Last week, the Department of Labor (DOL) released more information about federal regulations that tighten conflict of interest rules under the Employee Retirement Income Security Act. These regulations require insurance agents and brokers who give guidance about certain retirement investments to adhere to a fiduciary standard of care.

Finalized last spring, the rule will begin taking effect April 1, 2017, with some portions phasing in through Jan. 1, 2018. However, as financial institutions begin to prepare for the rule, it is already impacting how advisers provide retirement advice and earn compensation for it.

In an effort to facilitate understanding and make the transition to the new rule as smooth as possible, the DOL has issued a new FAQ document helps clarify, among other things: 

• How the DOL will approach implementation and enforcement during the phase-in period when insurers, agents and brokers come into compliance with the rule.
• General information about various exemptions from the rule, including if and when agents and brokers may use special procedures to earn otherwise prohibited types of compensation—such as commissions, contingent commissions and bonuses—and how certain exemptions can apply to specific types of financial advice, such as rolling over a 401(K) into an IRA. 
• When and how agents and brokers can comply with the Best Interest Contract exemption for financial advice related to variable and fixed-index annuities and the revised PTE 84-24 for financial advice related to fixed annuity products.
• How independent marketing organizations can continue to distribute insurance company retirement products, such as annuities, through independent insurance agencies.

According to a DOL blog post, the agency intends to issue additional FAQ documents over the next few months and invites anyone to submit questions about the rule’s application directly to the agency.

Jennifer Webb is Big “I” federal government affairs counsel.