On July 21, the National Conference of Insurance Legislators (NCOIL) adopted a NAIFA-backed resolution to oppose any new fiduciary rule from the U.S. Department of Labor (DOL). The decision came in part as a result of NAIFA testimony highlighting why no change to current fiduciary rules is necessary.
NCOIL joins 40 of the 50 States in opposing changes to the current fiduciary rules, reports Bianca Weiss, NAIFA State Government Relations Manager. She testified before NCOIL on the resolution, and collaborated with NCOIL in drafting it.
Weiss told NCOIL, " NAIFA supports a standard of care for securities and investments that both adequately protects consumers and preserves the ability of lower and mid-market investors to access affordable professional advice. NAIFA believes that a broad fiduciary approach could adversely impact this group from accessing investment products, advice, and services and fails to recognize the inherent differences between the investment adviser and broker-dealer business models.
“Financial protection should not limit financial security options. NAIFA encourages regulators and policymakers to support the Best Interest standard to significantly enhance consumer protections without making financial products inaccessible for working-class Americans.
“Since the DOL first began its fiduciary regulatory project, the consumer protection landscape in the United States has changed significantly. The first significant development was the 2019 promulgation of a rule by the Securities and Exchange Commission (SEC) referred to as Regulation Best Interest or Reg BI. This rule provides strong protections to consumers who engage as registered representatives of broker-dealers on a commission basis to purchase products considered to be securities.
“The states are now adopting similar rules for insurance agents who recommend annuities based on amended Model Regulation #275 adopted by the National Association of Insurance Commissioners (NAIC). To date, 40 states have adopted this rule or a similar version.
“NAIFA actively participated in the SEC and NAIC deliberations to require financial professionals to work in the best interests of their clients without limiting consumer choice or creating barriers that could prevent all Americans from accessing needed financial products, services, and advice.
“The SEC’s Reg BI and the NAIC Model protect our members’ clients and all American consumers from potential conflicts of interest in these situations without returning to the failed DOL fiduciary-only policy.”
Prospects: NAIFA continues to work at the state, interstate, and federal levels day in and day out to protect the businesses of our financial advisors and agent members, as well as to protect Main Street American individuals, families, and small businesses. If you know a professional in financial services that is not a part of NAIFA, we urge you to share this article and encourage them to explore why belonging to NAIFA is good for not only their own practice but critical for a strong and stable American economy.
NAIFA Staff Contacts: Diane Boyle – Senior Vice President – Government Relations, at DBoyle@naifa.org; or Bianca Weiss, Manager – State Government Relations, at bweiss@naifa.org; or Michael Hedge – Senior Director – Government Relations, at mhedge@naifa.org; or Jayne Fitzgerald – Director – Government Relations, at jfitzgerald@naifa.org.