If you have any kind of
footing in the financial services industry, then you probably know that the
Department of Labor’s fiduciary rule has been a hot topic for quite a while.
You are also likely aware that a recent ruling by the 5th Circuit Court of
Appeals struck down the rule and vacated its provisions. Attempts were made to
revive the litigation, but in May, 2018, the Court denied motions by three
states to defend the law. This all but puts an end to the force and effect of
the rule.
The Department of Labor (DOL) fiduciary rule was created under the Obama
administration and scheduled to take full effect by January 1, 2018. The rule
greatly expanded the definition of retirement plan investment advice that would
trigger fiduciary duties under ERISA and require retirement plan advisors to
put their clients’ best interest first. The original effective date was pushed
back to July 1, 2019. However, on March 15, 2018, the 5th Circuit Court of
Appeals determined that the DOL acted “unreasonably” and “arbitrarily” when it
set forth the rule, and vacated the rule in its entirety.
Even though the DOL has until June 13 to appeal to the Supreme Court, this
action does not seem likely. The rule remains under review by the Department,
as directed by President Trump, and a new version may emerge in the future.
Meanwhile, the Securities and Exchange Commission (SEC) has proposed a rule
package that includes a best interest standard for broker/dealers, and the
National Association of Insurance Commissioners (NAIC) is also looking at
adding a best interest standard to its annuity suitability model regulation.
WebCE will continue to monitor the state of the DOL fiduciary rule and update
our online insurance continuing education courses accordingly. As your trusted
source for insurance industry news, we are committed to keeping you up-to-date
with hot topics. Visit
www.WebCE.com to view
our complete online insurance CE catalog or call 877-488-9308 to speak to a
member of our support services team.
Additional Resources:
https://www.investmentnews.com/article/20180321/FREE/180329988/what-to-watch-for-next-with-the-dol-fiduciary-rule
https://www.investopedia.com/updates/dol-fiduciary-rule/
https://www.investmentnews.com/article/20180522/FREE/180529985/5th-circuit-denies-states-second-attempt-to-defend-dol-fiduciary-rule