NAIFA Legislative Forum

NAIFA held its annual Legislative Forum at this year's Performance + Purpose conference. The NAIFA government relations staff and consultants provided insight and analysis on issues facing NAIFA members and their clients. Following is a transcript of the Forum with embedded videos containing additional commentary. (To download these videos, click here.)

Diane Boyle, NAIFA Senior Vice President of Government Relations: One of the many benefits NAIFA provides is protecting your business, but it requires constant vigilance. It's wonderful to hear that NAIFA makes a big impression on the Hill and research indicates that NAIFA leads the industry.  Our team educates policymakers in Congress, state legislatures and regulatory agencies to favorably influence laws. That's no small feat. There are over 7,000 state legislators, 535 Members of Congress,
and countless bureaucrats that need to be educated on our broad range of issues. Dedicated volunteers, like you, and advocacy professionals make up our knowledgeable, highly-qualified team of policy and legal experts who are politically well-connected. Now is not the time to take your foot off the gas.
 
We'll begin with a discussion of tax reform. We asked our issue experts for their thoughts on the likelihood of comprehensive tax reform in 2017, the impact on our products, as well as how the momentum for tax reform could shift depending on the November election results. Let's hear what they have to say.

 

 
Gary Sanders, NAIFA Vice President of Government Relations: As you just heard, regardless of the outcome of the election, tax reform of some type obviously continues to be of major interest to us. And not just on the federal level! States are still looking for revenue to close some pretty large budget gaps, and our products and services are still a big juicy target!
 
Premium taxes, sales taxes, annuity taxes, taxing the services we provide, and trying to tax what hasn't been taxed before are all finding their way into legislation. And for the most part, we've been very successful at fending off tax increases and expansions, some of which go to the very heart of what you do.
 
In Oregon for example, a few years back NAIFA-Oregon members dropped everything and testified against a fast moving bill that would have taxed the inside build up and death benefit, and they must have been fairly persuasive, since the bill's sponsor didn't even vote in favor of his own bill!
 
Now, it's difficult to believe that another issue could attract as much attention as tax reform, but the Department of Labor's fiduciary rule came along and did just that!


 
Gary Sanders: With the DOL fiduciary rule being a somewhat done deal,
the next asteroid hurtling towards us is whether the SEC will also adopt a fiduciary duty rule for the activities of investment advisers and broker-dealers. This issue has been on "slow simmer" at the SEC going back to the Dodd Frank law in 2010. 
 
And, actually, let me go off on a short tangent here—if anyone ever questions NAIFA's value, the inclusion in Dodd­ Frank of the extremely important protections allowing the continued sale of propriety products as well as the ability to receive commission compensation was NAIFA's doing, and it was NAIFA who got the necessary language included in the law—and don't let anyone tell you otherwise!
 
Even though the SEC has been kicking this issue around for some years, this continues to be a high priority issue for the SEC, and in fact their regulatory calendar for 2017 says a rule proposal could be published next spring, so we'll continue to keep an eye on this.
 
Here's a little more from my colleagues on when the SEC may act and how Congress figures into all of this.



Diane Boyle: Kate says it best, it's never too soon to state what is best for consumers. While the SEC appears to be moving at a thoughtful pace, NAIFA has not hesitated to engage regulators and legislators. Many issues cross not only agency jurisdiction—like the SEC and DOL efforts—but also cross state and federal boundaries. The DOL's efforts to pave the way for state and city-run retirement plans are excellent examples. NAIFA's active involvement in state and federal advocacy is necessary to address overlapping issues. Our defenders will share DOL's latest retirement efforts. 
 

 
Gary Sanders: As I say each year, we can't forget that insurance is still primarily regulated by state lawmakers, who act on a much quicker time schedule than our federal legislators do.
 
An example: over 25 states have considered proposals to set up state-run retirement programs that would compete with the private market. But as Judi said, we don't agree that this approach will help address the shortfalls in retirement savings that we're seeing in the U.S. The problem is that these proposals are focused on improving access to retirement products-
which isn't the problem at all.
 
Anyone can walk into any of your offices today and come out an hour later with a retirement plan that fits their individual needs. I mean, this is what you folks do, right? The real problem—and the better solution—is for states to focus their resources on consumer education, outreach, and greater incentives to think about and plan for retirement. Both NAIFA and our state associations have been heavily engaged on this issue, and so far, in spite of some heavy hitters pushing these bills, we're holding our own.
 
Our folks have sent letters, made phone calls, attended meetings and given testimony to educate their lawmakers about why these proposals aren't the answer. Two states—Washington and New Jersey—have adopted marketplace legislation supported by NAIFA that focuses on outreach and education and bringing employers together with private market retirement solutions that fit their unique needs.
 
Six states have enacted laws creating a state run plan, but none of these plans have actually gone into operation or enrolled anyone yet, and there are serious questions about their tax status, ERISA and the costs involved in setting up and operating the plans. And as you might expect, there's a lot of interest about retirement savings on the federal level as well.
 

 
Diane Boyle: While current legislative efforts are unlikely to change the DOL rule, NAIFA joined ACLI in a judicial challenge to the DOL rule in federal court. NAIFA's participation in this lawsuit is part of our strategy to leverage all three branches of government to achieve public policy that lets you serve your clients.
 
Speaking of laws that are difficult to change, let's move to health care. In addition to the changes we were able to make to the ACA—you'll hear about those in a minute—we continue to face regulatory obstacles. Just last month, two new sets of regulations were proposed. One suggests that short-term medical policies should be limited to 3 months, and the other recommends expanding the Medicare PACE program and eliminating the participation of agents. NAIFA will not let these continual assaults on our members go unaddressed. 
 
You might remember that I quoted my youngest son at this meeting in 2010, who after being told on Christmas Eve that I needed to watch the Senate vote and it would be just a few minutes, responded "It will NEVER be over."  He was right then and now, but we're on the right side of the issue so we'll keep at it.
 
And, "because I said I would," let's hear about some of our successful modifications... 
 

 
Gary Sanders: Another issue that's gotten a lot of attention lately concerns senior financial protection. A half dozen states have enacted laws to protect seniors from financial fraud and exploitation. Most importantly for NAIFA members, these laws protect advisors from liability when they protect their clients from becoming a victim of fraud.   
 
NAIFA has taken a strong leadership position on this issue. We've brought it to the NAIC's attention, we've testified before the NAIC, and NAIFA has developed our own model law to both help protect your senior clients and insulate you from liability when you look out for your clients. Here are my colleagues Steve Kline and Mike Hedge to speak a little more in depth about this important issue.
 

 
Gary Sanders: You've just heard about some of the major issues we're working on, but I need to focus on that word "some," because there are a number of other issues that are  important to NAIFA but aren't necessarily in the spotlight.
 
In the states, we're paying attention to issues involving the use of designations, STOLI is still rumbling around, LTC and other health products regulation, CE credits for NAIFA membership, and working to protect your compensation from health insurance commission cuts, among others.
 
On the federal level, well, here are Dani, Steve and Diane to talk a little bit about what else is keeping us up at night.
 

 
Diane Boyle: In addition to the issues we've discussed this morning, there are numerous other proposals that require our vigilance. In fact, there are nearly 2,000 bills in Congress that are of interest to NAIFA members: 796 financial services bills; 456 health insurance bills; 351 retirement and employee benefits bills; and another 364 addressing long-term care, life insurance, annuities, property & casualty or estate tax issues. In addition, there are countless regulatory initiatives addressed on behalf of NAIFA members and the clients you serve.
 
You are familiar with our Department of Labor, Treasury, and Health & Human Services activities, but NAIFA's role expands beyond these agencies. For example, you know all too well the role insurance plays when disaster strikes. But did you know NAIFA is a member of the private sector division of Federal Emergency Management Agency?
 
The August flood in Louisiana is the most recent example of NAIFA being called upon to participate in providing situational awareness information to the National Business Emergency Operations Center within FEMA.
 
This is just one example. Time, and likely your interest level, won't permit me to name them all. It isn't enough to have the right policy positions; we need to have the means to deliver the message and well-informed officials to receive them. That's where the depth of NAIFA's influence and exposure to key policymakers really makes a difference.
 
We'll shift from our policy efforts to our political programs…
 
Magenta Ishak, NAIFA Vice President of Political Affairs: Thanks, Diane. You've just heard that in order for NAIFA to have policy success, NAIFA members actually have to tell their elected representatives what concerns them. Let's listen to why this is so true.
 


Magenta Ishak: Pat just nailed it! Lawmakers meet with hundreds of groups in the course of a month. Repetition is vital to our success. That means that you have to make a commitment to building a long-term relationship with your Senators and Representatives. And Judy brings up another extremely important fact: lawmakers really do not understand what you do. 
 
YOU have to tell them. You have memorable stories to tell, and when you do that with your elected representatives, you're helping to protect your clients in ways far beyond finding the best products for their financial security.
 

 
Magenta Ishak: Matt raises an excellent point. Sometimes when you request an appointment with your member of Congress, especially if the meeting is in Washington, D.C., where lawmakers have jam-packed schedules, you will actually be meeting with staff. And the average staff person will be much younger than you, and wholly unfamiliar with what you do for a living. 
 
So, when you meet with those congressional staff, you have a tremendous opportunity to impress on them the importance of what you do to protect your clients against financial tragedy. Now let's hear about one of our best advocacy tools and my personal favorite—IFAPAC—your political action committee
 
Some of you don't believe that your individual contribution makes a difference, but it DOES make a difference, especially when combined with those of thousands of your NAIFA colleagues.
 
 

 
Magenta Ishak: Judi and Scott are absolutely correct! We simply cannot achieve our legislative objectives without a robust PAC. Your support is so very much appreciated and needed. For those who need some more convincing, let's hear a little about what IFAPAC is not about.
 

 
Magenta Ishak:
I.           NAIFA members can be politically and legislatively active in so many ways:
 
II.          Meeting with lawmakers in the district
 
III.         Responding to NAIFA's GovAlerts
 
IV.        Participating in a candidate campaign
 
V.         Serving on a lawmaker's business advisory board
 
VI.        Inviting elected officials and candidates to speak at local NAIFA meetings
 
VII.       Attending fundraisers
 
VIII.      Hosting fundraisers. 
 
Here are some recent examples of how and why politically active NAIFA members really made a difference.
 

 
Magenta Ishak: Okay! So now you're ready to dive into the deep end of the pool. How do you start? 
 
Well, first if you are a NAIFA member, you should make a meaningful contribution to IFAPAC. If you're already contributing, THANK YOU! And please ask a non-contributing NAIFA member to join you. 
 
And this being a major election year, you have a great opportunity to get involved in campaigns. There will be many new members of Congress after the November 8th General Elections and they will all need trusted relationships with NAIFA members. So, if you are already affiliated with a candidate running for Congress, please stop by the IFAPAC/APIC table and let us know. Now let's listen to other suggestions from your Government Relations Team.
 

 
Magenta Ishak: So you're going to contribute to IFAPAC. You're going to build a relationship with a lawmaker. Now, we want you to do one more thing... attend NAIFA's 2017 Congressional Conference in Washington, D.C., in May. Dani said it... "It's a ton of fun." Let's see some highlights from this year.
 

 
Diane Boyle: I look forward to seeing you again in May. Your citizen advocacy is critical to our united success. But don't take my word for it. Your elected Representatives acknowledge and appreciate your efforts.
 

 
 
 


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