Life insurance can be an uncomfortable topic. We only need it when something goes wrong. Even so, it is a central part of financial planning that helps families secure their financial future and protect them from a bad situation getting even worse. Today, access to certain types of life insurance options is under a direct threat from President Joe Biden’s administration as well as insurance regulators who are trying to penalize some insurers to restrict choices for people who need them most.
Studies have shown that nearly 70% of Americans with life insurance plans feel financially secure, compared to only half of those without one. Hardworking families in Ohio should not have to worry about being denied access to affordable and effective insurance plans while protecting their families against potentially devastating financial losses. Again, nearly half of Americans say they would feel a financial burden within six months of the death of their family’s primary wage earner, making it clear that these policies offer security during difficult times.
The Treasury Department is pushing for a set of new rules and penalties on companies that offer certain life insurance plans, namely those that are owned or backed by private investments. Despite the fact that these plans give Ohio families more options at lower costs, the Biden Administration has singled them out for penalties that will drive up prices and ultimately drive those options out of the market. They are pushing these penalties through the National Association of Insurance Commissioners, an nonprofit organization of state insurance regulators who frequently adopt the NAIC’s recommendations with the weight of law. Ohio’s Insurance Commissioner Judith French, who is a member of the NAIC, has the power to determine whether Ohio embraces the Biden life insurance penalties.
Until today, having competition in the market and multiple options for life insurance plans has been cost-effective for consumers and enabled insurance companies to offer a broader range of products. They also receive high marks from ratings agencies like Barrons, which entirely undermines the argument for such penalties. The Biden administration’s efforts to alter the rules on these insurance plans is a clear political move that will do nothing but compromise personal financial matters.
Let’s be clear: the National Association of Insurance Commissioners (NAIC) is not on our side. It is run by a revolving door of political appointees and insurance industry insiders who are pushing more and more regulation at the state level to influence the insurance market and allow big insurance companies to call their own shots.
Insurance Commissioner French, who was appointed to her position by Governor Mike DeWine has the power to make a real difference by rejecting penalties on life insurers recommended by the NAIC. Ohioans should not be forced to accept threats to their financial future proposed by the Biden administration.
Ohioans should have every tool available to protect their financial security, whether they are planning for retirement or preparing for disaster, and we must stand up to protect their options. It is crucial that Commissioner French and Governor DeWine take the necessary steps to ensure that Ohioans’ financial security is not compromised by moves that will create penalties that ultimately hurt the hardworking families across the state who deserve better.
