In day two of the Department of Labor’s (DOL’s) public hearing on its current fiduciary rule package, NAFA showed up prepared to do battle. NAFA President and CEO Chuck DiVencenzo was accompanied by Pam Heinrich, NAFA Director of Government Affairs and General Counsel, and Tom Roberts of Groom Law Group as they outlined several key flaws of this onerous regulatory package, highlighting the potential damage it could do to everyday retirement savers working with licensed insurance professionals to help secure their future.
“… The Department has singled out fixed index annuities for special criticism that is exceedingly misinformed, reflecting a fundamental misunderstanding of what these products accomplish for consumers. The announcement of the proposed rule included an outrageous characterization of the many diligent members of our industry who make available products that American workers demand to enhance their financial security, particularly in their golden years,” DiVencenzo opened.
DiVencenzo went on to highlight that the expanded scope of the proposal cannot be reconciled with the Fifth Circuit Court’s Chamber of Commerce decision and that it should be withdrawn in its entirety. He also homed in on the preamble’s “junk analysis,” suggesting its contents are “based on selective pieces of outdated academic research and back-of-the-envelope calculations intended to justify a pre-determined conclusion” before opening up further analysis from Heinrich.
Heinrich used her testimony to remind the DOL of the extensive work the National Association of Insurance Commissioners and its working group put into gathering input from stakeholders to craft its best insurance model regulation that is now adopted or in the process of being adopted by 47 states.
“… The NAIC got it right. Its best interest model establishes high standards for the responsible sale of annuity products by trained insurance professionals, subject to oversight by state insurance departments,” Heinrich explained.
The testimony delivered sparked numerous questions from regulators from the Employee Benefits Security Administration, which NAFA navigated by underscoring the clear distinctions between fiduciary advice and singular insurance transactions.