Nobody wants to need a life insurance policy. We invest in them anyway, knowing they will only be put to use when disaster strikes. Annuities offered by life insurance help people pay bills, put food on the table, and make ends meet when a loved one – often a primary wage earner – passes away. These policies, and the people who need them, are now under direct attack from the Biden administration. Insurance Commissioner Doug Ommen is the only person standing in between these attacks and potential financial despair for families and retirees across Iowa.
It’s an unpleasant fact of life that life insurance can come in handy. Industry data shows that nearly 70 percent of people with life insurance feel financially secure, but fewer than half without life insurance feel the same. Nearly half (about 44 percent) of Americans say they would feel the financial burden within six months following the death of a primary wage earner. For many retirees and families with children, life insurance payouts are a critical part of their long-term planning. These people could quickly run out of options if not for the security provided by life insurance and annuity payments.
Iowans need as many affordable options as possible when it comes to planning for their future. However, some of these options are under attack by unelected left-wing bureaucrats in the Biden administration simply because the companies offering them are backed by private investments. The Federal Insurance Office (FIO) has singled out these plans for harsher rules than those offered by big insurance companies like MetLife, penalizing options that can lower costs, offer more variety to consumers, and have received A ratings from trusted sources like Barron’s.
The FIO’s most recent annual report revealed that the agency is leaning on the National Association of Insurance Commissioners (NAIC), a non-profit representing the chief insurance regulators from each state, to single out these plans with new policy recommendations that create separate standards for certain insurance companies. The rules being advanced through NAIC might be good for mega insurers who want less competition, but they’re harmful for families, retirees, and other people across Iowa who want to plan for the future. This very idea has been tried before with predictable and unfortunate results. Regulators in Europe targeted certain life and annuity products with similar penalties, resulting in fewer available products. We don’t need to run the same experiment in Iowa only to achieve the same result.
Using the NAIC to make policy is a problem in itself. The organization is not a regulator, but its recommendations can carry the weight of law. In Iowa, that would represent an end-around on the state constitution. Making matters worse, the NAIC staff is a revolving door with state insurance commissioners’ offices, meaning the people who work for insurance regulators are often writing the rules too. Inside the Iowa Insurance Division, a senior staff member named Carrie Mears has driven the harmful penalties advanced through the NAIC, pushing to allow crony capitalists to make the rules instead of our elected and appointed officials.
Families choose to pay into life insurance policies knowing that they will need them during a time of grief. They deserve options, not rules and penalties that make it harder for them to plan for the future. Commissioner Ommen should stand up to the NAIC, his own staff, and the Biden administration to stop their attacks on Iowa’s retirees and families.