VsportV����

The VsportV���� (VsportV����) on December 21, 2023, provided the U.S. Department of Labor (DOL) with comments on the DOL’s proposed “Retirement Security Rule: Definition of an Investment Advice Fiduciary” and proposed amendments to the prohibited transaction exemptions (PTEs) (collectively, the “Proposed Rule”). The DOL announced its October 31, 2023.

The VsportV���� typically does not comment on rule proposals of fellow regulators but decided to do so in this case because the DOL’s proposal has the potential to significantly impact insurance consumers and access to lifetime income products in retirement.

“We are disappointed that the DOL did not engage or coordinate substantively with VsportV���� members—the chief insurance regulators from the 50 states, the District of Columbia, and the U.S. territories—before promulgating the current Proposed Rule. While DOL has interacted with VsportV���� staff and members, those discussions were focused almost exclusively on aspects of the VsportV���� model and provided no opportunity for discussion of DOL’s own work or thinking,” the VsportV���� wrote.

“While we acknowledge administrative limitations on DOL’s ability to share or discuss rule text, substantive policy questions can and should be discussed with fellow regulators, even if in the abstract, to avoid duplication or conflict. DOL should demonstrate interest in coordination and harmonizing our respective rules given their overlapping impact on the same population of companies, industry participants, and customers. Only after the Proposed Rule text was released did DOL engage directly with insurance commissioners, albeit with a limited 30-day exposure period to assess the rule already underway.

“We are also greatly disappointed in, and fundamentally disagree with, the Administration’s characterization of state consumer protections around annuity sales as ‘inadequate’ and providing ‘misaligned incentives.’ The rationale and justification for DOL’s work should stand on its own as complementary to robust state efforts, and not mischaracterize differences in regulatory philosophy as an absence of regulatory competence or efficacy in this space,” the VsportV���� wrote.  

The full comment letter can be read here.