DOL Hints at Regulatory ‘Relief’ for Indexed Annuities
April 7, 2017 by Kerry Pechter
When the Obama Department of Labor’s fiduciary rule, with little warning, decided last year that agents who sold indexed annuities couldn’t take commissions from insurers without signing the legally-binding “Best Interest” pledge to their clients, the $60 billion a year indexed industry went into fibrillation.
But the Trump DOL’s April 3 letter on the rule not only delayed its effect until at least the end of 2017, but also hinted that the DOL will reverse itself and allow complex indexed annuities and variable annuities to be sold on commission under so-called Prohibited Transaction Exemption 84-24, or PTE 84-24, which is the same light oversight applied to plain-vanilla fixed deferred annuities and single-premium immediate annuities.
“While it is not yet clear if the shift in allowing all annuity products to be covered by PTE 84-24 is more than a transitional tactic that will revert to the original plan next year,” wrote industry consultant Steven Saltzman in a client letter this week, “it could be a signal in terms of where a revision to the rule could be heading.
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