The U.S. House of Representatives is currently considering introduction of the Protecting the Right to Organize Act (PRO Act) along mostly party lines, likely in April 2021. This wide-reaching bill seeks to reform current labor law in a variety of areas. Impacting the insurance industry, the bill amends the National Labor Relations Act (29 U.S.C. 152(3)) by adding language that expands the definition of “independent contractor” by adopting an “ABC” test to define who is an “employee.”
The PRO Act redefines the relationship shared between insurance producers, independent broker-dealers (IBDs), and independent financial advisors (IFAs) with the insurance industry. This relationship ensures consumers have the greatest access to products being offered by the insurance industry. Creating a new standard that does not exempt these vital individuals from the PRO Act’s ABC test severely limits the scope of insurance products consumers would have access to as well as general distribution of insurance products and investment advice, thereby limiting consumers' ability to protect themselves and their loved ones.
To contact your legislator asking to protect your ability to best serve your clients’ needs, please click HERE.
You can also participate in a survey that will help NAIFA gather your concerns about the PRO Act by clicking HERE.
Additionally, the Department of Labor (DOL) published the NAIFA supported “Independent Contractor Status Under the Fair Labor Standards Act” rule on January 7, 2021. The rule is currently scheduled to be effective on March 8, 2021. However, in accordance with the memorandum of January 20, 2021, from the Assistant to the President and Chief of Staff, titled “Regulatory Freeze Pending Review,” the Department has proposed to delay the rule’s effective date to May 7, 2021. On February 23, NAIFA submitted comments to DOL in support of allowing the rule to take effect.