In “‘Best Interest’ May Morph Toward Obama Fiduciary Rule, Industry Frets,” Life Annuity Specialist turned to benefits and executive compensation partner Brad Campbell for insight on new Department of Labor (DOL) guidance that suggests more adjustments to its best interest rule. “They’ve now said they’re going to do something; we just don’t know what,” he said.
It was initially surprising that the rule was allowed to stand since it was introduced under Donald Trump, according to Campbell. “Now, it’s much more clear why they did that because it’s a base that they’re building on,” he said.
Campbell explained that what’s problematic about the new rule is that it’s reminiscent of a predecessor that was introduced during the Obama administration and later struck down in 2018 after a federal court said the DOL had overreached in its authority.
The guidance released this month borrows some ideas almost verbatim from the Obama-era rule, such as where it discusses compensation structure, Campbell noted. “In many respects, it’s 2016 all over again,” he said.
Campbell feels that the regulation doesn’t “comfortably fit” with independent distribution by independent agents. The insurance industry needs to talk to the DOL about why annuities and insurance contracts should have a separate set of conditions, he said.
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