InsuranceNewsNet shared insights from benefits and executive compensation partner Fred Reish during the LIMRA Virtual Annual Conference on how the Department of Labor (DOL) would likely revisit establishing a true fiduciary standard. The publication noted that the session occurred before the DOL announced a six-week delay of its Dec. 20 compliance deadline for the investment advice rule.
Reish described what the DOL is likely working on, stating, “Number one is to simplify the definition of fiduciary advice such that any recommendation of a financial product to a retirement account is fiduciary advice.”
Additionally, Reish explained that the DOL could regulate rollovers into individual retirement accounts (IRAs) but not the IRAs themselves. For now, the DOL is certain to build on the new prohibited transaction exemption 2020-02 included in the investment advice rule, Reish said.
“I think 84-24 will definitely be modified,” Reish continued. “There will be provisions of 2020-02 that will be moved over to it — probably the fiduciary acknowledgment, the best interest standard and maybe specific disclosures of reasonable compensation limitation. It will look a lot more like a fiduciary type rule than it does right now.”
Another thing to watch for is how the DOL ends up treating fixed indexed annuities, Reish added. “Fixed indexed annuities would be the one type of annuity most impacted by [rewriting 84-24],” he said.