NAIFA discusses financial security issues on Capitol Hill

By Susan Rupe

Insurance and financial professionals visit the U.S. Capitol today to spread the message that Americans need access to reliable advice and affordable products to reduce risks and protect assets.

The National Association of Insurance and Financial Advisors is holding its annual Congressional Conference. The event began Monday with a policy briefing and concludes today with members visiting their elected representatives.

Among the issues NAIFA members want to discuss with Congress is implementing a best interest standard of care, making technical corrections to SECURE 2.0, protecting the independent status of producers and sponsoring the Secure Notarization Bill (S. 1212).

Best interest

NAIFA has been promoting the Best Interest Standard, as embodied in rules such as the Securities and Exchange Commission’s Regulation Best Interest and the National Association of Insurance Commissioners’ Annuity Suitability Model.

“Over the years, we have worked together for a common goal: Making sure people have access to advice and protection,” said Susan Neely, president and CEO of the American Council of Life Insurers told NAIFA members on Monday.

She pointed to the Department of Labor’s developing of additional rules that are expected to restore much of the DOL’s vacated 2016 fiduciary-only approach to providing retirement investment advice. The best interest standard, she said, would ensure customers’ interests are put first and would maintain affordable access to financial professionals.

“We think they have a solution in search of a problem and we’re fighting for access for all Americans,” she said of the fiduciary-only standard.

Neely pointed to a Morning Consult study that said 91% of workers want options when it comes to financial guidance. “People are anxious and want the help of financial professionals,” she said. “So why would the DOL push the fiduciary-only regulations that would restrict access?”

“We had a significant win in 2018 and we thought that it was done,” Jayne Fitzgerald, NAIFA director of government relations, said of a federal court tossing that rule out, ruling that the DOL exceeded its authority by creating a new regulatory scheme for the retirement plan space. “Unfortunately, we now understand the DOL has put a reworking of the fiduciary-only rule on their agenda. We are hearing rumors they may come out with a new rule that may mirror the rule picked apart by the 5^th Circuit Court of Appeals in 2018.”

Fitzgerald urged NAIFA members to ask members of Congress “to keep an eye on what DOL is doing in next week or months, to see if they release a rule.”

Fix SECURE 2.0

SECURE 2.0 was signed into law on Dec. 29, 2022, but some technical corrections to the bill must be made – specifically, to preserve catch-up contributions to retirement plans and any additional proposals to enhance caregivers’ ability to make those contributions.

NAIFA members are asking Congress to fix a drafting error in SECURE 2.0 that may put catch-up contributions at risk in 2024. Members want Congress to support legislative and regulatory efforts to correct the error.

The part of SECURE 2.0 in question is the provision that allows retirement plan participants between the ages of 60 and 62 to make additional catch-up salary deferral contributions to their plans. That part was inadvertently deleted from the bill.

Protecting NAIFA members’ independent status

NAIFA members want to exempt insurance and financial advisors from being classified as employees under federal legislation or regulation. A NAIFA survey showed that 95% of the association’s members operate as independent contractors and want to remain so.

Members also oppose a new worker classification rule proposed by the DOL that would change the current federal independent contractor standard and would classify advisors as employees.

NAIFA supports secure notarization

The COVID-19 pandemic led to a 15% increase in death claims, NAIFA said, and also changed the way many companies conduct business.

Members are asking Congress to support S.1212, a bill to authorize electronic and remote notarizations. This bill allows a notary public commissioned under state law to remotely notarize electronic records and perform notarizations for remotely located individualsMembers said this bill is an additional way to provide consumers with access to advice and financial products.

Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected]. Follow her on Twitter @INNsusan.