The Independent Insurance Agents & Brokers of America (IIABA) has praised action by the Trump administration to halt the implementation of a rule which it says would place “overly burdensome requirements” on its members.
The IIABA said in a release that it was grateful for Trump’s move to direct the Department of Labour (DOL) to re-review a fiduciary rule implemented by the Obama administration, which it described as ‘controversial’.
“The DOL rule places overly burdensome requirements on [IIABA] members who offer retirement advice, leaving many insurance agents and brokers struggling to find a way to effectively serve their clients moving forward,” Robert A. Rusbuldt, the association’s president & CEO, said in the release.
The fiduciary rule, which tightens conflict of interest rules under the Employee Retirement Income Security Act (ERISA) and requires insurance agents and brokers who give guidance about certain retirement investments to adhere to a fiduciary standard of care, was finalized in April 2016, but delayed until April 2017, in order to give the industry time to comply, the IIABA said.
Jennifer Webb, of the IIABA, told Insurance Business that the rule is “extremely complex,” consisting of over a thousand pages, and would present a significant challenge for members when it comes to compliance.
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“It’s difficult, especially for small businesses to comply with regulations that are maybe one-size-fits all when they don’t need to be,” Webb said.
The rule, which Webb said would affect life insurance products such as annuities, and any kind of insurance product with an investment component, would require a great deal of education – which is why it has already been subject to delays.
“Our major concern is that it would push the middle class out of being able to get individual investment advice, and we are seeing that happen,” Webb explained.
Charles Symington, the IIABA’s senior vice president of external and government affairs, said that while the association “does not necessarily oppose a best interest standard for insurance agents and brokers, the Obama Administration’s fiduciary rule is simply unworkable for many [IIABA] members and harmful to many consumers.”
In its release, the association added that it was looking forward to working with the Trump Administration and Congress as the DOL reviews the next steps pursuant to the President’s executive order.
