NAFA Seeks Preliminary Injunction against DOL Fiduciary Rule
NAFA, the National Association for Fixed Annuities, announced today that it has filed a federal lawsuit in the D.C. District Court
Fixed Annuity Industry Group Warns of Increased Costs, Reduced Consumer Choice, and Regulatory Overreach
WASHINGTON, D.C., June 2016 — The National Association for Fixed Annuities (NAFA) has filed a federal lawsuit in the U.S. District Court for the District of Columbia seeking to block the Department of Labor's (DOL) controversial fiduciary rule before it takes effect.
The organization is requesting a preliminary injunction that would delay implementation of the rule, which was scheduled to become operational in April 2017. NAFA argues that the regulation would have significant negative consequences for insurance professionals, fixed indexed annuity providers, and retirement savers across the United States.
Why NAFA Opposes the Fiduciary Rule
According to NAFA, the Department of Labor exceeded its regulatory authority by extending fiduciary obligations to insurance agents and advisors involved in Individual Retirement Account (IRA) transactions.
The association contends that the rule improperly classifies insurance agents as fiduciaries and imposes compliance requirements that were originally designed for the securities industry rather than the insurance marketplace.
NAFA also argues that the regulation effectively creates a private right of action against financial professionals, a power that the organization believes belongs exclusively to Congress.
Concerns Over Fixed Indexed Annuities
One of the primary concerns raised by NAFA involves the treatment of Fixed Indexed Annuities (FIAs) under the final fiduciary rule.
The Department of Labor ultimately placed FIAs under the Best Interest Contract Exemption (BICE) framework rather than the less restrictive Prohibited Transaction Exemption (PTE) 84-24, which had been proposed earlier in the rulemaking process.
Annuity Outlook adheres to the highest editorial standards. Our financial journalists verify all data, verify facts, and provide objective market insights. If you notice a corrections issue, please contact our desk.
Annuity Outlook contributor covering retirement policy, market indices, and pensions. Passionate about bringing clarity to complex financial concepts.
