On April 21, New Jersey became the 50th and final state to adopt the Best Interest standard for annuity transactions. The new New Jersey standard is based on the National Association of Insurance Commissioners (NAIC) Suitability in Annuity Transactions Model Regulation and is designed to protect consumers purchasing annuities by implementing requirements for duty of care, disclosure, conflict-of-interest and documentation of transactions. The Best Interest standard also aligns with the SEC’s Best Interest Regulation, offering retirement product purchasers additional safeguards.
New Jersey’s adoption of the Best Interest standard for annuity transactions comes at a time when the U.S. population is older than it’s ever been, with one out of every 11 Americans aged 65 or older. However, the number of Americans aged 65 and older is expected to increase 47% by 2050.[i] Each day, more than 11,000 people in the U.S. turn 65. By 2050, 1 in every 6 Americans is expected to be 65 or older. This “Silver Tsunami” brings increased focus on longevity, healthcare and finances during retirement years. Annuities remain the only products consumers can purchase that offer guaranteed income for life, and this makes them a very popular choice for consumers reaching retirement age.
The adoption of the NAIC Model Regulation will bring New Jersey into a more standardized approach to annuity transactions that is consistent with other states, helping to provide uniformity in protections for consumers while balancing the needs of insurers operating in multiple jurisdictions, allowing consistency in regulation across state borders.
[i] Source: The Population Research Bureau. From 2022 population levels, the number of Americans aged 65 and older is expected to increase 47% by 2050.
