The Department of Labor (DOL) Fiduciary Rule full implementation has been delayed 18 months for an extended Transition Period, from January 1, 2018 to July 1, 2019. The DOL also announced Monday an extension of the temporary enforcement policy contained in Field Assistance Bulletin 2017-02 to cover the 18-month extension period.
“Thus, from June 9, 2017, to July 1, 2019, the Department will not pursue claims against fiduciaries working diligently and in good faith to comply with the Fiduciary Rule and PTEs, or treat those fiduciaries as being in violation of the Fiduciary Rule and PTEs.”
The DOL has argued that the Proposed Rule delay is needed to do the following:
- Complete their review of the Fiduciary Rule as required by the Presidential Memorandum dated February 3, 2017
- Release a “new and more streamlined class exemption built in large part on recent innovations in the financial services industry”
- Coordinate with the Securities and Exchange Commission in development of future standards of conduct, as well as “avoid obligating financial services providers to incur costs to comply with conditions, which may be revised, repealed or replaced.”
The Proposed Rule does not change the fact that following June 9, 2017, insurance agents and advisers are now and will remain fiduciaries for any annuities or other insurance products sold with respect to qualified funds. This means those agents and advisers seeking to earn commissions from the sale of such products are required to adhere to the modified version of PTE 84-24 (including, adhering to impartial conduct standards, earning no more than reasonable compensation, and making appropriate disclosures).
The extension is expected to be published in the Federal Register on Wednesday. AmeriLife will provide more information about the DOL’s Fiduciary Rule delay as details become available.