NAFA Confronts Onerous DOL Fiduciary Rule
The final fiduciary rule from the DOL was formally published in the Federal Register on April 8. Despite the muted responses by many industry observers, and in some cases certain parties indicating the rule provides new opportunities for the retirement industry, NAFA’s NAFA’s assessment is that the rule is completely unworkable for fixed annuities and will have harmful consequences for consumers who seek lifetime income options. assessment is that the rule is completely unworkable for fixed annuities and will have harmful consequences for consumers who seek lifetime income options.
NAFA is disappointed that the DOL decided to disregard our comments, and in fact, it made the final rule worse than the proposed rule. In particular, the DOL provided misguided and inaccurate negative comments about fixed indexed annuities and decided to place FIA’s under the deeply flawed and onerous Best Interest Contract Exemption (BICE). Vague and poorly drafted definitions of “financial institution,” “reasonable compensation,” and “material conflict of interest” among other terms, including providing for private rights of action has created what will be a BICE chasers paradise for trial attorneys in several years.
NAFA has spent countless hours working on the DOL rule since it was first proposed, and we will continue to fight for fixed annuities. On April 21, NAFA’s Board of Directors authorized that all options be considered, including litigation, to help protect the future of the fixed annuity marketplace.
In addition to reviewing legal options, NAFA strongly supports any efforts from the Hill to overturn the DOL rule. Fortunately, there are a number of Senators and Representatives who remain steadfast in their support of our industry and will continue to push various legislative remedies. Recently, the House passed a resolution, H.J. Res 88, along strict party lines that would overturn the DOL rule. The Senate has introduced a companion measure, S.J. Res 33, and will likely vote on the measure in June. Unfortunately, the President has already stated that he will veto the resolutions.
NAFA has spent countless hours working on the DOL rule since it was first proposed, and we will continue to fight for fixed annuities. Additionally, NAFA supports a package of House and Senate bills, H.R. 4293, H.R. 4294, S. 2502 and S. 2505, that would supersede the DOL rule and provide for workable retirement advice standards. However, these bills have little bipartisan support and momentum for passage regrettably has been slowing. Regardless, NAFA supports a congressional solution where all parties can start from a clean slate with bipartisan legislation in Congress that would create workable retirement protection standards for consumers.
NAFA will continue to exercise leadership in defending and promoting all fixed annuities.