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3 Ideas From State Regulators' New Retirement Security Team

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State insurance regulators have set up a panel with a lofty goal: improving Americans’ access to a comfortable retirement.

The National Association of Insurance Commissioners’ new Retirement Securities Working Group is starting by developing a work plan.

The initial version could please financial professionals who work with life insurance, annuities and related products.

“Insurance is a key part of a comprehensive retirement plan,” the working group declares in an initial draft version of the work plan. “Personal financial security involves not only robust pension and retirement savings plans, but also annuities and life, health, disability, and long-term care insurance coverage. Because insurance plays an important role, state insurance departments should play a major part in helping put Americans on a path toward secure retirement.”


  • The Retirement Security Working Group’s section of the NAIC website is available here.
  • The Council for Economic Education’s 2018 state survey results are available here.
  • An earlier article about the working group’s work plan is available here.

Members of working group met recently, through the NAIC’s teleconferencing system, to talk about the work plan.

Some of the comments dealt with the broad, lofty language in the draft work plan. Several commenters, for example, politely rolled their eyes at the idea that the country needs another financial education curriculum, or another report on why Americans are bad savers.

But several commenters included specific retirement security improvement ideas of their own in  their comments.

Here are three ideas that emerged in written comments and presentations prepared for the working group’s conference call meeting.

1. Test the students who take the state-mandated financial literacy classes.

Brenda Cude and Karroll Kitt gave the other working group members a review of state public school financial literacy education requirements.

The NAIC has put both Cude and Kitt on its list of people who are supposed to speak for consumers in NAIC proceedings. Cude is on the faculty at the University of Georgia, and Kitt is affiliated with the University of Texas.

Cude and Kitt pointed out that the Council on Economic Education found in 2016 that 45 states include personal finance in their education standards, and that 19 states require students to take personal finance courses.

But only seven of states actually required that students take financial literacy tests after completing the personal finance courses.

2. Require issuers of annuities and other insured retirement products to provide a statistic that’s equivalent to a life insurance or health insurance loss ratio.

For health insurance products, the loss ratio usually reflects the ratio of benefits paid out to premium amounts paid in.

The Center for Economic Justice and the Center for Insurance Research suggest in a comment that creating some kind of loss ratio statistic for income planning products could help consumers compare products and understand the value the of incoming planning options.

“When a consumer buys, say, an indexed life insurance policy, that policy provides important insurance protections, but the cost of those protections is not currently available to the consumer,” the groups say.

The groups called for adding the following goal to the work plan: “Develop methods and metrics to assess the cost and benefits of life insurance, annuity and long-term care insurance products.”

3. Create a consolidated value disclosure document.

Kim O’Brien of Fixed Annuity Choice, a group created by the participants in the annuity community, also calls for the working group to develop a new type of tool.

“We’d like to suggest the group look at a consolidated and coordinated disclosure that crosses product lines, to help [consumers] delineate and understand the impact and efficacy of life insurance, annuities and long-term care,” O’Brien writes.

— Read NAIC Creates a Retirement Security Working Groupon ThinkAdvisor.

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