Life groups are praising two Republican lawmakers’ effort to replace the U.S. Department of Labor fiduciary rule regulations with a new, statutory sales and marketing standard.

(Related: Bill to Repeal DOL Fiduciary Rule Passes House Panel )

The American Council of Life Insurers (ACLI) and the Insured Retirement Institute (IRI) have put out statements supporting H.R. 2823, the “Affordable Retirement Advice for Savers Act” bill.

H.R. 2823

H.R. 2823 was introduced by Rep. David Roe, R-Tenn., and Rep. Roskam, R-Peter Roskam, R-Ill.

The bill would repeal the DOL’s fiduciary rule rulemaking. The bill would replace that rulemaking with new investment advice provisions in the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code of 1986.

H.R. 2823 would require retirement investment advisors to give clients advice that is in the best interest of the clients. Sellers and providers of general information could, however, use disclaimers to avoid responsibility for providing anything officially classified as personalized investment advice.

Retirement plan service providers could use disclaimers to avoid assuming fiduciary responsibility for a retirement plan, if the plan is represented by an independent plan fiduciary that was separate from the service providers, and if the fiduciary acknowledges that the service provider has a financial interest in completing plan transactions.

The bill is a potential alternative to a DOL rule replacement discussion draft released by Rep. Ann Wagner, R-Mo. The ACLI is also supporting that proposal.

The Process

Roe and Roskam introduced the bill in June.

House leaders assigned jurisdiction to the House Education and the Workforce Committee and the House Ways and Means Committee.

The bill has 29 Republican cosponsors and no Democratic cosponsors.

Rep. Bobby Scott, D-Va. (Photo: Scott)

Rep. Bobby Scott, D-Va. (Photo: Scott)

The House Education and Workforce Committee approved an amended version of the bill, provided by Roe, at a markup held Wednesday. The committee approved the amended version on a straight party-line vote. The committee also rejected an alternative version, introduced by Rep. Alma Adams, D-N.C., with a straight party-line vote. The Adams version of the bill would make the current DOL fiduciary rule and related rulemaking federal law.

Links to copies of markup documents and a video of the markup are available here.

ACLI and IRI

Dirk Kempthorne, president of the ACLI, said in his statement that the current DOL standard hurts consumers’ ability to plan for retirement, by limiting savers’ access to information about products such as annuities.

H.R. 2823 “would ensure Americans receive financial advice that is in their best interest while also maintaining access to the financial products and services they want and need,” Kempthorne said.

Cathy Weatherford, president of the Insured Retirement Institute, a group for providers of annuities and other insurance-based retirement savings arrangements, also welcomed the bill.

H.R. 2823 “will overturn the ill-advised Department of Labor fiduciary rule, protect access to high-quality, affordable retirement advice, require financial advisors to serve their client’s best interests, and enhance transparency and accountability through clear, simple and relevant disclosure requirements,” Weatherford said.

Democrats’ Response

Rep. Bobby Scott, D-Va., the highest-ranking Democrat on the House Education and the Workforce Committee, says in a statement that H.R. 2823 would replace the current fiduciary rule with a “far weaker, loophole-ridden standard that unscrupulous advisors could easily skirt by simply issuing boilerplate written disclaimers or disclosures.”

Democrats on the House Education and the Workforce Committee “believe disclosures and disclaimers are no substitute for a meaningful, enforceable fiduciary standard,” Scott says.

Research shows consumers given disclosures are more likely to believe their advisors are acting in their best interest than if the consumers had not received any disclosures, Scott says.

— Read What’s Next for the DOL Fiduciary Rule? on ThinkAdvisor.