NAIFA Blog

NAIFA Supports Bipartisan Congressional Resolution on Retirement Products

NAIFA President Robert Miller issued the following statement on H. Con. Res. 101 to express “the sense of the Congress that our current tax incentives for retirement savings provide important benefits to Americans to help plan for a financially secure retirement”:

“Tax-deferred retirement products, like annuities, Individual Retirement Accounts, and 401(k)s, are the bedrock retirement products for the middle-income Americans served by NAIFA members. That’s why NAIFA commends the bipartisan efforts of Reps. Jim Gerlach and Richard Neal and more than one hundred of their colleagues in the House of Representatives who sponsored a concurrent resolution supporting the current tax incentives for retirement savings.

“Legislators face difficult decisions as they confront the federal budget deficit, and NAIFA is glad that these Members of Congress are aware that we can’t solve the problems of today by making it more difficult for middle-income Americans to plan for the future.”

• NAIFA GovAlert on the resolution
• The Resolution

NAIFA's Terry Headley: Dodd-Frank Hits Main Street

NAIFA Past President Terry Headley

The federal Dodd-Frank financial reform law has broad implications affecting insurance and financial advisors and their clients across the country, NAIFA Immediate Past President Terry Headley told the Minnesota House of Representative Commerce and Regulatory Reform Committee during a Feb. 15 hearing.

Click to listen to Terry Headley's testimony

“NAIFA members are community-based, independent business owners,” said Mr. Headley. “They serve the middle-income market. … Our members are clearly Main Street and not Wall Street.”

“The target (of Dodd-Frank) was really Wall Street, but unfortunately the collateral damage has been on Main Street,” he continued. “The law of unintended consequences is fully at work here.”

Specifically, Mr. Headley told the legislators that, if not done properly, the Securities and Exchange Commission’s forthcoming fiduciary rule, which comes under the auspices of Dodd-Frank, could threaten to disenfranchise middle-market investors by increasing the cost, liability and regulatory burden of the advisors who serve them. NAIFA has been working diligently to ensure that the final SEC rule protects the business model of advisors who serve middle-market investors.

Headley also said that NAIFA is watching to ensure that “regulatory creep” associated with the Federal Insurance Office and Consumer Financial Protection Bureau, both created under Dodd-Frank, does not threaten the state-based regulation of insurance that has served consumers well for decades.

Mr. Headley finally commended the Minnesota legislature for passing the North American Securities Administrators Association model act and the National Association of Insurance Commissioners’ model on senior designations for financial advisors.

He urged the legislators to adopt the NAIC model on annuities suitability, and answered several questions on annuities and the model. Following Mr. Headley’s testimony, the Committee voted unanimously in favor of the NAIC model, which now goes on to consideration by the full House.

•   Headley PowerPoint Presentation

 

Life Insurance Industry Reacts to 2013 Federal Budget Proposal

NAIFA issued the following joint statement, along with the Association for Advanced Life Underwriting (AALU), the American Council of Life Insurers (ACLI), GAMA International, and the National Association of Independent Life Brokerage Agencies (NAILBA), on President Obama's proposed 2013 federal budget:

“As an industry that helps 75 million American families and thousands of businesses responsibly plan for their financial futures, the life insurance industry is deeply concerned about provisions in the administration’s proposed 2013 budget that amount to new taxes on products that provide security and peace of mind. 

“The 2013 budget reasserts two provisions—one on corporate owned life insurance (COLI) and one on life insurers’ dividends-received deduction (DRD)—that were initially proposed in the 2010 budget but rejected by Congress.

“The COLI proposal would impose new taxes on life insurance used by businesses small and large. Many businesses use COLI to protect against financial or job loss stemming from the death of owners or key employees. COLI is also used to ensure business continuation. In addition, COLI is a widely-used funding mechanism for employee and retiree benefits. Congress affirmed the benefits and tax treatment of COLI and assured its responsible use in bi-partisan legislation enacted in 2006.

“Another proposal would undercut longstanding rules regarding life insurers’ DRD that are designed to prevent double taxation of corporate earnings. The administration’s proposal would reduce the DRD that life insurers use in accounts that fund variable life insurance and variable annuity contracts—key products for financial and retirement security.

“We are also concerned with a new proposal that would impose new taxes on contributions to retirement plans and Individual Retirement Accounts.

“At a time of low individual savings, it makes no sense to propose taxing products that help people build their nest eggs. Keep in mind that 20 percent of Americans’ long-term savings is in life insurance and annuities. The administration’s budget proposal would discourage people from turning to products they want and need. Indeed, it does not make sense when you consider the importance of industry products in people’s lives. On a daily basis, life insurers paid out $1.5 billion on average in 2010. At the same time, Social Security paid out $1.9 billion daily.

“Wisely, Congress has rejected similar proposals in past years. We urge the administration to withdraw its proposals on COLI and DRD.”

• Press Release in Word format.
• Story in LifeHealthPro

Poll: Investors Find Financial Advisors Trustworthy

Who do investors trust? A new survey by John Hancock Financial found that investors place greater trust in financial advisors than in Federal Reserve Chief Ben Bernanke, President Barack Obama, the financial news media or the U.S. Congress.

Of the investors surveyed, 82 percent said that have a high level of trust in advisors. Only 5 percent of investors said they distrust advisors (13 percent were "neutral"), while 40 percent said they distrust Mr. Bernanke, 54 percent distrust President Obama, and 68 percent distrust Congress.

The findings on financial advisors echo those of similar studies, including a NAIFA poll that found 73% of consumers who have worked with a financial advisor say the advisor provides valuable service and 75% say their financial advisor works in their best interest.

NAIFA's Diane Boyle Discusses New Senate Bill to Address Harm Being Done by the MLR Rule

In a podcast produced by Employee Benefit Adviser magazine, NAIFA Vice President of Federal Government Relations Diane Boyle discusses S. 2068, a Senate bill that would change the way agent compensation is considered in the federal health care law’s medical loss ratio (MLR) provision.

“The bill … would allow consumers to have access to that very much needed advice and counsel that they receive from health insurance agents,’ Ms. Boyle told the magazine.

A similar bill in the House of Representatives, H.R. 1206, has at least 170 bipartisan cosponsors.

• Listen to the Employee Benefit Adviser podcast.
• Read an Employee Benefit Adviser article on the Senate bill.