NAIFA’s Long Term Care Meeting In Washington, D.C.
You always learn a great deal when you attend meetings. This happened to me when I flew to Washington, D.C. to attend the Congressional Conference of NAIFA (National Association of Insurance and Financial Advisors). Because it was my first meeting in Washington, I was given special training for a day before the full Conference convened. Then there was an additional afternoon of hype, with a Congresswoman from Missouri being the featured speaker. It was an impressive conference with some 800 attendees, with a large contingent from California. The main purpose was to lobby members of Congress, especially House members.
NAIFA was up in arms about a proposed regulation from the Department of Labor. This regulation would place onerous requirements on any financial professionals, including insurance agents, selling 401ks or IRAs. This would include education requirements, but more importantly, the need to execute contacts with prospects in advance of a presentation.
Most important, the financial professional would become a fiduciary and have the same legal obligations as a financial planner. This level of responsibility could easily be interpreted to include all annuity sales and even more. It would inhibit the selling process and greatly increase the agent’s cost of E & O insurance, due to the potential for spurious lawsuits by clients.
These regulations are supported by the Obama Administration, AARP, and other consumer groups. The NAIFA’s purpose was to swarm the House office buildings to enlist the support of House members to counteract the AARP endorsement and to water down the regulation.
That’s what we all did. I went with other California NAIFA members and saw the Main Assistant to Minority Leader Nancy Pelosi, Representative Eric Swalwell of the Stockton-Modesto area, and my own Representative of the San Francisco Peninsula, Jackie Speier. All of these Representatives were liberal Democrats and generally favor Administrative Initiatives.
I believe the NAIFA agents and brokers gave very good presentations. Did we change anyone’s minds? I doubt it. The Representatives listened to our views and asked good questions. However, they were not inclined to take ownership of the issues raised. They preferred that NAIFA discuss the regulation with the White House. NAIFA had done so two weeks previously, and was planning to do so again.
Moving forward I expect the bill to be watered down some, but plan on some new and potentially burdensome requirements in the future sale of annuities. This bill remains to be an important issue in our industry, I will continue to follow its progress and keep you informed.
Louis H. Brownstone is the Chairman of Northstar Network Insurance Agency, Inc. and a certified in Long Term Care specialist. Louis is recognized as an industry leader, with articles appearing frequently in California Broker Magazine and other industry publications and events.