NAIFA strongly supports consumer protections provided by the Securities and Exchange Commission’s (SEC’s) Regulation Best Interest and the National Association of Insurance Commissioners’ (NAIC’s) revised annuity model regulation (adopted by 19 states and counting). Both of these provisions require financial professionals to work in their clients’ best interests and preserve the ability of consumers to choose who they work with and how they compensate advisors. Reg BI and the NAIC model also avoid problems with other proposals that would have made it very difficult for producers to continue working with Main Street investors.
However, the SEC and NAIC protections have not satisfied everyone. Media reports indicate the Department of Labor may reintroduce a version of its fiduciary rule, which was previously struck down by a federal court after NAIFA and several of our advocacy partners, including the American Council of Life Insurers, filed suit. A pair of surveys by the North American Securities Administrators Association (NASAA) call into question the effectiveness of Reg BI and financial firms’ compliance with it.
A new report by Greenwald Research, an established expert in research and survey methodology, details numerous flaws in both of the NASAA surveys and concludes that “its findings and conclusions cannot be relied upon as accurate measures of firm behavior, compliance with Reg BI, the impact of the regulation, or the extent to which the interests of investors are well-served.”
NAIFA and a number of our coalition partners welcome this new report and will use it in ongoing discussions with policymakers. NAIFA believes Reg BI and the NAIC model, which are complimentary, provide strong consumer protections. They make additional standard-of-care regulations by the Department of Labor or state agencies unnecessary.