Minnesota is the latest state to adopt a version of the NAIC’s 2010 Suitability in Annuity Transaction Model law. By this month, all states must enact into law a version of that legislation that either meets or exceeds the NAIC requirements if they are to retain oversight of annuity sales.
In Minnesota, the bill – HF 791 – passed the House of Representative by a vote by 127 to 7 in April and the Senate by a roll call of 55-8 in May.
According to a spokesperson for the Minnesota Department of Commerce, annuity suitability provisions were previously covered under two separate statues: one governing producers and the other defining unfair claims practices law.
The spokesperson noted in an email that the current legislation includes more precise standards, supervision and review for the evaluation of unsuitable products before the point of sale to the consumer. It’s a modified version of the NAIC model, the spokesperson added.
The legislation became law June 1. Gov. Mark Dayton neither vetoed nor signed the bill into law. In a letter date May 13 to the speaker of the house, Paul Thissen, Dayton said that he vetoed a similar legislation last year. He said that he supported the opinion of that state’s attorney general, Lori Swanson, that “it would be preferable to require direct insurance company review of each policy.”
However, the governor noted the bill passed both legislative bodies by a wide majority with bipartisan support and would increase consumer protections, especially for senior citizens, in the state. “Therefore, I have decided that I do not wish to sign this bill into law, with the understanding that it will become law without my signature,” Dayton wrote.
According to the National Association of Fixed Annuities, Minnesota was the 31st state to adopt the NAIC model annuity law.