Insurance Industry Battles Back Against Fiduciary Standard
February 26, 2019 by Tracey Longo
The three leading insurance and agent associations are working in tandem to support a state “standard of care” proposal for agents that rejects fiduciary responsibility for agents and advisors. At stake, they say: middle-class investors.
By avoiding a fiduciary standard, more insurance companies and agents will be able to continue to offer “small and moderate balance savers and typical buy-and-hold investors who rely on commission-based advice for their retirement needs,” the American Council of Life Insurers, the Association of Advanced Life Underwriting and the National Association of Insurance and Financial Advisors said in a joint statement supporting the National Association of Insurance Commissioners’ (NAIC)’s “Suitability in Annuity Transactions Model Regulation.”
The NAIC’s draft model—years in the making and still a proposal—would require an agent to act with reasonable diligence, care, skill and prudence on behalf of clients and to disclose conflicts of interest as well as cash and non-cash compensation. The proposal relies heavily on a consumers’ ability to decipher myriad legal disclosures.
“We support rules requiring all financial professionals, when making a recommendation, to act in the consumer’s best interest—with care, skill, prudence, and diligence—based on the consumer’s financial needs and objectives. Financial professionals also support requirements to avoid or reasonably manage conflicts of interest through increased transparency,” the three insurance associations said in their joint statement.
Click HERE to read the full story via Financial Advisor.
