Insurance division adopts rule to protect consumers, delays standards

The Iowa Insurance Division has set a final rule that will require annuity agents to act in the best interest of their customers, but related standards have been delayed.

The new rule follows work by the National Association of Insurance Commissioners to develop a model Suitability in Annuity Transactions Model Regulation that complies with U.S. Securities and Exchange Commission regulations. The Iowa division held a public comment period and hearing on the rules earlier.

Iowa Insurance Commissioner Doug Ommen, who regulated securities, said Iowans had demanded the protection.

“Iowans expect their financial professional to act in the consumer’s best interest when recommending an annuity,” Ommen said in a statement. “Iowa not only expects it, but we will require it.”

Ommen said standards related to the rule will come later in the year. “When regulatory changes are made, it’s important to make sure implementation timelines work for all parties,” Ommen said. “We received several comments requesting that due to COVID-19 we delay the proposed best interest standard in our securities regulations. We have decided that is the appropriate course. I anticipate proposing best interest securities standards again later this summer.”