How would you feel if a group of complete strangers walked into your house and told you where to buy groceries, even if it wasn’t your preferred store or cost more than your usual supermarket? That scenario is coming soon to Minnesota – but instead of groceries, consumers will lose the freedom to choose their life insurance policies.
Many Minnesotans may not realize it, but a group of out-of-state bureaucrats is trying to push a major policy change that would seriously restrict the types of life insurance Minnesotans can purchase, potentially threatening our families’ future financial security. Minnesota Department of Commerce Commissioner Grace Arnold, along with Deputy Commissioner of Insurance Julia Dreier, must stand up for our state by rejecting this plan that will hurt consumers and the people they serve.
The National Association of Insurance Commissioners (NAIC), a group of out-of-state bureaucrats, are trying to impose major life insurance policy changes that will punish certain types of smaller insurers while letting big insurance companies play by their own rules. Specifically, politicians and their appointees are working to pass sweeping rules that target newer, smaller insurers while at the same time protecting the policies put forth by big insurers. These changes are being imposed with no analysis of how they will impact seniors, families, and communities of color, and with very little transparency.
Thousands of Minnesota families rely on life insurance payouts to support themselves after the death of a loved one. Families who are stretched to their financial limits thanks to the lack of a safety net in this country rely on life insurance annuities to provide financial security and peace of mind. It’s bad enough when tragedy strikes, but when it happens to a family without life insurance, it can quickly become impossible to pay their bills, put food on the table, or pay their rent or mortgage. A Forbes report says 70% of people with life insurance plans feel financially secure, while fewer than half of those without life insurance feel the same.
The NAIC’s attempt to punish certain insurance plans is a direct threat to consumers, to marketplace fairness, and to Minnesotans seeking financial security. With fewer life insurance products on the market, prices will go up for consumers – along with profits for big insurers. Consider the fact that about 60% of people who don’t have life insurance say cost is a major reason they are not covered, and one can see that this will only get worse with fewer options. Simply put, big insurers are trying to eliminate their competition and create a monopoly for themselves – even though the policies they are trying to penalize are high-quality investments and have “A” ratings from trusted ratings analysts.
Earlier this year, Minnesota Department of Commerce Commissioner Grace Arnold stated that her department will, “…work to assist and protect consumers and to ensure fair, competitive marketplaces.” Commissioner Arnold is exactly right about her mission, and now she could put her words into action. Commissioner Arnold and Deputy Commissioner Dreier should loudly reject the NAIC’s disastrous plan.
Kelly Fenton is a former Minnesota State Representative representing Woodbury.
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