National Underwriter's 2016 Rogues Gallery

Staunch opponents of the ACA exchange system might see Hesse as a heroine who helped show us what insurers really think about ACA programs, as opposed to what they say when they’re trying get the Obama administration to approve mergers and acquisitions.

Exchange saga watchers who were enjoying the old story arc now have to put up with watching the exchange show with a new cast of players. It’s as if a legal dispute forced the producers of the real “Game of Thrones” series to toss out the real actors and replace them with actors from a high school drama club. The show might still have some entertainment value, but it’s not quite the same thing.

2016 Rogue No. 5: John Heath

In the insurance business, clients trust their advisors to act in their best interest so the things most important to them in life — their families and their futures — are protected.

See also: 32 goals for insurance advisors in 2016

So it’s especially troublesome when news surfaces of unscrupulous advisors who take advantage of that trust to steal from clients and give the rest of the industry a black eye.

Such was the case with John Heath, an Edina, Minnesota-based financial advisor, who pleaded guilty earlier this year to stealing $220,000 from an elderly client. Not only did Heath take advantage of the trust his client of 20 years had placed in him, but he also preyed on that client during a particularly vulnerable season in the client’s life.

The client had been diagnosed with Alzheimer’s disease and subsequently suffered a stroke in 2013. It was during this period of diminished cognitive ability that Heath changed his client’s contact information on his annuity account to his own contact information and opened a checking account using the client’s social security number, birth date and driver’s license number, all of which he obtained in his role as the client’s advisor.

Shortly thereafter, Heath began withdrawing funds from his unsuspecting client’s annuity, which he had helped the client establish in 2008, and depositing those funds into the fake checking account, giving himself access to the stolen funds, which he used to pay bills and make purchases.

Wings Financial, the bank that Heath used to establish the fraudulent checking account, eventually became suspicious and froze the account. The bank worked with the Minnesota Department of Commerce Investigators and the Hennepin County Attorney’s office to investigate and eventually bring charges against Heath.

Heath was also the accused in a second case in which he was charged with stealing thousands of dollars from an 83-year-old woman. For his crimes, Heath agreed to a prison term of 41 months.

It’s unfortunate that the country’s new renewed focus on fiscal spending has taken so long. (Photo: iStock)

2016 Rogue No. 4: Congress

President-elect Donald Trump noted in his Nov. 9 victory speech that he planned to invest in infrastructure to accelerate the economic growth and provide work for unemployed workers, millions of them key middle market prospects for agents and advisors.

It’s unfortunate that the new renewed focus on fiscal spending has taken so long. For the delay, Congress bears much of the blame. Passage of the $787 billion American Recovery and Reinvestment Act in 2009 was too much little to compensate for the loss of jobs caused by credit crisis.

See also: Coalition urges Trump not to dump DOL’s fiduciary rule

The administration would have gotten a far stronger package where it for not compromises with key legislators, on both spending and tax cuts, that Obama needed to make to get the legislation enacted. Still, the bill was a positive step on the road to recovery.

The real issue is that little has been done in the way of additional spending since the Recovery Act to further to jolt the economy and attack two intertwined issues:

1. 1. 1. 1. Underemployment, and
         2. Wages that have failed to keep pace with inflation.

Congress has not felt compelled to act.

If key lawmakers on Capitol Hill had shown a greater willingness to work with the administration in spearheading a follow-up stimulus package — one that would have more than compensated for the loss of good-paying jobs in key sectors over the past decade — then Americans would have been spared the financial misery and suffering so much on display during the 2016 presidential campaign.

And agents and advisors catering to the middle market would have had millions more prospects — people in need of insurance and financial planning — with money to set aside for more than just daily expenses. As President-elect Trump prepares to take office, perhaps the long-standing spending shortfall will finally be remedied.

Federal Reserve Chair Janet Yellen testifies on Capitol Hill in Washington, Thursday, Nov. 17, 2016, before the Joint Economic Committee. Yellen sketched a picture of an improving U.S. economy and said “the case for an increase” in interest rates has strengthened. The Fed is widely expected to raise rates when it meets in mid-December. (AP Photo/Susan Walsh)

2016 Rogue No. 3: Janet Yellen

Though Forbes described Janet Yellen as the “world’s top market mover” in its 2016 ranking of the world’s most powerful women (she placed third), Yellen has done little to move anything for the insurance industry. In December 2015, she raised interest rates a mere 25 basis points — the first interest rate hike since 2006. But 25 basis points will hardly help life insurers, whose return on investments have been close to zero for close to a decade. But it’s not only life insurers suffering. The low interest rate environment has hurt ordinary retirees, pension funds, issuers of annuity products that offer any kinds of guarantees, issuers of long-term disability insurance, and issuers of long-term care insurance.

See also: Insurance regulators respond to ongoing low interest rates

Low interest rates aren’t solely to blame for insurers’ woes. Yet, life insurers and the analysts that track their financials consistently cite low interest rates as the chief macroeconomic threat to the businesses. And so Fed Chairwoman Yellen has consistently drawn the industry’s ire.

Yellen has continued the practice of helping the free-money individuals keep the party going for the richest 1 percent, while not doing much of anything to get any of the free money flowing to the people who are trying to prepare for the future.

As Bloomberg recently reported, “Fed Chair Janet Yellen appears to be more inclined to let the economy run a little hot than to increase rates quickly.” It is just this reason that Yellen has earned her third consecutive spot on our annual list of rogues.

President-elect Donald Trump and Vice President-elect Mike Pence have promised a tsunami of legislation in their first 100 days. (Photo: AP Images)

2016 Rogue No. 2: Donald Trump 

When Donald Trump won the presidential election Nov. 8, he became the United States’ chief financial services and health policy rogue-elect, because that comes with the job description.

See also: Replacing Obamacare will be a slog, not a race

He ran on a platform based partly on the idea of quickly eliminating Affordable Care Act rules and programs that at least half of the people in the country think they like, and on the idea that insurance companies and pharmaceutical companies are some of the entities manipulating the government to make life harder for ordinary people.

Once he gets into office, he’s likely to infuriate opponents by making some health policy changes they hate, and to disappoint supporters by failing to make changes they like, either because he runs into opposition in Congress or in the courts, or because he learns more about the nuts and bolts of the issues and changes his mind about what he wants. In the short-term, at least, he can’t win.

He’s also a rogue because he colluded with Hillary Clinton (who have been the rogue on this slot if she had won) to make Medicare solvency a footnote issue during the campaign. Of course, both candidates mentioned the issue. But they could have made it a highlight, and gotten voters seriously interested in a matter of grave concern to every American.

Instead, the candidates gave the voters what the voters told pollsters they wanted, which, in the area of domestic policy, was discussion of other interesting issues that are certainly important but which are mostly not as enormous as the Medicare solvency problem.

See also: Financial planners play therapist to paralyzed liberals

Someday soon, public officials will have to get brave and get us to think hard about Medicare solvency, or the laws of economic gravity will make the Medicare program change decisions for us.

The Frances Perkins Building is located at 200 Constitution Avenue, N.W., in Washington, D.C. and serves as headquarters of the United States Department of Labor. (Photo: Wikipedia Commons)

2016 Rogue No. 1: The Department of Labor

Five words struck fear into the hearts of advisors in 2016: Department of Labor fiduciary rule. Many called the rule the most impactful thing to happen to the industry in decades… and not in a good way.

The 1,000-page document that makes up the fiduciary rule outlines conflict-of-interest rules surrounding a myriad of financial and retirement transactions. Standing doggedly behind the rule from the moment he joined the Labor Department in 2013 when the rule was still being crafted was Labor Secretary Thomas Perez. He vowed to produce a final fiduciary rule and made good on his promise in April of this year. In the face of industry criticism and eventually lawsuits against the final rule, Perez has stood firm in his belief that the rule will ultimately be upheld in court.

The final fiduciary rule was especially egregious to the fixed indexed annuity sector, which felt blindsided by a last-minute shift of FIAs to the Best Interest Contract Exemption rather than the Prohibited Transaction Exemption 84-24, under which they were expected to be governed in preliminary drafts of the fiduciary rule. Opponents say the industry was given inadequate opportunity to comment on the change.

In addition to creating a lofty compliance burden, the rule also is expected by many to limit advice to smaller investors, open advisors up to lawsuits and ultimately cause many advisors to walk away from the business rather than attempt to navigate the effects of the rule.

With a changing of the guard in the White House and likely the Labor Department in 2017, however, the fate of the rule and the impact on the industry is increasingly unclear.

See also:

Trump could spell trouble for the Fed

How HHS secretary contender Tom Price might replace the ACA

The heart of U.S. economy is weaker than it looks

We’re on Facebook, are you?