In May, lawmakers in the state of Minnesota became the latest group of legislators to officially adopt a version of the suitability in annuity transactions model put forth by the National Association of Insurance Commissioners in 2010. They did so without a need for the governor's signature.
According to a report from Life Health Pro, the bill received such wide bipartisan support in both the state's House of Representatives and Senate (with votes of 127-7 and 55-8, respectively) that it became law without the signature of Gov. Mark Dayton. States were obligated to adopt the various aspects of the NAIC's annuities model or a similar regulation by June 16, and this bill became law on June 1. The decision to adopt the rules made Minnesota the 31st state in the nation to do so.
Prior to the passage of this legislation, Minnesota had two different provisions in place with relation to the suitability of annuities provisions, the report said. One covered producers, while the other defined unfair claims practices. The new bill increases a number of consumer protections. While it does not adhere to all of the NAIC's recommendations, it allows regulators more authority to review and supervise products before they are introduced to state residents.
In 2012, Dayton vetoed a bill that would have put similar measures in place. While he had some objections to the latest version, he did note that it would significantly increase consumer's protections, with a specific benefit coming to the state's senior citizens.
With new rules being created in most states nationwide, companies should review their products to determine whether the products will comply with the new state regulations. In doing so, they may also be able to identify new ways to target residents of those states for products that might be uniquely beneficial to them.