NAFA Criticizes IMO Exemption as “Too Little Too Late”
NAFA Stands By Its Efforts to Seek Repeal
WASHINGTON D.C. (January 18, 2017) — NAFA, the National Association for Fixed Annuities indicated today it would continue its challenge to the Department of Labor fiduciary rule, notwithstanding the release earlier today by DOL of a proposed class exemption to permit certain insurance intermediaries to be “financial institutions” for purposes of selling fixed annuities under the rule.
“This is the classic case of too little too late,” said Chip Anderson, Executive Director of NAFA. “It’s too little because it comes attached with strings and conditions that still make the rule unworkable for most of the fixed annuity industry.”
“It’s too late because the proposed exemption must still go through notice and comment and there simply will not be enough time once the exemption is final for the fixed annuity industry to reshape itself to meet the exemption’s requirements prior to the April 10 implementation date. No industry of this size can turn on a dime, so the timing here is unrealistic and unfair,” Anderson said.
NAFA has been a staunch opponent of the fiduciary rule as written and brought legal action in June to challenge the rule in federal court.
“It is pretty outrageous that the current administration only now has come out with this proposed exemption when it is on its way out the door,” said Anderson. Anderson noted the first application for an exemption for IMOs was filed last May and that DOL pointed to the prospect of such an exemption in court to blunt NAFA’s arguments that the rule is unworkable for the fixed annuity industry.
“This is uniquely unfair to the providers of fixed annuities” according to Anderson because other financial services providers including securities brokers and banks would not be reliant on the newly-created exemption. Anderson emphasized the rule remains unworkable even with the new exemption and NAFA will urge the Trump administration to repeal the rule before it becomes operational in April 2017.
“As we have said many times, NAFA believes the fiduciary rule will disrupt the distribution and availability of fixed annuities and have a particularly adverse impact on the low and middle income consumers who have come to rely on these valuable retirement savings products,” said Anderson.
NAFA, the National Association for Fixed Annuities, is the premier trade association exclusively dedicated to fixed annuities. Our mission is to promote the awareness and understanding of fixed annuities. We educate annuity salespeople, regulators, legislators, journalists, and industry personnel about the value of fixed annuities and their benefits to consumers. NAFA’s membership represents every aspect of the fixed annuity marketplace covering 85% of fixed annuities sold by independent agents, advisors and brokers. NAFA was founded in 1998. For more information, visit www.nafa.com.