What Mike Bloomberg Is Saying About Insurance, for Agents

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.

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