Life, Retirement Industry Officials Wary of 'Patchwork' Annuity Sales Standards

Top representatives of the life insurance and retirement industries talked Wednesday, during a panel discussion in Washington, about the possibility that states could create a patchwork quilt of annuity sales standards.

The American Council of Life Insurers is actively engaged with the Securities and Exchange Commission and the National Association of Insurance Commissioners on the conflicts of interest and the best interest of the consumer rulemakings, according to Susan Neely, the ACLI’s president.

The SEC began work on its advice-standards package, which includes the proposed Regulation Best Interest, after a court vacated the U.S. Department of Labor’s fiduciary rule.

Neely said here are some states, such as Maryland, that are trying to set their own sales standards before the SEC completes work on its project.

“Fiduciary is not over,” Neely said. “There are people who want to advance it.”

(Related: Nevada Oversteps Its Authority on Fiduciary Reg: Trade Groups)

The Maryland bill has about eight different protections in it, Neely said.

“Other states are waiting in the wings to see what happens,” she said.

“If five big states adopt an approach, you are ultimately going have to embrace that approach,” Neely said. She said that outcome could create a much more complicated playing field that could hamper access to retirement security products.

Neely said state efforts could produce unintended effects. She said a former agent told her that, if his customer was a person who worked at a car dealership, under the Labor Department’s fiduciary standard, he would not be able to get advice. The owner of the car dealership would, though, the agent told her.