life Insurers.

In doing so, the Bay State turned the thirtieth state to finalize a rule or legislation based mostly on the Nationwide Affiliation of Insurance coverage Commissioners’ mannequin for annuity gross sales and suggestions that was initially finalized in 2020. Massachusetts follows Alaska, which adopted its personal rule in October.

“In contrast to a fiduciary-only strategy, these measures be certain that all savers, notably financially susceptible middle-income People, can entry details about completely different selections for long-term safety in retirement,” mentioned ACLI President and CEO Susan Neely and Nationwide Affiliation of Insurance coverage and Monetary Advisors (NAIFA)-Massachusetts President Josh O’Gara, in an announcement. “We hope different states add to this nationwide effort and undertake these smart protections. Shoppers working to safe their household’s monetary future ought to profit from a finest curiosity customary of care regardless of the place they reside.”

The NAIC’s 2020 mannequin, entitled “Suitability in Annuity Transactions Mannequin Regulation,” supplied states a template to manage annuity gross sales and suggestions in a approach that will align with the Securities and Trade Fee’s Regulation Finest Curiosity, which governs gross sales and suggestions of securities on the federal degree. 

Just like the SEC’s rule, the NAIC’s mannequin stipulates that brokers can not put their very own monetary pursuits forward of the buyer’s, and the mannequin mandated insurers and brokers meet a care, disclosure, battle of curiosity and documentation obligation, akin to the SEC’s regulation.

Iowa turned the primary state to cross its personal rule based mostly on the NAIC’s mannequin in 2020, with greater than two dozen states following in its footsteps. Lately, along with Alaska, Hawaii signed laws modeled on the NAIC customary in June, and Colorado Insurance coverage Commissioner Michael Conway adopted the same rule in August.





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