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Connecticut Insurance Department Adopts Best-Interest Annuity Rule

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What You Need to Know

  • Connecticut is the 16th state to adopt to the NAIC rule
  • Maine became the 15th state to move to the NAIC’s model.
  • The rule closely aligns with the Securities Exchange Commission’s Regulation Best Interest.

The Connecticut Insurance Department adopted Tuesday the National Association of Insurance Commissioners’ best-interest annuity rule that closely aligns with the Securities Exchange Commission’s Regulation Best Interest.

Connecticut is the 16th state to adopt the NAIC rule.

The new rule, adopted by Insurance Commissioner Andrew Mais and the Connecticut Insurance Department, “represents a huge victory for consumers in the Nutmeg State,” the American Council of Life Insurers President and CEO Susan Neely and National Association of Insurance and Financial Advisors (NAIFA) Connecticut President Sofia Dumansky said in a joint statement.

The rule ”incorporates the enhanced consumer protections” in NAIC updated model regulation on annuity transactions, Neely and Dumansky said.

In early June, Maine became the 15th state to move to the NAIC’s model, when the Maine Bureau of Insurance adopted a regulation based on the model update. The list of other states that have signed on, by adopting regulations or passing laws, includes Montana, Texas, Alabama and Virginia, according to ACLI.

The New York best-interest standard for annuity sales was struck down in late April by the Appellate Division of the New York State Supreme Court for being “unconstitutionally vague.”

(Pictured: Hartford, Connecticut, skyline. Photo: Shutterstock)