NAFA submitted a letter to the Department of Labor

April 17, 2017- In a letter submitted to the Department of Labor, NAFA, the National Association for Fixed Annuities is urging a further delay of the fiduciary duty rule beyond its current June 9 partial applicability date, while the Department completes its comprehensive examination of the rule as directed by President Trump in his February 3rd White House Memorandum.

View the comment letter here.

NAFA has submitted a comment letter to the DOL regarding the proposed 60-day delay of the fiduciary rule’s applicability date

March 14, 2017- NAFA has submitted a comment letter to the DOL regarding the proposed 60-day delay of the fiduciary rule’s applicability date. As the comment letter makes clear, NAFA strongly supports a proposed delay to give the DOL time to review significant questions of law and policy raised by the rule and in support of the memorandum issued by the President on February 3, 2017.

View the comment letter here.

NAFA files a comment letter in general opposition to the Department’s Proposed Best Interest Contract Exemption for Insurance Intermediaries

February 17, 2017 – NAFA files a comment letter in general opposition to the Department’s Proposed Best Interest Contract Exemption for Insurance Intermediaries. Recognizing that the Proposed Exemption would have devastating effects on IMOs – particularly on small and mid-size organizations, many of which are NAFA members – NAFA’s comment letter addressed, in particular, the arbitrary and unjustifiable $1.5 billion premium threshold and the 1%-of-premium ‘financial responsibility’ set-aside requirement that IMOs would need to meet in order to qualify under the exemption.

View the comment letter here.

NAFA Files Emergency Motion for Injunction in Continued Fight to Stay DOL Rule

 

WASHINGTON (Dec. 1, 2016) — NAFA, the National Association for Fixed Annuities, announced Tuesday that it has filed an emergency motion for an injunction pending appeal with the U.S. Court of Appeals for the District of Columbia Circuit. The appeal is from an order and memorandum opinion of the federal district court issued Nov. 4 denying NAFA’s application for a preliminary injunction and motion for summary judgement in NAFA’s lawsuit against the Department of Labor’s fiduciary rule, and a subsequent district court order issued Nov. 23 denying NAFA’s motion for an injunction pending appeal.

“We are aggressively moving forward with our appeal of the lower court’s decision, but our immediate concern is to stay the rule’s implementation date set for April 10, 2017. With every passing day NAFA members are incurring excessive and unrecoverable expenses as they attempt to navigate the rule’s byzantine compliance regime. Moreover, we are extremely concerned about how quickly consumers may face an environment in which they no longer have access to the products and professional advice needed to retire with confidence,” said Chip Anderson, NAFA’s Executive Director.

View the complete PDF HERE.

NAFA to Appeal Court Decision on DOL Fiduciary Rule

NAFA Will Seek Expedited Review 

WASHINGTON (November 7, 2016) — The National Association for Fixed Annuities (“NAFA”) announced today, following a federal district court decision upholding the Department of Labor’s fiduciary rule, that it will appeal to the D.C. Circuit Court of Appeals.

“We are obviously disappointed by the court’s decision, but we have always assumed this case would get decided by a higher court and we are pleased the issues will get de novo review by the Circuit Court,” said Chip Anderson, Executive Director of NAFA. De novo review means the appellate court will consider the case without being bound or influenced by the lower court’s decision.

NAFA filed its lawsuit last June seeking a preliminary injunction to stay implementation of the rule, which is scheduled to go into effect in April 2017. Judge Randall Moss denied the preliminary injunction and at the same time ruled in favor of the DOL on the merits in upholding the rule. NAFA’s lawsuit, one of four lawsuits against the rule, challenges the DOL’s authority to issue the rule, asserts the rule creates an impermissible private right of action, contends the rule contains unconstitutionally vague requirements that compensation be reasonable, and alleges the manner of adoption of the rule by DOL was arbitrary and capricious.

View the complete PDF HERE

Dr. Jack Marrion Honored with Bo Johnson Spirit Award for Lifetime Achievement

 

WASHINGTON (Oct. 26, 2016) — NAFA, the National Association for Fixed Annuities, announced Dr. Jack Marrion as the recipient of its 2016 Bo Johnson Spirit Award for Lifetime Achievement at its eighth annual Annuity Distribution Summit this month. The award recognizes courage, spirit and determination that challenges the status quo, inspires others to achieve, contributes unselfishly to others, and works ethically and conscientiously to improve the fixed annuity marketplace.

The award was presented to Dr. Marrion by current NAFA board members Chris Conroy, senior vice president of sales for broker-dealer and national accounts at CreativeOne, and Paul McGillivray, director of special projects for M&O Marketing, both of whom nominated Dr. Marrion for the award. During the presentation, the two shared a colorful look at Dr. Marrion’s career thus far and why he truly epitomizes every aspect of the award through his continued outstanding industry contributions.

View the complete PDF HERE.

Illinois Court Declares Fixed Indexed Annuities Are Not Securities

 

NAFA Filed Amicus Curiae Brief, Pushed for Published Decision

WASHINGTON (Sept. 21, 2016) — After three years of agency and court litigation, the Illinois Appellate Court for the Fourth District has ruled that, under Illinois law, fixed indexed annuities are only to be regulated as insurance products and not as securities. This comes as a major victory for the fixed annuity industry as a whole, in addition to the more than 20,000 agents and advisors licensed to sell fixed annuities in the state.

The case began as an administrative action brought by the Illinois Secretary of State against Richard Van Dyke. The Secretary eventually ruled that fixed indexed annuity products should be regulated not only as insurance, as they had been for almost 50 years, but also as securities under the Illinois Securities Department. Miscategorizing the product in this way would have added another complex layer of regulation to indexed annuity sales and created an unworkable environment for agents and ultimately hindering consumer access to these valuable products. After this ruling by the Secretary of State (which was later affirmed by the Sangamon County Circuit Court), NAFA established a working group to address the matter. The Association then engaged the Chicago law firm of Quarles & Brady to assist in preparing an amicus brief in support of Van Dyke’s appeal, emphasizing how the Secretary of State’s ruling could devastate the industry in Illinois. NAFA’s brief also explained how the ruling had no support in any statute, rule or case law.

View the complete PDF HERE.

NAFA ALERT — Federal District Court Hears NAFA’s Challenge to DOL Rule

Last Thursday, a hearing on a motion for preliminary injunction and summary judgment was held in the United States District Court for the District of Columbia in Washington, D.C. in NAFA’s lawsuit against the Department of Labor. This is the first hearing in a string of lawsuits challenging DOL’s fiduciary rule. Attorney Philip D. Bartz of Bryan Cave LLP led NAFA’s litigation efforts in front of a standing room-only crowd.

U.S. District Judge Randolph D. Moss heard oral arguments from legal counsel on both sides for almost three hours. In response to lengthy questioning from the judge, Bartz focused on NAFA’s key claims, including:

  • The DOL rule is invalid on grounds that the agency exceeded its authority to regulate IRAs and that it improperly categorizes insurance agents as fiduciaries.
  • The rule creates a private right of action, which only Congress can do.
  • DOL’s decision to include fixed indexed annuities (FIAs) under the Best Interest Contract Exemption (BICE) in the final rule, with no opportunity for meaningful comment and without adequate justification, was arbitrary and capricious.
  • The timeline for the rule’s implementation is unreasonable and unworkable.

The hearing ended with an adjournment without decision, although NAFA anticipates a decision to be rendered in the next few weeks.

Additionally, lawsuits against the DOL rule filed in Kansas and Texas district courts are scheduled for hearings in September and November, respectively.

For more details, below is a sample of media coverage of the hearing:

Think Advisor — Insurers to ‘Have Their Butts Sued Off’ under DOL fiduciary rule: NAFA Lawyer

Morning Consult — DOL Defends Fiduciary Rule Authority to Federal Judge

InsuranceNewsNet — Tough Questioning in DOL Rule Injunction Hearing

Update: Illinois Department of Securities Action

Pam Heinrich, NAFA’s General Counsel, has provided the following summary of the Court’s decision, as well as the anticipated next steps in the case.

 

On July 29, 2016, a 3-judge panel of the Appellate Court of Illinois for the Fourth District issued a unanimous Order reversing the circuit court’s decision and the Illinois Secretary of State’s final order against Richard Lee Van Dyke (d/b/a Dick Van Dyke Registered Investment Advisor), finding that the evidence presented failed to establish that Van Dyke had violated the Illinois Securities Law of 1953 (“the Act”) in the sale of the fixed indexed annuities at issue in the case and that he perpetrated a fraud on his clients.  In so finding, the Court reversed the administrative order issued by the Illinois Secretary of State/Illinois Securities Department, which revoked Van Dyke’s investment adviser registration, prohibited him from selling securities in Illinois, and assessed fines and fees in excess of $350,000.

 

Importantly, the Court also found that fixed indexed annuities are not securities under Illinois securities law.

Continue Reading the Update HERE

NAFA Seeks Preliminary Injunction against DOL Fiduciary Rule

 

Association Files Suit Alleging ‘Irreparable Harm’ to Members

WASHINGTON (June 2, 2016) — NAFA, the National Association for Fixed Annuities, announced today that it has filed a federal lawsuit in the D.C. District Court challenging the Department of Labor’s new “fiduciary rule.” The lawsuit seeks a preliminary injunction to stay the rule, which is currently scheduled to become operational in April 2017.

“NAFA believes this action is necessary, not only to defend the interests of our members, but to protect consumers against excessive government regulation that will only hurt average working Americans trying to save for retirement,” said Chip Anderson, Executive Director of NAFA.

The lawsuit alleges the DOL rule is invalid on grounds that the agency exceeded its authority to regulate IRAs and that it improperly categorizes insurance agents as fiduciaries. The lawsuit further alleges that the rule creates a private right of action, which only Congress can do.

View the complete PDF HERE.