NAFA Fights to Protect Your Business

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Message from NAFA

First and foremost, I’d like to thank the industry for the warm welcome I received as I assumed the post of Executive Director at NAFA on May 1. Working with NAFA over the past 15+ years, I know all too well how critical it is to have a clear voice protecting and raising awareness for fixed annuities. An oft-misunderstood product, fixed annuities clearly play a significant role in helping everyday Americans plan for retirement and beyond. Unfortunately, as many of you have likely heard, in mid-April, the U.S. Department of Labor (DOL) released their proposed “best interest” fiduciary duty rule. The big question is – Are you fully aware of how it could impact annuity producers, their practices and their level of responsibility and what this could mean for carriers and IMOs?

Due to widespread concern regarding the revamped proposed fiduciary rule, NAFA is speaking out. At NAFA, we firmly believe the DOL’s proposal will create a sweeping and unworkable regulatory landscape that will adversely impact middle-class consumers and small businesses.

NAFA Urges Constructive Revisions to Proposal DOL ‘Best Interest Standard’

While we appreciate the time and effort the DOL has put into re-drafting the fiduciary duty proposal, we want to express deep concerns about its implications. Given that the proposed rule would require a ‘best interest standard’ across a broad range of retirement advice, it would force many insurance and financial professionals to assume the role of fiduciary.

Under this new standard, professionals, who have dedicated their lives to helping consumers achieve their financial goals, retire with confidence, and comfortably take care of their families, would face compliance and liability burdens that may force them to close their practices or cater only to clients with a higher net worth, all of which is anything but in the best interest of consumers.

What is NAFA Doing to Combat the Proposed Rule?

In an effort to protect the livelihood of our members and the financial future of everyday Americans, we will submit a comment to the DOL during its 90-day open comment period.

We are working closely with our fellow trade organizations and industry colleagues to provide clear direction on how best to proceed, including a full and thorough review and analysis of the major provisions of the proposed rule. The review encompasses the “best interest contract exemption,” as well as the conflicts a rule of this magnitude will potentially create within our regulatory landscape. A broad one-size-fits-all new fiduciary rule completely contradicts existing successful and robust regulatory framework provided by the NAIC Suitability in Annuity Transactions Model Regulation for fixed annuity sales as evidenced by record-low complaints and high client satisfaction.

We sincerely hope the DOL is open to constructive revisions to its proposals because, beyond the sentiments expressed above, we are deeply concerned that, as currently drafted, the proposal will result in duplicative and inconsistent regulatory oversight, thereby paralyzing many retirement professionals while limiting choice and access to products Americans need to secure their retirement future.

What Can You Do to Get Involved?

Thanks to those of you who joined us in Washington, D.C. for our annual Annuity Leadership Forum June 17-19, 2015. Attendees had numerous, successful meetings with their Congressional Representatives and Senators during the Hill Walk in which they expressed their concerns about the unnecessary oversight of the proposed DOL and its unintended harmful consequences.

The Annuity Leadership Forum was such an exceptional opportunity to connect with fixed annuity leaders and decision makers from around the country on everything from tax policy and the future of annuity taxation, longevity annuities, methods to increase fixed annuity sales and how to best  capitalize on market changes. A very special thanks to our top-notch speakers!

The October 2015 Annuity Distribution Summit (formerly the IMO Summit), in its 7th year, will focus on
the unique issues facing insurance marketing organizations and will assemble the largest gathering
of principals and executives in the fixed annuity industry. This exclusive conference will be held at historically renowned, The Biltmore, which will surely serve as an extraordinary setting for this significant event!  The Annuity Distribution Summit will be your chance to come together with other prominent professionals to discuss the key issues that are essential to you and the future of your business. You will also have access to cutting-edge information and insights from accomplished experts in the marketplace.

We look forward to seeing you in Florida!
October 14-17, 2015
The Biltmore
Coral Gables, FL

On behalf of NAFA, we thank you for your continued support.

Charles R. “Chip” Anderson

Executive Director, NAFA

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