- 11,457
The DOL Responds to Fiduciary Rule Questions - InsuranceNewsNet
Here is the PDF:
https://www.dol.gov/sites/default/f...nter/faqs/coi-rules-and-exemptions-part-1.pdf
I found question 22 helpful:
Q22. Can insurance companies rely on independent insurance agents to sell fixed rate and fixed indexed annuities to retirement investors after the applicability date of the Rule?
The response is lengthy but a couple of things:
Under the full BIC Exemption, advice recommendations must be overseen by an appropriate financial institution, which may be the insurance company that issues the annuity. As under the “suitability” rules that apply to insurance companies under many states’ laws, the insurer or financial institution responsible for overseeing the agent’s recommendations is responsible for
adopting appropriate supervisory mechanisms to ensure the agent’s (including independent agent’s) compliance with its legal obligations to customers.
and
When an independent insurance agent recommends an annuity under the full BIC Exemption, the agent and the insurance company acting as the financial institution must satisfy the exemption’s conditions, including the fiduciary acknowledgment and the impartial conduct standards, with respect to that transaction. In such cases, the insurance company effectively stands behind the agent’s recommendation to purchase the insurance product, and makes a commitment to the retirement investor that it has policies and procedures in place that have been prudently designed to ensure that the agent’s recommendations will be prudent and based upon the investor’s financial interests, rather than, for example, sales incentives created by the insurer that run contrary to the investor’s interests. Thus, as the full BIC Exemption states, the insurer, its affiliates, and related parties may not use or rely upon incentives, quotas, or other actions or incentives that are intended or would reasonably be expected to cause an adviser to give advice that violates the impartial conduct standards, including the obligation to make recommendations that are prudent and loyal.
and
While the independent agent may recommend products issued by a variety of insurers, the full BIC Exemption does not require insurance companies to exercise supervisory responsibility with respect to the practices of unrelated and unaffiliated insurance companies. If an insurer chooses to act as the supervisory financial institution for purposes of the exemption, its obligation is
simply to ensure that the insurer, its affiliates, and related parties meet the exemption’s terms with respect to the insurer’s annuity which is the subject of the transaction.
Here is the PDF:
https://www.dol.gov/sites/default/f...nter/faqs/coi-rules-and-exemptions-part-1.pdf
I found question 22 helpful:
Q22. Can insurance companies rely on independent insurance agents to sell fixed rate and fixed indexed annuities to retirement investors after the applicability date of the Rule?
The response is lengthy but a couple of things:
Under the full BIC Exemption, advice recommendations must be overseen by an appropriate financial institution, which may be the insurance company that issues the annuity. As under the “suitability” rules that apply to insurance companies under many states’ laws, the insurer or financial institution responsible for overseeing the agent’s recommendations is responsible for
adopting appropriate supervisory mechanisms to ensure the agent’s (including independent agent’s) compliance with its legal obligations to customers.
and
When an independent insurance agent recommends an annuity under the full BIC Exemption, the agent and the insurance company acting as the financial institution must satisfy the exemption’s conditions, including the fiduciary acknowledgment and the impartial conduct standards, with respect to that transaction. In such cases, the insurance company effectively stands behind the agent’s recommendation to purchase the insurance product, and makes a commitment to the retirement investor that it has policies and procedures in place that have been prudently designed to ensure that the agent’s recommendations will be prudent and based upon the investor’s financial interests, rather than, for example, sales incentives created by the insurer that run contrary to the investor’s interests. Thus, as the full BIC Exemption states, the insurer, its affiliates, and related parties may not use or rely upon incentives, quotas, or other actions or incentives that are intended or would reasonably be expected to cause an adviser to give advice that violates the impartial conduct standards, including the obligation to make recommendations that are prudent and loyal.
and
While the independent agent may recommend products issued by a variety of insurers, the full BIC Exemption does not require insurance companies to exercise supervisory responsibility with respect to the practices of unrelated and unaffiliated insurance companies. If an insurer chooses to act as the supervisory financial institution for purposes of the exemption, its obligation is
simply to ensure that the insurer, its affiliates, and related parties meet the exemption’s terms with respect to the insurer’s annuity which is the subject of the transaction.
