WASHINGTON BUREAU — Members of the H.R. 4173 financial services bill conference committee today began formal efforts to reconcile the House and Senate versions of the bill.
The committee started with an organizational session. A series of 6 substantive sessions is set to begin next week.
Democratic leaders in Congress hope to have a combined version of the bill ready for House floor action by June 29. They hope the Senate will debate the bill briefly, then approve it and send it to the White House before Independence Day.
Conferees will be deciding whether life insurance agents must abide by a fiduciary standard when selling products classified as investment products or whether they can continue to use the suitability standard.
A Treasury Department undersecretary said the administration wants a broad fiduciary standard rule in the final bill.
A fiduciary standard would require agents and broker-dealers to sell products to customers without having conflicts of interest.
The current suitability standard requires only that they verify that the products sold to consumers suit the needs of those consumers.
“The House passed bill includes significantly improved language on the standard of care issue, but it doesn’t go far enough in advancing our understanding on how the suitability standard governing broker-dealers and their registered representatives is applied and enforced relative to the fiduciary duty governing investment advisers,” says Thomas Currey, president of the National Association of Insurance and Investment Advisors, Falls Church, Va.
NAIFA prefers the Senate version, which calls for further study of the issue, Currey says.
Insurance companies are trying to fight provisions that could limit the ability of the holding companies and subsidiaries of depository institutions from engaging in “proprietary trading,” or trading in securities on their own behalf.
Life insurers want to make sure the provisions do not end up applying to life insurers.