WASHINGTON – American Council of Life Insurers (ACLI) President and CEO Susan Neely made the following comments on the Labor Department’s move to begin the process of proposing another fiduciary regulation by initiating a review at the Office of Management and Budget:
“The Labor Department must not adopt a fiduciary-only regulation like it did in 2016. First, most Americans cannot afford to engage a fiduciary investment adviser, who typically charge high, ongoing fees for their services.
“Second, the SEC and the states are positioned to address conflicts of interest, the Labor Department’s main focus. In less than 3 years, 40 states have safeguarded 70% of U.S. consumers seeking a secure retirement by implementing the best interest enhancements to the National Association of Insurance Commissioners (NAIC) Suitability in Annuity Transactions Model Regulation.
“These bipartisan measures also align with the SEC’s Regulation Best Interest (Reg BI) to provide consumers with strong state and federal protections. Combined, these actions have greatly enhanced the standards financial professionals must follow. And, they address the potential conflicts of interest the Labor Department attempted to address in 2016 without limiting access to annuities, the only financial product in the marketplace that can provide guaranteed income for life. When it vacated the 2016 fiduciary-only regulation, the 5th Circuit made clear that federal law does not support the Labor Department limiting consumer access to products and information.
“At a time when low and middle-income retirement savers need access to financial guidance and options for lifetime income, it would be a mistake to resurrect a fiduciary-only regulation that denied them both. In a recent Morning Consult survey, retirement savers overwhelmingly said they want the option to work with any type of financial professional who is offering products and services that meet their needs.
“We plan to conduct a thorough review of the proposal when it is released and assess the impact it would have on communities struggling to secure their retirements.”
The American Council of Life Insurers (ACLI) is the leading trade association driving public policy and advocacy on behalf of the life insurance industry. 90 million American families rely on the life insurance industry for financial protection and retirement security. ACLI’s member companies are dedicated to protecting consumers’ financial wellbeing through life insurance, annuities, retirement plans, long-term care insurance, disability income insurance, reinsurance, and dental, vision and other supplemental benefits. ACLI’s 280 member companies represent 94 percent of industry assets in the United States.
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