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DOL Fiduciary News: August 9, 2017

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DOL May Announce Fiduciary Rule Delay This Month, Attorneys Say 

ThinkAdvisor; August 9, 2017

Now that the comment periods have expired on the Department of Labor’s fiduciary rule, industry groups say they “need certainty as soon as possible” about whether or not Labor will delay the Jan. 1 compliance date, and at least one attorney anticipates a quick delay.

“I expect that we will hear something [regarding a delay] at the end of this month or in the first half of September,” Fred Reish, partner in Drinker Biddle & Reath’s employee benefits and executive compensation practice group in Los Angeles, told ThinkAdvisor Tuesday.

Reish also anticipates that Labor will issue revisions to the rule, but that “there’s no telling” when such revisions will come.

Insurance execs: New retirement savings advisory rule dampening annuity sales; Tuesday, August 08, 2017 4:48 PM ET

Several life insurance executives referred during earnings calls to sluggish annuities sales that they blamed on the new Department of Labor Conflict of Interest Rule that became applicable to their businesses during the second quarter.

Full implementation of the fiduciary rule is scheduled for Jan. 1, 2018. But American Financial Group Inc. is uncertain whether the rule will take effect in its current form, Craig Lindner, co-president and co-CEO, said during the company's Aug. 2 quarterly earnings call. Subsidiary Great American Insurance Co. was the fourth-largest individual seller of fixed annuities in the U.S. for the first quarter at $976.0 million, according to the latest quarterly figures available from life insurance association LIMRA.

Observers and many in the life insurance business expected that the administration of President Donald Trump would block the change or make substantial alterations to it and were surprised when the new Labor Department leadership allowed the rule to take effect. American Financial expects its annuity premiums to be flat for 2017 compared with 2016, according to an investor presentation accompanying the company's earnings release. The insurer forecasts year-over-year growth in fixed annuity investments and reserves in 2017 and expects no major impact on results, Lindner said.

IRI Submits New Data Exposing Detrimental Impact of DOL Fiduciary Rule 

August 7, 2017

WASHINGTON, D.C. – The Insured Retirement Institute (IRI) submitted a response to the Department of Labor’s (DOL) Request for Information (RFI) showing the harmful effects already occurring under the partial implementation of the fiduciary rule. Through IRI’s latest comment letter, the Department of Labor was presented with new evidence demonstrating the negative consequences the fiduciary rule is having on both the insured retirement industry and retirement savers. 

IRI President and CEO Cathy Weatherford issued the following statement:

“IRI appreciates the opportunity to present the Department of Labor with new information confirming our concerns regarding the implementation of the fiduciary rule and to offer Secretary Acosta solutions for creating a workable best interest standard. This new information shows the rule is already negatively impacting the ability of many American savers to maintain access to a wide range of financial products and services. At a time when Americans are increasingly self-funding their own retirements, it is vital that access to advice and lifetime income products be preserved.

Lincoln Financial Advisors adds new divisional layer for fiduciary 

Financial Planning; August 08 2017, 10:00am EDT

Lincoln Financial Advisors poached a U.S. Bank executive for one of four new divisional head positions in what LFA’s chief describes as a shift from a “generalist” to a “specialist” structure.

Regulatory changes, particularly the fiduciary rule, prompted LFA head John DiMonda to add a new management layer above its 12 regional heads, he said last week. For the new position atop Lincoln’s Midwest market, DiMonda tapped John Ekman, who was a Midwest divisional manager at U.S. Bank.

The Department of Labor rule has led to costly changes at independent broker-dealers, including new hires to meet training and compliance needs. The LFA divisional heads direct resources across the firm, including parent Lincoln Financial Group’s investment management, insurance products and other services, DiMonda says. 

“We realigned our resources to capitalize on the strengths of the people we have working for us and our footprint in the marketplace,” DiMonda says. “They’re kind of the quarterbacks of the resources within the division.”

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