NAFA Response to Request for Comment: Revisions to the NAIC Model Rule #275, Suitability in Annuity Transactions

NAFA, the National Association for Fixed Annuities,1 submits this letter in response to the NAIC Annuity Suitability Working Group’s (the Working Group) request for comments and suggested revisions to the NAIC Suitability in Annuity Transactions Model Regulation (MDL #275) that would establish a best interest/consumer-focused approach and/or process for the sale of annuity products.

View the comment HERE

After Fifth Circuit Vacates Fiduciary Rule, NAFA & DOL Agree to Drop Lawsuit

WASHINGTON (Mar. 24, 2018) —  Late yesterday, the National Association for Fixed Annuities Board of Directors announced it is withdrawing its lawsuit challenging the Department of Labor “Fiduciary Rule.” In a filing with the U.S. Court of Appeals for the D.C. Circuit, NAFA and the United States Department of Justice agreed to a voluntary dismissal of the appeal.

NAFA’s decision comes on the heels of a March 15th ruling by the Fifth Circuit Court of Appeals, which vacated the Fiduciary Rule in its entirety. The NAFA lawsuit was one of two lawsuits challenging the authority of the Department of Labor to issue the rule.

NAFA’s decision comes on the heels of a March 15th ruling by the Fifth Circuit Court of Appeals, which vacated the Fiduciary Rule in its entirety. The NAFA lawsuit was one of two lawsuits challenging the authority of the Department of Labor to issue the rule.

“We are very pleased the Fifth Circuit understood the harms the Fiduciary Rule created for middle American retirement savers. This ruling vindicates both NAFA’s and the Fifth Circuit plaintiffs’ chief concerns, and, as a result, we see no reason to continue to pursue our litigation in another federal circuit court,” said NAFA Executive Director Chip Anderson.

NAFA brought its challenge to the Fiduciary Rule nearly two years ago in the D.C. District Court, while the Chamber of Commerce and several other trade organizations brought a similar challenge in the Northern District of Texas. The lower courts in both cases ruled in favor of DOL (upholding the rule), but, on appeal, the Chamber prevailed in the Fifth. NAFA believes the Fifth Circuit decision renders its case moot.

“We still have a lot of work to do,” said Anderson, “but now we will focus our energies on promoting insurance regulations that properly recognize differences among financial products and the way those products are delivered” said Anderson. He indicated NAFA will continue to engage with industry stakeholders, the NAIC, and other state and federal policymakers.

“We are confident that fixed annuities will always play an important role in meeting the needs of retirement-oriented consumers and will continue our fight to promote fair-minded regulation that give consumers real choice in a vibrant financial services marketplace.”

Fifth Circuit Strikes Down Fiduciary Rule

Circuit Court Rules in Favor of Americans Planning for Retirement

Today, March 16, The National Association for Fixed Annuities released the following statement on a decision by the U.S. Court of Appeals for the Fifth Circuit regarding a legal challenge to the Department of Labor’s fiduciary rule:

“The court’s decision ensures that millions of Americans will have access to fixed annuities and other financial products, along with advice from agents and financial planners, as they plan for and live in retirement. NAFA is pleased to see the Court has struck down this unnecessary intrusion into the realm of financial regulation.”

View the 5th Circuit Court decision HERE.

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About NAFA
NAFA, the National Association for Fixed Annuities, is the premier trade association exclusively dedicated to fixed annuities. Our mission is to promote the awareness and understanding of fixed annuities. We educate annuity salespeople, regulators, legislators, journalists, and industry personnel about the value of fixed annuities and their benefits to consumers. NAFA’s membership represents every aspect of the fixed annuity marketplace covering 85% of fixed annuities sold by independent agents, advisors and brokers. NAFA was founded in 1998. For more information, visit www.nafa.com.

Download a PDF of the release here. »

NAFA Announces Search for New Executive Director

 

WASHINGTON (Mar. 6, 2018) — The Board of Directors for the National Association for Fixed Annuities, NAFA, announced yesterday that they are beginning a search for a new Executive Director. After careful consideration of the association’s long-term goals, which will focus on growth, expanded advocacy and engagement on behalf of fixed annuities and the annuity industry, it was determined that it was time to seek a new Executive Director.

“We thank Mr. Anderson for his leadership. We are grateful for his guidance through the lawsuit against the Department of Labor and other areas of issue NAFA faced over the last three years,” said Dominic Cursio, chairman of NAFA’s Board of Directors.

Anderson has been a long-standing member of the association and stepped in three years ago as its Executive Director during a time of transition. Anderson will continue in his current role and be an integral part of the selection committee, continuing his support through the transition period.

NAFA is now actively pursuing a candidate who can execute the Board’s strategic vision for the organization, enhance NAFA’s membership experience, and advocate for the value of fixed annuities. Individuals interested in the Executive Director position can submit their resume and a cover letter via email to nafacareer@gmail.com until April 15. A list of candidate requirements may be viewed here.

NAFA’s initial goal is to have a new Executive Director selected in time for an introduction to membership at the Annuity Leadership Forum and Hill Walk that will be held at the Grand Hyatt Washington in Washington, D.C. from June 13-15.

“Of course, we won’t rush the process to hit a date as we want to find the right candidate that can help NAFA meet its long-term objectives,” added Cursio.

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About NAFA
NAFA, the National Association for Fixed Annuities, is the premier trade association exclusively dedicated to fixed annuities. Our mission is to promote the awareness and understanding of fixed annuities. We educate annuity salespeople, regulators, legislators, journalists, and industry personnel about the value of fixed annuities and their benefits to consumers. NAFA’s membership represents every aspect of the fixed annuity marketplace covering 85% of fixed annuities sold by independent agents, advisors and brokers. NAFA was founded in 1998. For more information, visit www.nafa.com.

Download a PDF of the release here. »

NAFA Files Comment Letter to NY Dept. of Financial Services

Washington (Feb. 26, 2018 – NAFA submitted a comment letter to the New York Department of Financial Services regarding the Department’s proposed First Amendment to NY Insurance Regulation 187, Suitability in Life Insurance and Annuity Transactions (11 NCRR 224).  The proposed amendment would greatly expand the current NY regulation to apply not only to annuity transactions but to all life insurance sales  and would add a new best interest of standard for life insurance and annuity transactions. It would also expand the suitability analysis and duties, and it would create a much broader definition of what would be considered a “transaction,” to include not only the recommendation of the annuity or policy but to any “modification or election of a contractual provision,” creating an ongoing obligation beyond the recommendation or the issuance of the contract. Given the uncertainty surrounding the status of the NAIC’s work on its proposed revisions to the NAIC Suitability in Annuity Transactions Model Regulation (which NAFA provided a comment letter on in January, available HERE), the still-unresolved nature of the federal fiduciary duty rule, and the expected work by the SEC to create a uniform fiduciary standard, NAFA’s comment letter to the NYDFS requests the Department to delay adoption of the Proposed Amendment and to coordinate its efforts with the work being done by the NAIC in order to create greater harmonization across state lines for the market standards related to annuity transactions.  NAFA’s comment letter to the NYDFS can be found HERE.

NAFA Files Comment Letter with NAIC

On Monday, Jan. 22, NAFA submitted a comment letter to the NAIC, Annuity Suitability Working Group in response to their request for feedback on proposed revisions to the NAIC Suitability in Annuity Transactions Model Regulation (#275).  The proposed draft would amend the current model rule to include a new Best Interest Standard of Conduct.  NAFA’s comment letter discusses in detail concerns regarding the proposed revisions, primarily focusing on the difficulty of supervising – and ensuring – producer compliance with a best interest standard that is inherent in the independent agent distribution system – under which the fixed annuity industry largely operates.  NAFA’s Government and Legal Affairs Committee created a working group in July 2017 to address the NAIC’s intent to amend the suitability model rule.  Members of this working group have had the opportunity to meet several times with members of the NAIC’s Working Group to discuss in person the interests and concerns of NAFA membership.  NAFA looks forward to continuing to collaborate with the NAIC as it moves through the drafting process.  A copy of NAFA’s comment letter is available HERE.

NAFA Welcomes 2018 Board of Directors

New Leadership Poised to Continue Fight against Unnecessary Regulatory Overreach

WASHINGTON (Jan. 15, 2018) — The general membership of NAFA, the National Association for Fixed Annuities, approved recommendations for its newly elected 2018 board of directors at the association’s annual meeting held recently in San Diego, Calif. Nominations were received from the membership at large, and candidates were thoroughly vetted by the current board before being announced during the association’s annual Annuity Distribution Summit. With all present at the meeting in favor of the new appointments, five new members join forces with current leadership to continue advocacy and education efforts critical to the future of the fixed annuity marketplace.

Newly appointed board members include: Jason Kestler of Kestler Financial Group, Adam Lunardini of Delaware Life Insurance Company, Brad Newcomb of Independent Planners Group, Janet Sipes of AmeriLife and Eric Taylor of AIG.

Dominic Cursio of M3 Financial, Inc. will assume the role of chairman of the board of directors, taking over for past chair Brian Mann of Partners Elite Advisor Group. Jim Maietta of Allianz will roll up to vice chair and Chris Conroy of North American Company for Life & Health Insurance to secretary, while Lauri Beck of Insurance Network America will join the executive operating committee as its newly appointed treasurer.

“As we continue the fight to protect fixed annuity products, as well as those who develop, distribute and support them, the need for leadership excellence from our organization has never been more important,” said Chip Anderson, Executive Director of NAFA. “Our new appointees stand poised and ready to join the talented professionals currently serving on our board of directors in helping guide our strategic vision on behalf of all Premier, Supporting and Affiliate Partners. Additionally, they will move our litigation efforts against the Department of Labor forward while proactively addressing other pertinent issues that stand to impact our industry and the consumers we serve.”

NAFA membership subsequently approved the entire board roster, which includes the following current members: Tony Compton of Great American Insurance Group, Heather Kane of EquiTrust Life Insurance Co., Eric Marhoun of Fidelity & Guaranty Life, Randy Matzke of Advisors Excel, Jeff Maxey of InsurMark, Paul McGillivray of M&O Marketing, Kevin Mechtley of North American Company for Life and Health Insurance, Mike Morrone of Nationwide and Margo Thompson of The Annuity Source, Inc.

Of behalf of its members, NAFA then recognized the contributions of exiting board members Cary Carney of Voya Financial, Rich Lane of Standard Insurance Company and Kirby Wood of American Equity with commemorative plaques and pens.

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About NAFA
NAFA, the National Association for Fixed Annuities, is the premier trade association exclusively dedicated to fixed annuities. Our mission is to promote the awareness and understanding of fixed annuities. We educate annuity salespeople, regulators, legislators, journalists, and industry personnel about the value of fixed annuities and their benefits to consumers. NAFA’s membership represents every aspect of the fixed annuity marketplace covering 85% of fixed annuities sold by independent agents, advisors and brokers. NAFA was founded in 1998. For more information, visit www.nafa.com.

Download a PDF of the release here. »

Financial Advisor “Despite Delays, DOL Rule Becoming Law Of The Land, Expert Argues”

DECEMBER 1, 2017 • 

“Yes,” National Association for Fixed Annuities Counsel and Director of Government Affairs Pam Heinrich said when asked if the association would proceed with its lawsuit to vacate the DOL rule, even after the agency’s 18-month delay. “Absent changes on how the rule will go into effect in July 2019—something that hasn’t happened as of yet so we can not count on—NAFA needs to continue the fight in the court system,” Heinrich told Financial Advisor Magazine.

“After the 18-month delay ends, in the event that there are no further changes to the rule, our industry will be irreparably harmed because we will be bifurcated under two separate exemptions [for disclosing commissions and potential conflicts of interest]: BICE [Best Interest Contract Exemption] for fixed-index annuities and PTE 84-24 for fixed declared rate annuities. Putting fixed-rate annuities under BICE will harm our industry and also consumers—everyday Americans who benefit from these retirement savings products,” Heinrich said.

Continue Reading the Article HERE

VeriFyle and the National Association for Fixed Annuities Announce a Partnership to Provide Secure Communications Platform to Members

Dear NAFA Members,

As the number of cyber attacks on small and mid-sized businesses continues to rise, NAFA is taking a proactive approach to helping members protect themselves, their producers and their clients.

Beginning on October 31st, all NAFA members will be eligible to sign up for VeriFyle ProTM, a secure document-sharing and messaging service, with patented encryption-key management technology, for the highly discounted price of only $3 per month.

  • VeriFyle replaces less secure technologies (like email and cloud sharing services like Dropbox) for the purpose of sharing sensitive information.
  • The service is extremely easy to use, completely secure, and can be customized for the look of your business.
  • VeriFyle provides a professional and secure way to present yourself to existing and prospective producers; and is free to use for all of your invited guests.
  • When you share something with someone, they simply click a link in an email and are taken directly and securely to the item(s) being shared.

Many businesses spend thousands of dollars per year for services that are less secure than VeriFyle. Through our partnership, NAFA members now have access to the most secure document-sharing technology on the web, at a fraction of the cost.

View the Member Alert HERE.

View the Demo Schedule HERE.

NAFA Strongly Supports the Proposed 18-Month Delay

Sept. 15, 2017- NAFA, the National Association for Fixed Annuities, submits this letter in strong support of the Department of Labor’s proposed 18-month extension of the current transition period and delay of the applicability dates for the Best Interest Contract Exemption (PTE 2016-01), the Class Exemption for Principal Transactions in Certain Assets Between Investment Advice Fiduciaries and Employee Benefit Plans and IRAs (PTE 2016-02), and the Prohibited Transaction Exemption 84-24 (PTE 84-24) as set forth in the Department’s recent Notice of Proposed Rulemaking.