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New Mexico becomes 20th state to pass best interest annuity rule

New Mexico has become the 20th state to pass a “best interest” rule relating to annuity sales and recommendations based on the National Association of Insurance Commissioners (NAIC) model rule, which was originally finalized in 2020.

The state insurance superintendent’s office adopted the best interest annuity rule in February. 24, according to final rule posted on the website of the office. The new rule is of Pennsylvania Passing of a Uniform Rule which was signed by the Govt. Tom Wolf in late December. NAIC passed its model rule in February 2020This pledge by backers would help states align annuity sale rules with the Securities and Exchange Commission’s regulated best interest rule.

American Council of Life Insurers (ACLI) President and CEO Susan Neely and the National Association of Insurance and Financial Advisors’ Vice President of Advocacy Kenneth Bottari issued a statement in support of the rule. Neely and Botari compared best interest rules with fiduciary standards on sales and recommendations.

“As opposed to a fiduciary-only approach, these measures ensure that all savers, especially economically weaker middle-income Americans, have access to a variety of options for long-term security during retirement, ” They said.

In addition to New Mexico, 19 other states have passed regulation or legislation based on the NAIC’s model, including Iowa, Connecticut, ohio, Virginia And Kentucky, According to Susan Wood, director of state policy and regulatory affairs for the Insured Retirement Institute, proposals for similar rules are pending in seven states, including Nevada, Maryland, South Carolina, Wisconsin, Hawaii, South Dakota and North Carolina.

Wood predicted that Wisconsin’s ruling could be finalized by the end of the state’s legislative calendar in May, and estimated that 35 states could finalize their versions of the rule by the end of the year. Hawaii, South Dakota and North Carolina all issued proposals last month, according to Wood, adding that IRI was “pleased with the progress” so far in 2022.

“It is encouraging to see the three states put forward new proposals, especially within the first month of the year,” she said. In a recent interview.

The New Mexico regulation takes effect October 1.

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