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DOL Fiduciary News: October 19, 2017

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DOL Rule Delay Expected to Fuel 2018 Annuity Sales Spike

InsuranceNewsNet; October 18, 2017

The expected 18-month delay in the Department of Labor fiduciary rule will drive a healthy 2018 annuity sales rebound, analysts say.

New sales of individual U.S. fixed and variable annuities are forecast to grow 5 percent in 2018, LIMRA analysts said. In the spring, before the delay was announced, LIMRA forecast up to a 15 percent drop in fixed and variable sales.

Companies sold $222.1 billion worth of annuities in 2016 and analysts predict sales will drop 5 percent to 10 percent this year, LIMRA reported, mainly due to the DOL rule uncertainty. In the coming weeks, the DOL is expected to officially delay the fiduciary rule until July 1, 2019.

“That’s great news for some of the fixed annuity carriers out there,” said Todd Giesing, director, Annuity Research for LIMRA.

PANC 2017: Washington Update

PLANADVISER | October 18, 2017

In the “Washington Update” panel at the 2017 PLANADVISER National Conference (PANC), Thursday, Thomas Clark Jr., a partner with The Wagner Law Group, informed the audience that “the fiduciary rule is in effect. It became effective in 2016 and was put into practice this past June,” he said, to kick off the discussion.

“What is being delayed, until the end of this year, [is implementing] the complicated exemptions,” he said. “The DOL [Department of Labor] has proposed delaying them an additional 18 months, until 2019. It is processing the comment [letters] and will send [the proposed rule] to the OMB [Office of Management and Budget]. It will then need to publish [the rule] in the Federal Register. Consumer protection groups have threatened to sue if the 18-month delay is put into effect.”

However, noted David Levine, a principal with Groom Law Group, Chartered, “The U.S. Chamber of Commerce might countersue, or the DOL might say that the fiduciary rule wasn’t done properly. It’s kind of like the bills to repeal Obamacare,” in that the efforts to squash the fiduciary rule’s best interest contract exemptions (BICE) have, so far, been for naught. “For those who wish for this to die, you might get it and regret it because the DOL might interpret the old rule in a new way,” Levine said.

PANC 2017: Fiduciary Differentiation Is Difficult

PLANADVISER | October 17, 2017

The third and final day of the 2017 PLANADVISER National Conference in Orlando opened with a frank discussion about how difficult it is to educate plan sponsors on the varying responsibilities they carry as Employee Retirement Income Security Act (ERISA) fiduciaries.

As laid out by Heidi LeMieur, director of client relations for the Retirement Learning Center, changes made to the fiduciary rule by the now-long-gone Obama administration were very significant and are still poorly understood by many plan sponsors. Further complicating the situation is that the Trump administration and the Republican-controlled Congress have pledged to make their own changes to the ongoing reforms.

Along with fellow panelist Steve Niehoff, chief operating officer (COO) at the Pension Resource Institute, LeMieur suggested that most plan sponsors have an understanding that there has been a shift in the fiduciary landscape, but the finer points of the reforms elude them.

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