CALIFORNIA BECOMES THE 45TH STATE TO ADOPT NAIC BEST INTEREST REGULATION

90 Percent of U.S. Consumers Now Protected

 WASHINGTON, D.C. – California became the 45th state to adopt a model National Association of Insurance Commissioners (NAIC) best interest regulation that insurance producers must follow when recommending annuity products to their clients.

Governor Gavin Newsom signed S.B. 263 into law, meaning that more than 90 percent of the U.S. population is now covered by this robust consumer protection law. Like the NAIC model, the new California law requires insurance producers to act in clients’ best interest. The NAIC model aligns with the U.S. Securities and Exchange Commission’s Regulation Best Interest (Reg BI).

“California’s adoption of the NAIC model best interest regulation is a major step forward for consumer protection,” said Wayne Chopus, President and CEO of the Insured Retirement Institute (IRI). “More than 90 percent of the U.S. population is now protected by this strong and effective state law, and together with the SEC’s Reg BI, our nation has established a comprehensive federal-state consumer protection framework.”

IRI also noted that the expanded coverage of the NAIC model regulation further diminishes the need for the U.S. Department of Labor’s proposed investment advice regulation.

“We’ve said repeatedly that the proposed DOL investment advice rule was unnecessary and redundant,” Chopus said. “California’s adoption of the NAIC best interest model further diminishes the need for DOL’s flawed, overreaching proposal, and it should be withdrawn.”

Chopus acknowledged and thanked California Sen. Bill Dodd, who sponsored the legislation, and California Insurance Commissioner Ricardo Lara, who supported its passage. He also noted the efforts of the Association of California Life and Health Insurance Companies (ACLHIC) for leading the broad industry coalition that advocated for the law.

“This was a well-coordinated effort by a united industry coalition, led by ACLHIC, that passed a significant consumer protection measure without a single ‘no’ vote in the Legislature,” Chopus said. “We are very grateful to Sen. Dodd for leading the effort in the Legislature and introducing this critically important measure. We also appreciate Commissioner Lara’s support and cooperation, and a special thanks to Gov. Newsom for signing this into law.”

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Contact: Dan Zielinski

 

The Insured Retirement Institute (IRI) is the leading association for the entire supply chain of insured retirement strategies, including life insurers, asset managers, broker-dealers, banks, marketing organizations, law firms, and solution providers. IRI members account for 90 percent of annuity assets in the U.S., include the foremost distributors of protected lifetime income solutions, and are represented by financial professionals serving millions of Americans. IRI champions retirement security for all through leadership in advocacy, awareness, research, and the advancement of digital solutions within a collaborative industry community. Learn more at www.irionline.org.