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The silence at the Department of Labor is LOUD

nothing.  But, don’t think the silence means that victory is upon us – IT IS NOT! The news of the delay is a hopeful sign.  However, the lack of information and continued deafening silence creates more uncertainty and confusion.  As we blogged last week, there are many possible interpretations of what this means:

  1. DOL may be extending the June 9th versions of BICE and PTE 84-24 to July 1, 2019. This would mean the status quo remains in place for the next two years and additional requirements of BICE remain on hold;
  2. DOL could be proposing additional requirements during the interim period through July 1, 2019;
  3. DOL could be proposing changes to the BICE and PTE 84-24 exemptions to take effect on July 1, 2019;
  4. DOL and OMB may be putting the proposals out for comment which will cause more delay and uncertainty until the Department gets public input and makes final decisions.
WHAT IS CERTAIN, is that today the fiduciary rule itself is law and all qualified sales are subject to the impartial conduct standards. The FACC Campaign has a singular focus in all of this.  We believe DOL acted arbitrarily by grouping FIAs with security products under the BICE.  It is a painful reminder that our hard-fought victories on the 151a front and at the NAIC remain fragile and vulnerable to new bureaucratic assaults.  That is why the FACC Campaign has prepared a letter to Secretary Acosta highlighting this concern.  The letter states: “One particular concern in that regard is the treatment of FIAs which we believe should be moved back from BICE to PTE 84-24.  By returning FIAs to PTE 84-24, FIAs would be grouped properly with other fixed annuities rather than securities products, and would not be subject to ill-fitting BICE requirements that are oriented towards the securities industry’s framework and practices.  By the same token, sellers of fixed indexed annuities would still be subject to impartial conduct standards that embody the Rule’s principal protections.”    We are pleased to announce two stellar congressmen have already agreed to sponsor this letter – Republican Congressman Steven Stivers of Ohio and Democratic Congressman Emanuel Cleaver of Missouri.  We are actively seeking more congressional members on both sides of the aisle to sponsor the House letter.  We are working on a similar Senate letter too.  We must continue all-out efforts to educate regulators and legislators on why FIAs are not securities and make them appreciate that FIAs are fixed annuity products that provide unparalleled consumer value. Your engagement is critical to prevail on this this debate over treatment of FIAs.  Silence is not an option.  Visit our website at www.fixedannuitychoice.com and stay engaged! United We’ll Stand and CREATE SOME NOISE!]]>

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The Rumors of the DOL Rule's Death are Highly Exaggerated!

The Shot Heard Across the Nation… …last Wednesday was the sound of a DOL proposal to delay further implementation of the fiduciary-rule exemptions until July 2019.  The Department’s proposal to extend the Jan. 1 effective date for the remaining portions of the exemptions was first disclosed in documents released Wednesday in a court challenge Thrivent Financial for Lutherans v. Perez. Very limited information is currently available so nobody knows what DOL is proposing exactly – but the DOL Rule is hardly dead.  We only know DOL proposed to the Office of Management and Budget (OMB) that three exemptions be amended – including BICE and PTE 84-24 – and that the title of the amendment says “Extension of Transition Period and Delay of Applicability Dates from January 1, 2018 to July 1, 2019.” It is a hopeful sign for sure even though its meaning is a bit murky.  Most in the press and at trade associations are interpreting it to mean DOL will be extending the June 9th versions of the modified exemptions (BICE and PTE 84-24) to July 1, 2019.  That means the status quo would remain in place for almost two more years while DOL continues to study the exemptions.  It also means that during that period the additional requirements of BICE would remain on hold -which is the good news. However, there are other ways to read this.  It is also possible that DOL is proposing additional requirements during this interim period through July 1, 2019.  It is also possible DOL is proposing changes now to the exemptions that would take effect on July 1, 2019.  These latter scenarios seem less likely but nothing can be ruled out given our history with this issue. And on top of all of that, these amendments are over at OMB, which means at this stage they are merely proposals, whatever they are, and they could still change.  There is also word on the street that DOL may put its proposal for delay out for notice and comment.  This would mean the proposed delay would remain merely a proposal for a period of time until the Department gets public input and issues a final rule concerning delay. So . . . as usual . . . there are lots of unknowns.  What it really means is we cannot let our guard down.  Keep in mind the fiduciary rule itself is now law.  Keep in mind too that all annuity sales are currently subject to the impartial conduct standards.  The FACC Campaign is going to continue to monitor the situation, work on our push to get FIAs into PTE 84-24 (for whenever these requirements ultimately kick in), and continue to consider possible best practices under PTE 84-24 such as proper disclosure and documentation.

STAY TUNED!

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