Best interest standard for annuities (R 2023-05)

HB 1120, concerning the best interest standard for annuities, passed during the 68th Legislative Session. The new law will update Washington's suitability standard for annuity transactions to a best interest threshold and aligns with updates NAIC made to Model Regulation #275 on annuity transactions. The new law requires producers (and insurers where no producer is involved) to act in the best interests of their consumers when recommending annuities, complete annuity specific training, and to establish and maintain recommendation supervision systems that ensure the consumer's needs and financial objectives are met. Rulemaking will align the regulations in the Insurance Code with the new law and updates to NAIC Model Regulation #275. Rulemaking will update training requirements, revise the prior suitability standard with the new best interest threshold, and generally achieve alignment between the applicable authorities.