Los Angeles partner Bruce Ashton and Washington, D.C. partner Brad Campbell were quoted in an InsuranceNewsNet article titled, “IMOs to DOL: Delay Rule and Fix Our Exemption.” The article highlights Bruce and Brad’s comment letter submitted to the Department of Labor on its proposal to delay the fiduciary rule. Bruce and Brad represent over a dozen independent marketing organizations who seek “financial institution” status under the fiduciary rule.
Bruce and Brad note that failure to delay the rule would make it impossible for insurance intermediaries that do not meet the definition of a financial institution under the Best Interest Contract Exemption to serve clients without engaging in a prohibited transaction. Currently, the fiduciary rule only designates banks, insurance companies, broker/dealers and registered financial advisors as financial institutions. In their letter, Bruce and Brad urge the DOL to use the delay to fix its exemption and adopt a longer delay to address the overall rule.
“This is not a hypothetical concern,” the letter reads. “Because there is no reasonable exemption for insurance intermediaries, the effect of the fiduciary rule becoming applicable would be to put out of business a vital segment of the insurance industry.”