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.

NAFA Lauds Congressional Efforts to Stop DOL’s Fiduciary Rule

WASHINGTON (Apr. 26, 2016) — NAFA, the National Association for Fixed Annuities, announced official support for Congressional resolutions issued in both the House and the Senate last week that stand to derail the Department of Labor’s recently finalized rule on investment advice for retirement accounts. Offered under the Congressional Review Act, which allows Congress to halt a rule within 60 legislative days of its release, these measures highlight widespread concern that the fiduciary rule stands to harm the very individuals and businesses it purports to protect.

“Given the dramatic response by elected officials, industry professionals, small business owners and consumers alike, NAFA hoped the DOL would have made changes to ensure a workable outcome of the rule. Unfortunately, that wasn’t the case,” said Chip Anderson, Executive Director of NAFA. “We commend Senator Isakson and Representative Roe for introducing resolutions of disapproval and encourage their passage. Congressional support is critical as we advocate for maintaining saver and small business access to the products and professionals that can secure their future.”

The Senate introduced S.J. Res. 33 on April 19, while the House followed suit the next day with H.J. Res. 88. A resolution of disapproval needs a simple majority to pass, and cannot be filibustered or amended if acted upon during the 60-day window. However, these resolutions face an almost certain veto by President Obama.

Anderson noted, “It is clear a congressional solution is needed. We support efforts to overturn this rule and start from a clean slate with bipartisan legislation in Congress that would create a workable best interest standard for consumers.”

View the PDF HERE

NAFA Board Authorizes Action on Department of Labor Fiduciary Rule


WASHINGTON (Apr. 21, 2016) — NAFA, the National Association for Fixed Annuities, announced today that its Board of Directors authorized staff to consider all options for challenging the Department of Labor’s recently issued fiduciary rule, including efforts seeking legislative relief as well as possible litigation. In preparation for the rule’s release, the association formed a working group spearheaded by its legal team to conduct a thorough review and analysis of DOL’s new regulatory requirements. Now that the initial review is complete, NAFA is preparing to take action to ensure its members, American savers and small businesses across the country are protected from this unnecessary and unworkable overreach.

NAFA released the following statement on behalf of its Executive Director, Chip Anderson, to accompany the Board authorization.

“For the past year, NAFA worked diligently to provide constructive comments to the Department of Labor regarding its fiduciary rule. We were deeply concerned the proposed rule would not only harm businesses in all arms of fixed annuity distribution, but also hurt millions of Americans who rely on the financial advice and products provided by these businesses in order to successfully prepare for retirement.

“Unfortunately, after reviewing the more than one thousand pages of documentation and accompanying commentary that constitute this rule, it is clear DOL did not address our concerns in any meaningful way, and in fact made matters far worse by subjecting fixed indexed annuities to the onerous best interest contract exemption (BICE). While DOL would like everyone to believe the rule has been improved to placate industry concerns, it appears the fundamental flaws of this rule remain, and treating fixed indexed annuities like securities products is completely objectionable.

“Based on our review, despite all the political spinning, it is evident DOL largely ignored the serious issues raised by NAFA and indeed disregarded concerns expressed by thousands of individuals, including members of Congress, financial services professionals, employers, and individual savers across the country, all of whom will feel the devastating long-term effects of this new rule.

“Given the rule’s far-reaching implications, and the hasty and arbitrary manner in which DOL suddenly threw fixed indexed annuities into BICE, NAFA is left with no choice but to explore any and all options available to fight this rule. Ultimately, we remain committed to our core position and will continue advocating for solutions — in any venue necessary and proper — that balance the need for appropriate consumer protection with the need for retirees and pre-retirees to access quality advice and products, including fixed annuities, that allow them to confidently secure their retirement future.”

View PDF here.


NAFA Responds to DOL’s Issuance of Fiduciary Duty Rule


NAFA, the National Association for Fixed Annuities, and Executive Director Chip Anderson released the following statement in response to the U.S. Department of Labor’s issuance of its fiduciary duty rule:

WASHINGTON (Apr. 6, 2016) — “For the past year, NAFA has worked with fellow trade organizations to address deep concerns about the proposed Department of Labor fiduciary duty rule that stands to harm small businesses and hurt Americans’ access to the education and advice needed to prepare successfully for retirement.

“NAFA has tried to be a constructive voice in this important national dialogue. In addition to conducting our own research, we met with the Department, submitted two comment letters and hosted a Hill Walk for members to share their concerns to elected officials in Washington. More recently, we led a grassroots effort in support of bipartisan legislation that underscores our commitment to protecting consumers while at the same time avoiding unnecessary disruption to consumer retirement planning and savings.

“Upon initial review of the rule in its final form, it appears DOL has not addressed the very real concerns about the potential impact of this rule brought to light by thousands of individuals, from members of Congress and industry professionals to employers and American savers. We are disappointed that a political agenda seems to have taken precedence over guaranteeing low- and middle-income workers the ability to rely on the professionals and products, including fixed annuities, that can secure their future.

“NAFA is in the process of completing an in-depth analysis of the rule and its potential consequences in order to provide our members with direction and support as they attempt to navigate the conflicting requirements and inherent inconsistencies of this regulation. At the same time, we will continue to advocate for a legislative alternative that marries strong consumer protection with ongoing access to the advice retirees and pre-retirees so want and need.

“In the meantime, we ask that members of Congress from both sides of aisle come together to take action and protect their constituents. We must all recognize what is at stake, and do what is necessary to prevent a retirement crisis by eliminating any hurdles to helping Americans across the nation achieve financial security for their families.”

View the PDF HERE.

NAFA Announces the 2016 Board of Directors

The general membership of NAFA, the National Association for Fixed Annuities, approved recommendations for its newly elected 2016 board of directors at the association’s annual meeting held recently in Miami, Fla. Nominations were received from the membership at large, and candidates were thoroughly vetted by the current board before being announced in Miami. With all present at the meeting in favor of the new appointments, four new members and one re-elect actively began filling their roles effective January 1, 2016.