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DOL Fiduciary News: August 10, 2016

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Primerica estimates $2M initial quarterly costs related to DOL rule

Tuesday, August 09, 2016 11:35 AM ET

Primerica Inc. has decided to leverage the best-interest contract exemption under the Department of Labor's new fiduciary rule in its brokerage business, employing a new advisory standard with initial costs of about $2 million per quarter through 2017, according to the company's executives.  

The final rule made the exemption more workable than the one previously proposed, CEO Glenn Williams said during a conference call to discuss second-quarter earnings. 

6 IMOs Apply for ‘Financial Institution’ Status Under DOL Rule

InsuranceNewsNet; August 9, 2016 

Six independent marketing organizations, or IMOs, have applied to the Department of Labor’s Office of Exemption Determinations to become a “financial institution."  

Earning the designation would clear the path for independent insurance agents to sell commission-based insurance and financial products under the Labor Department’s Best Interest Contract Exemption, or BICE.

A financial institution seal-of-approval from the DOL “puts us in a stronger position to attract a specific type of independent agent,” said Jason L. Smith, CEO and founder of Clarity 2 Prosperity, an IMO based outside Cleveland, which has applied.

Fight Brews in Kansas, Texas Courts Over DOL Fiduciary Rule

ThinkAdvisor; August 9, 2016   

A fight is brewing in the Kansas and Texas courts over whether to allow advocates and opponents of the Department of Labor’s fiduciary rule to state their case.

Insurer Market Synergy urged a Kansas judge Friday to throw out the “barrage” of amicus briefs filed by supporters of DOL’s rule on the basis that the briefs are “irrelevant” to Market Synergy’s request to preliminarily halt the rule’s implementation.

The DOL fiduciary rule: What is fiduciary investment advice?; Aug 08, 2016
By Marcia Wagner  

The DOL’s proposal expanding the definition of fiduciary investment advice was published April 20, 2015. Almost a year later, after public hearings and thousands of comment letters were submitted with respect to the proposal, the DOL finalized and published its new fiduciary rule on April 8, 2016. The new fiduciary rule is actually a package of regulatory guidance and separate exemptions comprised of a new definition of fiduciary investment advice and a number of related releases providing relief from ERISA’s prohibited transaction rules for fiduciary advisors necessitated by the dramatically expanded scope of the revised fiduciary definition.

Short-term pain, long-term gain?; August 08, 2016 

With the Department of Labor’s (DOL) fiduciary rule in place, it’s natural to ask how it will affect financial services companies and advisors’ businesses once it’s fully implemented. How much commission revenue might the industry lose and can fees replace that loss? Could the rule cause financial advisors to leave the business?

The short answer is that reliable data to measure the rule’s impact accurately won’t be available it’s been fully implemented. That lack of solid information led companies approached as sources for this article to decline sharing their internal projections. Similarly, industry analysts are waiting for post-implementation financial results. 

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