North Dakota is one of the states moving toward adopting the National Association of Insurance Commissioners’ annuity sales standards model update.
The update includes a “best interest” standard that’s meant to be compatible with the U.S. Securities and Exchange Commission’s Regulation Best Interest. The provision requires annuity sellers to act in consumers’ best interest.
Iowa, Arizona, Arkansas, Michigan and Rhode Island have already adopted the NAIC model update, according to the American Council of Life Insurers (ACLI).
Members of the North Dakota House Industry, Business and Labor Committee voted 13-0 Tuesday to approve House Bill 1160, which would add the NAIC best interest standard language to North Dakota’s insurance laws.
- A video recording of the North Dakota House Industry, Business and Labor meeting
- Here Are the States With Best-Interest Rules for Annuities
Committee members reviewed House Bill 1160 at an in-person meeting in Bismarck that was streamed live on the web.
Only about two of the 13 state officials visible in the video were wearing masks. Most of the witnesses who talked to the committee members about the bill testified through a web conferencing system or wore masks.
Jon Godfread, the North Dakota insurance commissioner — who may be the world’s tallest elected official — testified in support of the bill.
The other witnesses who talked about House Bill 1160 all spoke on behalf of insurance companies or groups, such as the ACLI, the Insured Retirement Institute, the Independent Insurance Agents and Brokers of America (IIABA), and State Farm. No individual consumers or representatives from consumer groups testified.
Wesley Bissett, a representative for IIABA, asked lawmakers to adopt an IIABA amendment that would eliminate the term “best interest” from the text. Bissett said the term is too vague and could eventually lead to lawsuits against agents.
“Agents don’t oppose tough oversight,” Bissett said. “We simply want to know what the rules of the road are.”