DOL Rethinks Rules that Impact Agents

The debate continues in Washington, D.C. regarding multiple Department of Labor (DOL) rules and policies issued during the Obama Administration.

Last week, the DOL issued a request for information on the fiduciary rule. The DOL is seeking information on whether the rule should be further delayed, if specific portions should be amended, and the practical implications of the rule since it began to take effect on June 9. Interested parties have 30 days to respond.

The fiduciary rule is currently partially in effect. During the transition period, financial institutions and advisers must comply with the “impartial conduct standards,” which require them to:

• Give advice that is in the “best interest” of the retirement investor.
• Charge no more than reasonable compensation.
• Make no misleading statements about investment transactions, compensation and conflicts of interest.

The DOL issued an FAQ document and a temporary enforcement policy to help advisers understand the requirements that apply during the transition period. Absent additional action from the DOL, the transition period ends on Jan. 1, 2018, when full compliance will be required for firms and advisers.

Meanwhile, the DOL is also reviewing an Obama-era rule on overtime pay. The overtime rule—which would have increased the number of employees legally required to receive overtime pay—was scheduled to take effect in December 2016. However, lawsuits filed by the Big “I,” the Chamber of Commerce and numerous state governments resulted in delaying implementation of the rule. The Big “I” was the only insurance trade association to file a lawsuit.

Litigation is still ongoing, but the Trump Administration has indicated it does not want to move forward with the rule in its current form. The DOL is expected to release a request for information on the overtime rule in the near future.

Finally another shift from the Obama Administration related to labor policy, the DOL withdrew guidance related to joint employment and independent contractors in June. More information on the retracted guidance is available on the Big “I” website, which you must log in to view.

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