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California Gov. Gavin Newsom introduced at the moment that he has signed state Senate Invoice 263, a invoice adopting the Nationwide Affiliation of Insurance coverage Commissioners’ annuity gross sales customary replace.
The signing makes California the forty fifth state to undertake the NAIC mannequin replace, which relies on the U.S. Securities and Trade Fee’s Regulation Greatest Curiosity.
The mannequin replace requires sellers of annuities to behave within the shopper’s finest curiosity and disclose potential conflicts of curiosity, however it doesn’t require the vendor to behave as a fiduciary or to maneuver away from gathering gross sales commissions.
The mannequin stands in opposition to the U.S. Division of Labor’s proposed fiduciary definition proposals, which might impose a fiduciary customary of care on any people and corporations offering funding recommendation to customers who’re rolling belongings over from 401(okay) plans, particular person retirement preparations and different retirement accounts.
Present California guidelines require annuity sellers to satisfy a suitability customary and to confirm that the annuities bought to customers meet their wants.
What it means: Newsom is a Democrat and the chief of essentially the most populous U.S. state. His resolution to signal SB 263 might weaken the Biden administration’s efforts to finalize and implement the DOL’s proposals.
SB 263:Â California Insurance coverage Commissioner Ricardo Lara, an elected Democrat, backed adoption of the NAIC mannequin replace in California.
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