NCOIL Panel Passes Resolution Urging Labor Department to Repeal Fiduciary Rule
PORTLAND, Ore. //BestWire// - A National Conference of Insurance Legislators panel has approved a resolution asking the U.S. Department of Labor to repeal its controversial fiduciary rule.
The resolution was passed during NCOIL’s recent meetings in Portland, Oregon, where state lawmakers and regulators also addressed cybersecurity and workers’ compensation issues among others.
The Life Insurance & Financial Planning Committee approved the Fiduciary Rule resolution, which next will be considered when the Executive Committee meets again in Las Vegas in November during the NCOIL Annual Meeting.
Labor issued its rule in April. Congressional lawmakers sent legislation to President Obama in May that would stop implementation, but Obama vetoed it in June. The rule, critics claim, would tighten conflict-of-interest rules under the Employee Retirement Income Security Act. Among the concerns are the rule would hike compliance and oversight costs, while increasing legal exposure for independent insurance agents and brokers, according to the Independent Insurance Agents & Brokers of America (Best’s News Service, May 25, 2016).
The resolution was sponsored by Arkansas Republican state Sen. Jason Rapert, who is also NCOIL’s secretary. The resolution said NCOIL strongly supports states’ rights to regulate their own insurance markets and products, including retirement-related financial products. The fiduciary rule, the resolution said, “would threaten the proven state-based legislative and regulatory structure by imposing a vague and burdensome fiduciary standard on non-fiduciary sales relationships, thereby upending the retirement savings marketplace.”
In other areas, Rachel Jensen, the American Insurance Association counsel, said her group urged NCOIL to monitor the work on a cybersecurity model being done by the National Association of Insurance Commissioners’ cybersecurity task force. NCOIL Chief Executive Officer Thomas Considine said his group would not draft a competing version of a cybersecurity model law, Jensen said.
Joe Thesing, vice president, state affairs for the National Association of Mutual Insurance Companies, said South Carolina Insurance Director Ray Farmer testified a new NAIC cyber model law draft will be available in the next few weeks and while the NAIC is not voting on it at its August meetings in San Diego, it wants to pass the model law by the end of 2016. Discussions are underway between NAIC and NCOIL to host a conference call on the NAIC cybersecurity model draft in the coming weeks, Thesing said.
Also, the NCOIL Workers’ Compensation Committee held another discussion on alternatives to traditional workers’ compensation, including an Oklahoma law giving employers there the option to leave workers’ compensation, which proponents say will save costs by getting employees back to work faster. Insurance industry groups have proposed working to reform the workers’ compensation system instead.
A.J. Donelson, staff consultant for the Association for Responsible Alternatives to Workers’ Compensation, a group that has been pressing lawmakers in several states to pass legislation similar to Oklahoma’s said his group encouraged NCOIL to help its members be aware of and examine new data on workers’ compensation alternatives. But Thesing told Best’s News Service that because no lawmakers have proposed an NCOIL model law after three discussions “suggests that its future discussion is in doubt” and that the committee is skeptical of the Oklahoma alternative.
(By Thomas Harman, Washington Bureau manager, BestWeek: Tom.Harman@ambest.com)