The suit was filed on the day the Retirement Security Rule was finalized
of ConsumerAffairs
On the day that the Biden administrations new rule to protect retirement savers went into effect, several insurance organizations filed lawsuits to overturn it.
The rule, known as the Retirement Security Rule, drafted by the U.S. Department of Labor (DOL), requires most retirement investment planners and advisers to act in their clients best interest, guiding them to investments that will make the most money.
While that may seem like a no-brainer, many advisers also represent investment vehicles that pay them a commission. They often charge nothing for their services since clients often invest in those funds.
Nine insurance organizations filed a federal lawsuit in Texas to overturn the rule. The groups are:
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The National Association for Fixed Annuities
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The American Council of Life Insurers
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Finseca
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Insured Retirement Institute
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National Association of Insurance and Financial Advisors (NAIFA)
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NAIFA-Texas
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NAIFA-Dallas
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NAIFA-Fort Worth
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NAIFA-POET
Arbitrary and capricious
The plaintiffs contend that the rule is contrary to law, arbitrary and capricious and ultimately unconstitutional. In a joint statement, the industry groups said they are filing the lawsuit to protect the best interests of retirement savers.
Our filing makes a convincing case that the DOLs fiduciary-only regulation suffers from the same legal defects as the DOLs failed 2016 rule, the groups said. It exceeds the DOLs authority under federal law[and] ignores recently enhanced federal and state standards for financial professionals who work with retirement savers."
Other industry groups filed suits against DOL earlier this month, attacking specific provisions of the rule. The administration says the Retirement Security Rule will protect retirement investors from conflicts of interest and improper investment recommendations, potentially saving investors up to $5 billion each year.
Photo Credit: Consumer Affairs News Department Images
Posted: 2024-05-29 11:03:59
