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DOL Fiduciary News: January 5, 2018

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NAIC Panel Considers Changes to Annuity Transaction Suitability Model

Best's News Service via Bestwire - January 04, 2018 10:27 AM

HONOLULU - The National Association of Insurance Commissioners’ annuity suitability working group is accepting through Jan. 22 comments on a draft suitability model that contains a best interest standard of conduct for annuities transactions.

The NAIC’s draft was introduced to the panel in early December just after the U.S. Department of Labor announced it would delay by 18 months to July 1, 2019, the application of parts of its fiduciary rule that includes a best interest contract exemption and a principal transactions exemption. The DOL said it would consider suggestions by the U.S. Securities and Exchange Commission and by state insurance regulators for possible changes to its proposal.

Panel Chairman Dean Cameron, Idaho’s insurance director, said the goal is to get the working group’s document voted on by the panel so the full Life Insurance and Annuities Committee can consider it during the NAIC Spring National Meeting to be held in March. However, Cameron said doing so was “a lofty goal.” The panel wants to improve on NAIC’s suitability model so state lawmakers ultimately will pass it, he said. “It’s a little bit of threading the needle, and we recognize that it’s a difficult work,” he said.

Regulatory Wrangling: The Year Ahead

Investment Advisor; January 2018 issue

For advisors and broker-dealers, one certainty remains constant from year to year: the challenge of keeping pace with a growing compliance checklist. While the Department of Labor's fiduciary rule will continue to consume advisors’ time in the New Year despite the recent 18-month delay of the rule's enforcement provisions, other high-priority items for advisors — and regulators — will be ensuring proper cybersecurity controls are in place, lassoing in troubled brokers, adjusting to an updated exam program and dealing with associated regulatory shifts.

Cybersecurity “is a business imperative,” says David Tittsworth, former CEO of the Investment Adviser Association and now counsel at Ropes & Gray in Washington. “Why would anyone want to deal with a firm if they have reason to believe that the firm is not taking proactive steps to avoid cyberattacks and to protect client information?” he asked.

Industry officials also anticipate Securities and Exchange Commission Chairman Jay Clayton making good on his promise to rein in bad actors in the advisory space through the agency's newly created Retail Strategy Task Force, as well as a potentially busy rulemaking year for the securities regulator. For Clayton, fiduciary rulemaking and cybersecurity are “two of his priorities” in 2018, Tittsworth says

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