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June 09, 2016 at 08:57 AM
Lawsuits against the Department of Labor’s rule amending the definition of fiduciary on retirement advice are mounting.
The fourth and fifth legal challenges to the rule were filed Thursday by the Indexed Annuity Leadership Council as well as Market Synergy Group in Kansas.
IALC, comprised of life insurers, filed its lawsuit against DOL in the U.S. District Court for the Northern District of Texas, the same venue where lawsuits were filed Wednesday by the American Council of Life Insurers and the National Association of Insurance and Financial Advisors and on June 2 by nine plaintiffs.
Jim Poolman, IALC’s executive director, stated that while the group’s litigation is “not disputing that retirement advisors should act in the best interests of their clients,” DOL’s rule “will harm millions of hard-working Americans who need the principal protection and lifetime guaranteed income that fixed indexed annuities offer.”
The final DOL regulation “unfairly targets certain types of fixed annuity products, making it harder for Americans to purchase fixed indexed annuities when it is in their best interest to do so,” he said, adding that “this legal challenge is necessary because the rule creates an unworkable standard for independent agents and insurance companies and goes far beyond DOL’s authority.”
Market Synergy’s complaint, filed in the U.S. District Court for the District of Kansas, challenges only the Department’s conduct in adopting the revisions to PTE 84-24, “which contradicted the revisions announced in the Department’s notice of proposed rulemaking.”
The complaint states that in promulgating the final revisions to PTE 84-24, which make the exemption available to “fixed rate annuities,” as defined by DOL, but not to one class of fixed annuities – specifically, “fixed indexed annuities” – the Department “acted without providing adequate notice and an opportunity for comment, reflecting arbitrary and capricious conduct in excess of its statutory authority and in clear violation of its obligations to make necessary findings under applicable law.”
