Investment Professionals

CFA, Others Comment on “Best Interest” Amendments to NAIC Suitability in Annuity Transactions Model Regulation

CFA and other public interest groups have submitted comments to the NAIC Annuity Suitability Working Group as it considers amending the Suitability in Annuity Transactions Model to incorporate a “Best Interest” standard. As consumer and worker advocates who have worked to ensure fair treatment of consumers purchasing retirement income products, the best interest standard must meet the following criteria to earn our support: (1) the “best interest” standard must be measurably higher than the existing suitability standard; (2) the “best interest” standard must include meaningful restrictions on conflicts of interest; and (3) the “best interest” standard requires more than procedural requirements for information collection and documentation. It requires good consumer outcomes and routine regulatory monitoring of consumer outcomes. If the NAIC were to develop a best interest standard for annuity sales that meets these criteria, it would greatly enhance protections that apply when annuities are sold outside of retirement accounts.

Download PDF