Sen. Elizabeth Warren has taken another shot at insurance marketers in the conflict-of-interest issue – this time with two barrels.
The Democratic senator, a vocal proponent of the Department of Labor’s fiduciary rule, released an update last week to a report she said detailed rich perks that motivate advisors to lure consumers into annuities that are not in their best interest. Also, she sent a letter this week to the acting labor secretary contending that financial firms want to see the fiduciary rule go into effect.
The efforts are in response to the Trump Administration’s efforts to delay and perhaps rescind the regulation, officially known as the conflict of interest rule.
Warren was an early supporter of the rule when it was proposed in April 2015. Later that year, she released the report, “Villas, Castles, and Vacations: How Perks and Giveaways Create Conflicts of Interest in the Annuity Industry,” to bolster the case for the regulation.
Warren issued an update last week with a new secondary title: “Protections from Financial Adviser Kickbacks, High Fees, & Commissions are at Risk.”
It lists 24 independent marketing organizations and insurance companies and spotlights their “lavish international travel” bonuses. The Massachusetts senator also described the IMOs pushing for the delay as “giant financial companies who benefit from this corrupt status quo” pushing to “halt this commonsense protection.”
As with the earlier report, Warren used material she requested from the organizations, including ads depicting the exotic destinations. The report depicts an array of perks that she calls kickbacks: “luxurious, all expenses-paid vacations to destinations like Aruba, the Bahamas, Ireland, and
South Africa, golf outings, iPads and other electronics, expensive dinners, theatre or professional sports tickets, and sports memorabilia.”
The organizations are all related to insurance annuities and the report does not discuss financial institutions that also offer trips and other bonuses. Companies such as Raymond James and Edward Jones offer similar trips and other bonuses that Warren criticized. In fact, one of the companies she cited in the press release announcing the report, Transamerica, also offers sales incentives, such as trips to such locations as Cabo, Jamaica, Hawaii and Ireland.
The DOL letter was not the first time Warren asked an agency to act on behalf of the rule. Just before the final rule was issued last April, she asked the Securities and Exchange Commission to investigate opponents to the regulation.
The SEC apparently did not take up Warren’s call and has not moved on issuing its own fiduciary rule, which was encouraged by the Dodd-Frank financial reform law.
Steven A. Morelli is editor-in-chief for InsuranceNewsNet. He has more than 25 years of experience as a reporter and editor for newspapers, magazines and insurance periodicals. He was also vice president of communications for an insurance agents’ association. Steve can be reached at email@example.com.
© Entire contents copyright 2017 by InsuranceNewsNet.com Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.com.