Michael Bloomberg — a former Republican who is now running for the Democratic presidential nomination — calls out agents, brokers and insurers several time in his new financial rules change policy proposal.
- A copy of Bloomberg’s financial rules change policy proposal is available here.
- A general article about Bloomberg’s financial rules change policy proposal is available here.
Sen. Bernie Sanders, a Vermont independent who is also running for the nomination, has expressed support for the fiduciary rule in the past.
Another contender, Sen. Elizabeth Warren, D-Mass., has expressed strong support for the U.S. Department of Labor’s original fiduciary rule and best interest standard in a public letter sent to Eugene Scalia, the current Labor secretary.
But the word “fiduciary” does not seem to appear on Sanders’ website, or on the websites of Joe Biden, Amy Klobuchar or Tom Steyer.
Pete Buttigieg proposes creating a public long-term care insurance program, and a new marketplace for private LTCI policies, but he does not appear to use the word “fiduciary” on his website.
Warren mentions the fiduciary rule on her campaign site only briefly.
“I will restore the Labor Department’s fiduciary rule that the Trump administration delayed and failed to defend in court, so that brokers can’t cheat workers out of their retirement savings,” Warren says on her site.
In that statement, Warren includes an embedded link to an explanation of what she’s talking about — an article about the death of the original fiduciary rule, posted on the Insurance Journal website, and written by Neil Weinberg, a reporter for the Bloomberg news service.
Bloomberg became a billionaire by founding Bloomberg L.P., the owner of an investment information data service and of the Bloomberg new service. His news service has run many articles about insurance regulation.
Here’s are three things Bloomberg says now about the fiduciary rule and insurance, in his new financial rules change proposal.
1. He wants to revive the Dodd-Frank Act provisions that could lead to more regulator attention to insurers’ finances.
“The Trump administration has been eroding safeguards designed to make the financial system a source of strength, rather than an agent of contagion,” according to Bloomberg’s new financial rules change proposal. “It has allowed the largest U.S. banks to operate with less equity, the loss-absorbing capital that helps them keep lending in hard times. It has weakened mechanisms — such as stress tests and living wills — designed to ensure that large financial institutions can weather a crisis or fail safely…. It has abandoned efforts to address risks arising outside the traditional banking system, at institutions such as insurance companies and non-bank mortgage lenders.”
Bloomberg will seek to “reinvigorate efforts to monitor and address risks arising outside the banking system, including by subjecting systemically important non-bank institutions — such as insurers — to added scrutiny and requirements,” according to the financial rules change proposal.
2. He wants to consider changing the insurance industry regulatory framework.
“The U.S. regulatory system is far too fragmented,” according to the Bloomberg financial rules change proposal. “At the federal level, 10 different entities are involved in overseeing financial markets and institutions — with ample conflicts, overlaps and blind spots. For example, four agencies regulate depository institutions, while none oversees insurers.”
To address that concern, Bloomberg aims to “create a bipartisan commission to recommend ways to make the U.S. financial regulatory system more efficient and effective,” according to the proposal. “Among the reform’s goals: prevent ‘venue-shopping’ by companies seeking lighter regulation, and reduce overlapping and confusing rules and jurisdictions.”
3. He wants to change the standards governing the sale of insurance.
“Investment professionals who work on commissions — such as brokers and insurance agents — often steer less sophisticated customers into expensive financial products and away from better, cheaper alternatives,” according to Bloomberg’s financial rule change proposal. “The extra fees add up to billions of dollars a year, money that would otherwise go toward ensuring retirees’ financial security. The Labor Department issued a rule requiring such investment advisers to disclose conflicts and put clients’ interests first. The Trump administration has reversed the rule.”
If Bloomberg becomes president, he will work to “restore the Labor Department’s fiduciary duty rule, requiring brokers and insurance agents to put their clients’ interests first,” according to the proposal.
— Read Warren Vows to Resurrect Obama-Era DOL Fiduciary Rule, on ThinkAdvisor.