Skip to content

DOL Fiduciary News: November 29, 2016

Please Note:

These links will take you directly to the homepage of the website that features the article.

To reach the article directly, copy and paste the article title into the search feature on the homepage of the publication website.


Kansas Judge Upholds DOL Fiduciary Rule

ThinkAdvisor; November 28, 2016

A Kansas federal judge has rejected the insurer Market Synergy’s request for a preliminary injunction to block the Department of Labor’s fiduciary rule – the second legal victory for Labor’s rule aimed at mitigating conflicts of interest in the retirement advice market. In his 63-page ruling, issued Monday (https://assets.documentcloud.org/documents/3226360/Market-Synergy-DOL-20161128.pdf), Judge Daniel Crabtree ruled that Market Synergy did not prove that DOL failed to follow appropriate procedures under the Administrative Procedures Act and Regulatory Flexibility Act of 1980 by putting fixed indexed annuities under the DOL rule’s best interest contract exemption, or BICE.
(http://www.thinkadvisor.com)

DC Judge Rejects NAFA Request to Delay DOL Rule

InsuranceNewsNet; November 28, 2016

A District of Columbia federal judge rejected plaintiffs’ request last week to set aside the fiduciary rule applicability date until its appeal is heard.

Judge Randolph D. Moss denied the request by the National Association for Fixed Annuities. On Nov. 4, Moss denied NAFA’s motion for a preliminary injunction and granted a summary judgment to the Department of Labor.

NAFA quickly appealed and requested two things: an expedited ruling and an injunction delaying the rule’s April 10, 2017 effective date. Moss granted the former motion, but left the date of compliance untouched.
(http://insurancenewsnet.com)

Don't hold your breath on DOL fiduciary rule repeal 

InvestmentNews (editorial board); Nov 27, 2016 @ 12:01 am

Congressional Republicans have been urging President-elect Donald Trump to scrap the Department of Labor's fiduciary rule, but financial firms trying to adapt to the rule should not hold their breath.

Mr. Trump has a great deal on his plate between now and next April, when the rule is due to be implemented. The fiduciary rule was not one of the changes he promised to make in his first 100 days in office.

Even if Mr. Trump is inclined to repeal the rule, the process of unwinding it will not be quick or simple. So the safest course is for companies to continue to move slowly to position themselves to accommodate their businesses to the rule, as it could well be implemented next year, at least for a time.
(http://www.investmentnews.com)

DOL rule puts a damper on Cerulli’s VA sales forecast

LifeHealthPro; Nov 28, 2016

Industry speculation has been rife for months that the U.S. Department of Labor’s new fiduciary rule would reduce sales of retirement products. Among them: individual retirement accounts, fixed indexed annuities and variable annuities.

In respect to the last, a new report from Cerulli Associates lends credence to the gloomy forecast. The November 2016 edition of “The Cerulli Edge: U.S. Monthly Products Trends,” forecasts “declining sales” owing to the conflict of interest rule’s myriad requirements, including point-of-sale disclosures.
(http://www.lifehealthpro.com)

DOL May Grant All IMOs Financial Institution Status in Fiduciary Rule

InsuranceNewsNet; November 23, 2016

The Department of Labor is likely to develop a new financial institution category allowing independent marketing organizations (IMOs) to sell fixed indexed annuities with retirement funds, but the reserving requirements might be a high hurdle for those marketing companies.

Reserving requirements have emerged as a major issue for regulators because the financial institution carries the professional liability on behalf of agents who could later be sued for recommending an annuity that in hindsight was not in the best interest of a retirement investor.

A class exemption would raise the profile of qualifying IMOs to one of a “financial institution” on a par with four other financial product distributors -- banks, broker-dealers, registered investment advisors and insurers -- for the purposes of the sale of financial products and advice into and for retirement accounts.
(http://insurancenewsnet.com)