NAIFA GovWatch

NAIFA, Industry Partners Submit Letters to Senate Banking Committee

Issue: Financial Services Regulatory Reform

Date: November 20, 2009

Action Taken: NAIFA and coalition partner organizations submitted two separate letters to members of the Senate Banking Committee regarding financial services regulatory reform legislation. In these letters, NAIFA and others commented upon various aspects of the recently introduced “Restoring American Financial Stability Act of 2009,” which was introduced by Committee Chairman Christopher Dodd (D-CT) earlier this week. To learn more about Senator Dodd’s bill, please read the November 10 GovWatch.

NAIFA, along with the National Association of Independent Life Brokerage Agencies (NAILBA) submitted a letter today to Chairman Dodd and Ranking Member Richard Shelby (R-AL) expressing our overall thoughts on the provisions of the bill that would impact the insurance industry. In the letter, NAIFA and NAILBA:

Offer support for the creation of an Office of National Insurance (ONI) to serve in an advisory capacity at the national and international levels on insurance-related matters
Discuss concerns with the idea of bringing all broker-dealers and investment advisers under one harmonized fiduciary duty
Suggest revisions in legislative language that seeks to curb the use of misleading designations that imply some breadth of knowledge in the “senior investor” market
Seek clarification that most insurance products will not be subject to the regulation of the Consumer Financial Protection Agency should such a body be created.

To view the complete joint letter submitted by NAIFA and NAILBA, click here.

NAIFA submitted a second joint letter, along with AALU and NAILBA, detailing more specifically the organizations’ concerns with the aspects of the bill that seek to bring all broker-dealers and investment advisers under the same harmonized fiduciary duty. The provisions outlined in the bill would force many agents to register as investment advisors even though they are already qualified as registered representatives and supervised by the SEC and FINRA. Rather than adopting this broad-sweeping move, NAIFA supports commissioning a comprehensive study of the regulation of broker-dealers and investment advisers to determine if such sweeping changes are warranted.

To view the complete letter submitted by NAIFA, AALU and NAILBA, click here.

Next Steps: The Senate Banking Committee preliminarily began its discussion of the Dodd legislation with opening statements yesterday. Senator Dodd has said that substantive debate will begin on December 3, but Republican members of the Committee have expressed discontent that not enough hearings have been held with regards to the financial markets meltdown to begin to attempt marking up and advancing legislation of this magnitude. NAIFA will continue to follow developments and keep members informed.

NAIFA Staff Contact: Jill Edwards, Assistant Vice President – Federal Government Relations, at jilledwards@naifa.org.

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