By Paula Aven Gladych
In a letter to the Federal Insurance Office Monday, the Insured Retirement Institute encouraged the FIO to focus on the insurance regulatory system in the context of the current state of retirement savings in America and the need for consumers to insure against the risk of outliving their assets
as part of any assessment of the regulation of the insured retirement industry.
The letter was in response to the FIO’s request for “Public Input on the Report to Congress on How to Modernize and Improve the System of Insurance Regulation in the United States.”
“Seventy-nine million baby boomers today face immediate and unprecedented retirement income challenges—challenges that simply did not exist in earlier generations,” stated IRI President and CEO Cathy Weatherford in the response letter.
“In particular, when looking at the financial preparedness of middle-income consumers nearing retirement, IRI’s research shows a concerning lack of savings. Nearly one-third of baby boomers cite having adequate retirement assets as a top concern, while over half said they will work for income in retirement
, meaning they actually will not be retired. This reality underscores the critical importance of educating consumers about the need to create a prudent, well-thought-out retirement income plan, as well as the importance of a regulatory environment that encourages consumers to meet these needs and creates the best environment in which the industry can provide products and services in the most efficient and cost effective manner possible.”
The Institute recommended that the FIO include the following items in its report:
- Federal and state regulators should provide consumers more education regarding the risk of outliving their assets and the financial strategies that can provide guaranteed lifetime income.
- Congress should pass the Lifetime Income Disclosure Act to assure workers receive adequate information about their retirement lifetime income needs.
- The Securities & Exchange Commission should adopt a variable annuity summary prospectus and other summary disclosures providing more user-friendly consumer information and encouraging greater use of guaranteed lifetime income products.
- All states should adopt the Interstate Insurance Product Regulation Compact, or product standards and approval deadlines consistent with the Compact, and the Compact should complete products standards for all products.
- FIO should recommend Congressional adoption of NARAB II legislation and continued state pursuit of full reciprocity and uniformity in the agent licensing process.
- Producer examination standards should be uniform and transparent.
- Market conduct examinations should be conducted in a coordinated and efficient manner on a consolidated basis.
- Any resolution authority should maintain the current prioritization of policyholder claims and the current status of separate account assets that apply to annuity products.
The Insured Retirement Institute is a not-for-profit organization that promotes consumer confidence in the value and viability of insured retirement strategies.
Originally published on BenefitsPro.com