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NAFA Meets with Senior Administration Officials on Qualified Longevity Annuity Contract Proposed Rule
In August, NAFA’s President and CEO, Kim O’Brien, along with NAFA’s D.C. lobbyists CapCity Advocates, met with senior officials from the Treasury and the IRS to discuss their proposed longevity annuity rule. The proposed rule would modify the required minimum distribution rules to facilitate the purchase of deferred annuities that begin at an advanced age. These modifications would apply to certain contracts, termed “qualifying longevity annuity contracts” (QLACs), which meet specified requirements.  Unfortunately, the proposed QLAC definition would exclude an “equity-indexed contract or similar contract.”  During the meeting, NAFA explained the structure and benefits of FIA’s and how these essential products clearly fit within the goals of the Administration to provide guaranteed income for consumers later in retirement. NAFA believes the meeting went well and the Administration officials appreciated our comments. The timing of the final rule is unclear, but it is safe to assume a final rule will not be published until after the November elections.

NAFA Files CFPB Comments
During August, NAFA submitted comments in response to the Consumer Financial Protection Bureau’s request for information on consumer financial products and services, financial literacy efforts, and fraudulent or deceptive practices impacting the lives of older Americans and their families. The comment letter provided information about NAFA’s working group on the use of senior-specific designations in annuity sales, the launch of the Society for Annuity Facts & Education (SAFE), the NAIC Buyer’s Guide to Fixed Deferred Annuities, and the 2010 NAIC Suitability in Annuity Transactions Model Regulation.

Tax Reform
As expected, Congress left DC to campaign, punting on controversial action on the so-called “fiscal cliff” and debt ceiling, waiting until after the November election. It is impossible to know what may or may not occur at the end of the year on a tax reform package, but NAFA will be actively monitoring all proposals that would affect the taxation of fixed annuities or qualified or non-qualified account rules, as Congress looks for revenue sources. It is clear though; at some point later this year or next, a major tax reform package will likely start to move.

DOL Proposed Fiduciary Rule Stalled
NAFA continues to monitor DOL for any movement on a revised fiduciary standard rule that would cover employer retirement plans and IRA’s. Hill sources confirm that DOL Assistant Secretary Borzi still feels strongly about fiduciary standards, but election politics has slowed further action. Depending on the outcome of the elections in November, it is possible a new proposed rule could be released before the end of the year. If a new rule is released for comment, NAFA will continue to seek a workable seller’s exception that would cover IRA’s and include fixed annuity products.

SEC Fiduciary Standards
NAFA continues monitoring any SEC actions to impose uniform fiduciary standards on broker-dealers and investment advisors. An SEC staff report last year recommended the creation of such a uniform standard, and we anticipate SEC will use the authority granted under Section 913 of the Dodd Frank Act to propose a rule possibly by next year. However, the SEC has received extensive political pressure to first conduct cost benefit analysis, and thus, it will first publish a request for information prior to any proposed rule. Clearly, when this occurs, it will signal the start of new heated policy debate where NAFA will need all of its members engaged.

Federal Insurance Office
The new Federal Insurance Office (FIO) created by the Dodd-Frank Act still has not released its overdue report on how the current system of insurance regulation might be modernized and improved.  Once released, NAFA will review the report and respond as needed.


NAFA, the National Association for Fixed Annuities, is a national trade association exclusively dedicated to promoting the awareness and understanding of fixed annuities. NAFA is the only association whose sole purpose is advocating for the fixed annuity product.

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