Which group is specifically protected by the NAIC Suitability in Annuity Transactions Model Act?

The NAIC Suitability in Annuity Transactions Model Act primarily aims to safeguard senior investors. This group is particularly vulnerable to various financial risks, including fraud and unsuitable investment recommendations due to factors such as lower financial literacy, limited time horizon for retirement investments, and potential cognitive decline. The model act addresses these vulnerabilities by establishing standards for financial professionals to ensure that annuity recommendations are appropriate for senior clients' needs, objectives, and financial situations.

The protections for senior investors include requirements for financial professionals to conduct a thorough suitability analysis before selling annuities and to provide clear disclosures about the products. This is especially critical because seniors often face unique challenges related to income stability and healthcare costs in retirement. Therefore, the focus on protecting this demographic reflects the broader commitment to ensure that those who may be less equipped to decipher the complexities of financial products are provided with adequate safeguards.