While there is plenty of regulatory rumblings on several fronts, the Department of Labor is not reviving the dreaded fiduciary rule, a National Association for Fixed Annuities' spokeswoman said today.
Labor Secretary Alexander Acosta testified May 1 before the House Education and Labor Committee. He described department rulemaking vis-a-vis the late fiduciary rule, which was thrown out by the Fifth Circuit Court of Appeals one year ago.
Acosta fumbled his answer a bit, said Pam Heinrich, general counsel for NAFA.
"His testimony was a little ambiguous I think, so that got picked up in the industry press and was clickbait for several days," said Heinrich, speaking during a NAFA webinar today. "I really don’t think that Acosta meant they will be making a return to the old fiduciary rule."
Instead, the DOL is most certainly working on a rule that will in some way coordinate with rules being finalized by the Securities and Exchange Commission, Heinrich explained. But the trade association needs to remain vigilant when it comes to the fiduciary rule ideas, she said.
Comparing the DOL rule for "a zombie," she added, "we've got to keep it dead."
Other Rules' Updates
Heinrich was joined by NAFA president & CEO Chuck DiVencenzo and lobbyist Cliff Andrews for a few nuggets on other regulatory efforts:
Various state rules continue to pop up, with harsher rules found in the "blue states," Heinrich said. Recent successes include defeating state rulemaking efforts in Maryland and Arizona. But new rules are rumored to be in the works in states such as California, Connecticut and others, she added.
"When they pop up, we play whack-a-mole if its going to hurt members," Heinrich said.
A working group hopes to complete an annuity sales model law in time for the National Association of Insurance Commissioners' Summer Meeting Aug. 1-5, Heinrich said.
The working group is creating an annuity sales model law to send to the 50 states for adoption. Both regulators and industry executives are hoping to avoid a "patchwork" of standards that vary greatly from state to state.
The debate between conservative states such as Iowa and Idaho and more liberal states such as New York and California has often left working group members far apart. But the group has reached general agreement on rules that would create a best-interest-like standard.
Ohio Insurance Commissioner Jillian Froment has taken over as working group chair, noted Heinrich, although Iowa Insurance Commissioner Doug Ommen remains the vice chair. Ommen is a powerful figure who heads up the A Committee, the parent of the working group.
NAFA has attended all of the working group meetings, Heinrich said.
“Hopefully the work that we’re doing can influence the final outcome of the rule so we can continue to promote our products," she added.
InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.
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