Advocacy in action blog

The New York chapter of the National Association of Insurance and Financial Advisors (NAIFA) has reached an agreement with Greenberg Traurig under which the firm will represent the advocacy interests of NAIFA-New York with state legislators and regulators. Greenberg Traurig is a global law firm with offices around the country, including in Albany and New York City.

As we posted earlier, agreement has come together at the final hour on the much-anticipated COVID-19 relief and government-funding legislation. The 5,593-page legislation is expected to be signed by President Trump today.

Congress has passed the final COVID-19 relief package of 2020 to support the economy and provide further relief during the continuing pandemic. Included within the 5,593-page bill is a provision to end surprise medical billing. The surprise medical billing language provides no government rate setting. The inclusion of this provision is arguably the most important patient-protection inclusion since the creation of Medicare Part D. NAIFA worked with congressional leaders in both the Senate and House, advising legislators of the importance of including surprise medical billing in the final bill.

The U.S. Department of Labor (DOL) has finalized its new prohibited transaction exemption (PTE) for financial professionals who provide retirement plan advice. The PTE requires advisors to work in the best interests of their clients, receive reasonable compensation, and make no “materially misleading statements.” The PTE is effective 60 days after publication in the Federal Register.

The DOL exemption aligns with the Securities and Exchange Commission’s Regulation Best Interest, and preserves opportunities and choices for workers and retirees seeking high-quality, personalized advice.

“NAIFA thinks the Department of Labor proposal – with the modifications in today’s final rule – will benefit retirement investors by preserving access to a wide variety investment advice professionals, products, and compensation arrangements,” said NAIFA CEO Kevin Mayeux. “The Department has struck the right balance between crafting a PTE with robust compliance obligations that serve the interests of investors, while avoiding an overly prescriptive approach or penalizing certain market segments or arrangements versus others.”

The DOL under the Obama administration initially issued a rule that would have imposed a restrictive fiduciary duty on financial professionals and hindered access of middle-market investors to retirement services and advice. NAIFA was among the organizations that filed a lawsuit resulting in the U.S. Court of Appeals for the Fifth Circuit vacating the rule in 2018.

The National Association of Insurance Commissioners’ Executive Committee adopted an amendment to the NAIC Unfair Trade Practices Act that would liberalize the existing restrictions contained in the Model Act’s anti-rebating provisions.

The adopted language allows insurers or producers to "offer or give non-cash gifts, items, or services, including meals to or charitable donations on behalf of a customer, in connection with the marketing, sale, purchase, or retention of contracts of insurance." The revised language provides that offering or providing products or services that will help mitigate risk or loss will not be considered impermissible rebates.

NAIFA commented on the revisions to the UTPA in a letter sent in July to the NAIC’s Innovation and Technology (EX) Task Force.

NAIFA commended the NAIC for undertaking a review of the current UTPA provisions that deal with rebating, with an eye towards modernizing the model in recognition of technological and risk/loss mitigation advances that have occurred in recent years.

“Basically, recent technology advances generally referred to as ‘insuretech’ have resulted in the development of products that will aid in risk and loss mitigation,” said Gary Sanders, NAIFA’s Counsel and VP. “Things such as Fitbits and monitors that will tell you that your water heat is leaking, etc. can help reduce risks for consumers and losses for insurers.”

In general, NAIFA supports the approach taken in the draft as well as the scope of the proposed expansion of the types of practices, products and/or services that would not be considered an impermissible rebate.

The amendments also allow each state commissioner to impose a cap on the dollar amount of gift, meals and similar items that can be provided without running afoul of the anti-rebate laws.

Christopher L. Gandy, a member of the 2021 National Association of Insurance and Financial Advisors (NAIFA) Board of Trustees and the president of NAIFA’s Chicagoland chapter, spoke on behalf of NAIFA at a National Association of Insurance Commissioners (NAIC) meeting of the NAIC’s Special Committee on Race and Insurance.

State lawmakers across the country are grappling with different solutions to quell business owners’ fears of legal liability as the pandemic threatens to loom for many months yet to come. NAIFA is encouraging lawmakers to pass bills that would enact liability immunity for businesses to protect them from a barrage of civil lawsuits related to the exposure to COVID-19.

NAIFA-Delaware and the American Council of Life Insurers (ACLI) have commended Delaware Insurance Commissioner Trinidad Navarro for proposing a best interest annuity rule based on the National Association of Insurance Commissioners’ (NAIC’s) revised Suitability in Annuity Transactions Model Regulation.

In an effort to streamline processes and implement uniform transactions for both licensees and consumers, the Massachusetts Division of Insurance recently announced it has entered into the National Association of Insurance Commissioners (NAIC) Continuing Education Reciprocity (CER) Agreement.

NAIFA has joined with other groups and employers who sponsor health insurance benefits for tens of millions of Americans to send a letter to congressional leadership urging Congress to enact legislation to reduce health care costs.