The American Council of Life Insurers moved one step closer to a legal challenge of the controversial Department of Labor fiduciary rule.
“The ACLI Board of Directors has approved exploring the details of a legal challenge to the Department of Labor’s fiduciary regulation," spokesman Jack Dolan said in a statement. "ACLI will make strategic decisions based on further direction given by our member companies.”
ACLI represents about 300 insurance companies in the United States and abroad. The board action represents the most serious move to date to challenge the fiduciary rule in court.
Opponents are expected to seek an injunction, which must be filed within 60 days of the rule's April 6 publication. Judges are loathe to grant injunctions, which require plaintiffs to show irreparable harm.
An injunction would put an immediate halt to the rule, and most likely punt it into the next administration.
The DOL proposed new fiduciary rules in April 2015, which cover advice provided regarding qualified retirement employer-sponsored plans and individual retirement accounts.
DOL officials and public interest groups say the rules, which impose a fiduciary standard of care on financial advisors dealing with retirement accounts, are necessary to protect retirement investors from high commissions.
Critics say the DOL is trying to force the industry to move from a commission- to a fee-based model. The rule allows for commissions via a prohibited transaction exemption, but industry officials said it isn’t realistic due to the burdensome regulations.
InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]
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