With the Department of Labor’s finalized amendment regarding the regulations on fiduciary responsibility for retirement products — including annuities, life insurance and other life products — it’s timely to take a look at the compliance implications for carriers, distributors, agents and advisors.
Over the past 18 months, the retirement industry has been attempting to gain a complete understanding of the U.S. Department of Labor’s foray into regulating the sale of insurance products. The major trade association that works with the retirement industry is the Securities Industry and Financial Markets Association (SIFMA), which has been instrumental in working with the industry to get the federal Department of Labor (DOL) to understand the effects of the DOL’s proposed fiduciary and responsibility regulations.
While retirement products and services have both been the object of regulation, the DOL created a regulatory concept that neither the states nor the Securities and Exchange Commission (SEC) have broached: The “Best Interest” rule. Today the DOL provided some clarification about the “best interest rule” and it seems like an Emily Litella moment of “oh, never mind.” What the DOL announced today appears to bring some of the draconian possibilities of the rule down to a more realistic viewpoint.