Tennessee turned the thirty first state to undertake a rule requiring greatest curiosity requirements for annuity gross sales and suggestions, in keeping with the American Council of Life Insurers.
The rule adopted by the Tennessee Division of Commerce and Insurance coverage is the most recent state regulation or legislation patterned after the Nationwide Affiliation of Insurance coverage Commissioners’ (NAIC) mannequin, which was finalized in 2020.
The NAIC mannequin, “Suitability in Annuity Transactions Mannequin Regulation,” was designed to provide states a template to comply with to align regulation of annuity gross sales and suggestions on the state stage with that of securities on the federal stage by the Securities and Alternate Fee’s Regulation Greatest Curiosity rule.
Like that rule, the NAIC mannequin states that brokers can’t put their very own monetary pursuits forward of shoppers, and units out various obligations they need to meet that mirrored the SEC’s work. Nonetheless, like Reg BI, the NAIC mannequin stopped wanting mandating a fiduciary commonplace.
Shortly after the NAIC finalized its mannequin, Iowa turned the primary state to go its personal rule. In June of final yr, Hawaii turned the twenty seventh state to signal its personal rule or legislation based mostly on the NAIC’S template, adopted by Colorado, Massachusetts and Alaska later within the yr.
Georgia and Wyoming are additionally nearing passage of greatest curiosity annuity regulation, in keeping with the Insured Retirement Institute. Sarah Wooden, the group’s director for State Coverage and Regulatory Affairs, mentioned greater than 40 states may signal on by the top of the yr. Along with Georgia and Wyoming, Illinois, Nevada, Utah, West Virginia, Oregon and Washington all had energetic proposals to undertake the NAIC’s mannequin rule, in keeping with Wooden.