This afternoon, the National Conference of Insurance Legislators (NCOIL) adopted a NAIFA-backed resolution that opposes potential fiduciary rulemaking by the Department of Labor (DOL).
NAIFA's State Government Relations Manager, Bianca Weiss, provided testimony on behalf of the entire association which comprises 50 state chapters and also serves as the advocacy arm for several other associations.
Weiss' testimony follows:
"NAIFA is proud to have collaborated with NCOIL to draft this Resolution opposing potential fiduciary rulemaking by the US Department of Labor. 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 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. 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.
NAIFA applauds Rep. Carl Anderson for spearheading and sponsoring this Resolution and urges NCOIL to adopt. We are looking forward to continuing efforts to ensure the DOL refrains from further rulemaking to revive or enact a burdensome fiduciary standard."
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.
