The Department of Labor will publish a proposed 60-day delay of its controversial fiduciary rule Thursday in the Federal Register.
In documents released this morning, the DOL announced a plan to accept public comments on the delay for 15 days from tomorrow. Additionally, the department will accept public comments on the substance of the fiduciary rule for 45 days from tomorrow.
The latter comments are to focus on the questions raised in a Feb. 9 directive from President Donald J. Trump. The DOL can opt to change the rule during the 60-day delay, wrote Timothy D. Hauser, deputy assistant secretary for program operations, Employee Benefits Security Administration, in today’s publication alert.
“Absent an extension of the applicability date, if the examination prompts the Department to propose rescinding or revising the rule, affected advisers, retirement investors and other stakeholders might face two major changes in the regulatory environment rather than one,” the alert read. “This could unnecessarily disrupt the marketplace, producing frictional costs that are not offset by commensurate benefits. This proposed 60-day extension of the applicability date aims to guard against this risk.”
The OMB reviewed the DOL request to delay the fiduciary rule and found it “economically significant.” While the finding usually means a longer comment period, likely 60 days, analysts said the Administrative Procedures Act does allow for a shorter comment period.
The DOL was thought to be seeking a 180-day delay. The resulting 60-day delay appears to be an attempt to reach a middle ground of sorts, said Erin Sweeney, a lawyer with Miller & Chevalier in Washington, D.C.
“By deferring the rules’ and related exemptions’ applicability for 60 days, this proposal could delay its predicted effects, and give the Department time to make at least a preliminary determination whether it is likely to make significant changes to the rules and exemptions,” the alert read.
The fiduciary rule requires agents and advisors to abide by the fiduciary standard in addition to the suitability standard when selling annuities with retirement funds. The rule also placed fixed indexed and variable annuities into a category requiring a financial institution's acceptance of liability. Insurance agents and almost all insurance intermediaries were not eligible under the rule to be financial institutions, shutting them out of the retirement market for selling fixed indexed and variable annuities.
InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at john.hilton@innfeedback.com.
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The cost to implement this program to the federal government is prohibitive . It has no real purpose for consumers. It will put hundreds of thousands of insurance agents out of business, not to mention the billions of dollars of lost revenue to the IRS.
We already have rules and regulations for agents and advisors to abide by, and almost all of them follow the rules. If It changes the ones that don’t follow the rules now will be the same ones that won’t do it right after the changes.
The insurance company’s have already taken away any incentives for selling one product over another, they have lowered our commissions down to historic lows. We think by doing that this will be passed on to the consumer, WRONG it just means the insurance co makes more money. Same story the RICH (the insurance co.) get RICHER and the poor(consumer) get poorer. DO WE REALLY THINK ONE MORE REGULATION is going to change that ?
Which TWO laws do they propose to take off of the books
The mere fact that unscrupulous agents are opposing a law that directs the agent to do what is in the best interest of the client and not in the best interest of themselves tells everyone what they need to know. Enough said.