Washington, D.C.—American Council of Life Insurers’ (ACLI) President and CEO Susan Neely today commented on the “Regulation Best Interest” (Reg BI) adopted today by the Securities Exchange Commission (SEC).
“Reg BI strikes the right note -- arming people with the information they need to make good purchasing decisions while safeguarding their access to a broad selection of solutions to secure their retirement,” Neely said. “Protecting consumers does not mean limiting their choice of products and services.”
Neely said Reg BI’s principles-based approach is a more sensible and sustainable way to protect consumers than the Department of Labor’s fiduciary regulation that eliminated consumer choice and access to products and services essential to a secure retirement. According to the market research firm LIMRA, if the fiduciary regulation had not been vacated by a federal court in 2018, 54 percent of advisers might have dropped or turned away small investors, resulting in as many as 4 million middle-class Americans losing access to information they want and need.
Reg BI requires financial professionals, when making a recommendation, to act in the consumer’s best interest—with care, skill, prudence and diligence—based on the consumer’s needs and objectives. Broker-dealers must also manage, eliminate or mitigate conflicts of interest and disclose those conflicts of interest and the source of their compensation.
“Reg BI raises consumer protections to a new level,” Neely said. “It builds on current rules to ensure consumers receive professional financial guidance and information that is in their best interest. It’s a rule with real consequences for bad actors who put their own interests above their customers’ interests.”
Neely said the SEC process in reaching today’s conclusion was diligent and constructive on behalf of consumers. She also commended SEC Chairman Jay Clayton for saying today that the SEC will continue its collaboration with the National Association of Insurance Commissioners and the Labor Department on a harmonized and uniform standard of care for investment advice. “A collaborative approach would ensure all consumers receive financial information and guidance that is in their best interest, regardless of the products they purchase or where they live,” Neely said. The SEC rule is expected to be released in the coming days.
The American Council of Life Insurers (ACLI) advocates on behalf of 280 member companies dedicated to providing products and services that promote consumers’ financial and retirement security. 90 million American families depend on our members for life insurance, annuities, retirement plans, long-term care insurance, disability income insurance, reinsurance, dental and vision and other supplemental benefits. ACLI represents member companies in state, federal and international forums for public policy that supports the industry marketplace and the families that rely on life insurers’ products for peace of mind. ACLI members represent 95 percent of industry assets in the United States.
To learn more, visit acli.com and our blog, ACLI Perspectives, at acli.com/perspectives.
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