NAIFA 2015 Federal Advocacy Victories

JANUARY 7: As one of the first acts of the new Congress, both the House and Senate passed the National Association of Registered Agents and Brokers (NARAB II) the Terrorism Risk Insurance Program Reauthorization Act of 2015. The bill was shortly thereafter signed into law by the President.

JANUARY 12: The House of Representatives again approved legislation to redefine full-time employment from 30 hours a week to 40 hours, aimed at minimizing employers from cutting hours or jobs to avoid providing coverage to part time workers.

MAY 4: NAIFA President Juli McNeely, Past President Terry Headley along with NAIFA staff and counsel, met with the White House’s National Economic Council and key Department of Labor (DOL) representatives to discuss the DOL’s proposed fiduciary rule.  During the hour-long meeting, NAIFA expressed support for a workable best interest standard and outlined NAIFA’s areas of concern with the current DOL proposal. The meeting concluded with a commitment to a continued dialogue between NAIFA and the Administration.

MAY 20: NAIFA leaders explained to DOL representatives the impact their proposal would have on Main Street to both advisors and retirement savers. The DOL listened and asked for comments and more input on how to resolve the problems that make the DOL proposal unworkable. Both the DOL and the NAIFA promised follow-up meetings and to continue communications.

MAY 20: Nearly 800 NAIFA members visited 91% of Congressional offices from all 50 states and the District of Colombia. Constituents explained to them why the Department of Labor’s proposed fiduciary rule is unworkable, and why it is important to preserve current law tax treatment of life insurance, annuities, retirement savings, health insurance, and employer-provided benefits. Nearly 50% of meetings were with lawmakers and included 100% of Senate Leadership, 100% of House Leadership, 100% of both Senate Finance and Banking committees, 89% of the House Ways & Means committee and 88% House Financial Services committee.

JULY 16: Bill Anderson represented NAIFA on a life insurance suitability panel at the summer NCOIL meeting. NAIFA has generally opposed efforts by regulators to impose life insurance suitability specifically on proposals that would place responsibility for determining suitability solely on the producer. NCOIL will not be moving forward with discussion life insurance suitability.

AUGUST 11: NAIFA President Juli McNeely and one of her small-business owner clients, dentist Dr. Jen Knoll, testified on behalf of NAIFA during the second of almost four days of public hearings at the Department of Labor, expressing the association’s concerns with the proposed DOL rule to re-define investment advice fiduciary when working with retirement savers.

SEPTEMBER 10: NAIFA President Juli McNeely testified before the House subcommittees on Oversight and Investigations and Capital Markets and Government Sponsored Enterprises that the Department of Labor’s proposed fiduciary rule would hinder saving and hurt clients.

SEPTEMBER 18: NAIFA Secretary Paul Dougherty appeared a Sept. 18 briefing sponsored by the Financial Security & Life Insurance Caucus, speaking on how the Department of Labor’s fiduciary proposal would have a chilling effect on middle-income investors and retirement savers. The Financial Security and Life Insurance Caucus was formed earlier this year to address the unprecedented financial challenges families face and how policymakers can seek solutions

SEPTEMBER 30: NAIFA member Ken Specht of Kenosha, WI testified at a hearing before the House Ways and Means Committee Subcommittee on Oversight on the Department of Labor’s fiduciary rule.

OCTOBER 9: President Obama signed into law the Protecting Affordable Coverage for Employees (PACE) Act, which will ensure that small group markets remain defined as 1-50 employees rather than change to 1-100 employees on January 1, 2016. The bipartisan modification to the ACA will help NAIFA members continue to serve their small employer clients and avoid plan disruption for employers with 51-100 employees.

DECEMBER 2: NAIFA President Jules Gaudreau testified before the House Committee on Education and the Workforce on the importance of a bipartisan legislative alternative to the DOL fiduciary proposal. Reps. Richard Neal (D-MA), Peter Roskam (R-IL),  Phil Roe (R-TN), John Larson (D-CT), Buddy Carter (R-GA) and Michelle Lujan Grisham (D-NM) formed a congressional working group that developed principles for legislation that would create a best-interest standard for advisors while avoiding the problematic requirements and restriction of the DOL proposal.

DECEMBER 9: NAIFA president Jules Gaudreau appeared on an NPR Morning Edition segment discussing the DOL’s fiduciary proposal.

DECEMBER 9: NAFIA CEO Kevin Mayeux was featured in a PBS Newshour segment on the DOL’s fiduciary proposal. While the overall tone of the item may have leaned in favor of the DOL proposal, Mayeux was able to defend advisors who have seemingly been under siege by proponents of the rule.

DECEMBER 15: Senators Crapo, Tester, Heller, Heitkamp, Vitter, Donnelly, and Rounds wrote to President Obama requesting an update on when the 13 nominations for the Board of Directors of the newly established NARAB will be announced. Under the new law, 13 Board of Directors were supposed to be appointed by the President within 90 days after enactment.  The first meeting is supposed to occur within 45 days of the nominees being confirmed by the Senate.

DECEMBER 18: Congress enacted legislation extending expired tax benefits and approving the omnibus appropriations to fund the government through September 30, 2016. The year-end bills include NAIFA-backed provisions including:

• Permanent and much higher small business expensing limits (Sec. 179 Expensing) – Current law allows a full deduction of certain business acquisitions for purchases up to $25,000. This bill allows the deduction for purchases up to $500,000. The higher limit was the law in 2014, but it expired 12/31/14 so it needed to be reinstated/extended for 2015 and beyond.
• Permanent IRA-to-charity gifting rules – allows IRA owners who are 70 1/2 or older to make a direct tax-free gift (of up to $100,000) to a charity.
• Authority to roll over retirement plan funds into a SIMPLE IRA – Current law restricts/prevents rollovers to SIMPLE retirement plans. This bill would allow them.
• Delay in the ACA Cadillac tax – Current ACA law imposes a 40% tax (payable by insurer/health plan sponsor) on the amount of health insurance premium that exceeds statutory limits ($10,200 for self-only coverage; $27,500 for family coverage). The bill delays its effective date (ACA set it to go into effect in 2018)  for two years, to 2020.

NAIFA 2015 State Advocacy Victories

NAIFA State Associations collectively monitored over 1,000 bills in state legislatures across the country.   Of the 156 bills that NAIFA state associations supported, 56 (equal to 35%) were enacted into law; of the 90 bills the state associations opposed, 78 (equal to 86%) were defeated.

NAIFA-National testified before the NAIC on the growing problem of senior financial exploitation and recommended the NAIC become involved in this issue.

NAIFA-National developed and distributed to state associations model state legislation designed to protect seniors from financial abuse.

NAIFA state associations played a crucial role in defeating state run retirement plan legislation in many states. NAIFA state associations in Washington State and New Jersey worked towards the successful enactment of legislation which will establish a voluntary marketplace for employers and retirement savers to connect with private market retirement plan providers.

NAIFA submitted two comment letters to FINRA in connection with proposed Rule 2273, which would require firms to deliver educational communications to clients regarding firm recruitment practices. The final version of the proposed rule, which has been submitted to the SEC for approval, is greatly improved and much less burdensome/onerous than the initial proposed rule.

NAIFA-Nebraska and NAIFA-Iowa successfully lobbied to reverse a decision by insurance regulators to suspend agent commissions on policies sold through the now bankrupt Affordable Care Act (ACA) Co-Op operating in those states.  Due to those critical efforts, agents will be placed higher in the bankruptcy process of the Co-Op to retrieve payments owed.

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