Life insurance groups are wondering whether the U.S. Department of Labor will put off enforcing the current version of the fiduciary rule, then come back with new regulations that continue what the groups see as an attack on commission-based life insurance and annuity product distribution efforts.
James Szostek and Howard Bard told the DOL, on behalf of the American Council of Life Insurers, to get away from the idea of favoring certain types of retirement services, or certain types of retirement services compensation arrangements.
“Exemptive relief should be available regardless of whether the compensation earned follows a recommendation regarding an annuity, a share of stock, a bond, a bank CD or mutual fund and regardless of whether the fiduciary provides services on a fee-for-service or commission basis,” the Szostek and Bard write in a comment letter.
The DOL’s “clear bias against particular products and its preference for the fee-for-service advice model over a commission-based model” conflicts with the Trump administration’s view that Americans should be trusted to decide what’s best for them, the ACLI representatives write.
Paul Dougherty, president of the National Association of Insurance and Financial Advisors, blasted a Consumer Federation of America proposal calling for the DOL to give favorable treatment to companies that have already shifted toward fee-based pricing.
“Such an approach would amount to the department picking winners and losers among firms based on a highly ambiguous and biased ‘standard,’” Dougherty writes in a NAIFA a comment letter.
Prohibited Transaction Exemption (PTE) Delays
Representatives from ACLI and NAIFA talk about bias against sales commissions in comment letters sent to the Employee Benefits Security Administration.