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July 20, 2015 

VIA ELECTRONIC FILING – www.regulations.gov 

Office of Regulations and Interpretations 

Employee Benefits Security Administration 

Attn: Conflict of Interest Rule 

Room N-5655 

U.S. Department of Labor 

200 Constitution Ave., NW 

Washington, DC 20210 

RE: RIN 1210-AB32: Proposed Definition of Fiduciary Investment Advice 

To Whom It May Concern: 

The Council of Insurance Agents and Brokers (“Council”) appreciates this opportunity to 

comment on the Department of Labor’s (“Department”) proposed definition of fiduciary 

investment advice (“proposed rule”) under the Employee Retirement Income Security 

Act of 1974 (“ERISA”) and the Internal Revenue Code of 1986 (“Code”). The Council 

represents the largest and most successful property/casualty and employee benefits 

agencies and brokerage firms. Council member firms annually place more than $200 

billion in commercial insurance business in the United States and abroad. Council 

members conduct business in some 30,000 locations and employ more than 120,000 

people worldwide. In addition, Council members specialize in a wide range of insurance 

products and risk management services for business, industry, government, and the 

public. 

Scope of the Proposed Rule

Under the proposed rule, “a person renders investment advice with respect to moneys or 

other property of a plan or IRA” if the person provides, in exchange for direct or indirect 

compensation: 

(1) A recommendation as to the advisability of acquiring, holding, 

disposing or exchanging securities or other property (including a 

recommendation to rollover assets or take a distribution); 

(2) A recommendation as to the management of securities or other 

property (again, including rollover and distribution decisions); 

(3) An appraisal, fairness opinion, or similar statement—verbal or 

written—concerning the value of securities or other property when 

provided in connection with a specific transaction; or 
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(4) A recommendation of a person who is also going to receive a fee or 

other compensation for providing the aforementioned types of advice. 

The proposed rule defines “plan” as “any employee benefit plan described in section 3(3) 

of [ERISA] and any plan described in section 4975(e)(1)(A) of the Code.”1 Section 3(3) 

of ERISA includes employee pension benefit plans and employee welfare benefit plans, 

such as health, life, and disability insurance.2 

Non-Cash-Value Welfare Benefit Plans Should be Excluded from the Rule 

Given its broad definition of “plan,” the proposed rule has been interpreted by some to 

include recommendations provided in connection with traditional welfare benefit plans 

like health, accident and disability insurance—plans that are not investment vehicles and 

thus do not logically fall within the realm of investment advice. Department officials 

confirmed at a meeting on May 20, 2015, and during a phone conversation on June 3, 

2015, that the Department does not intend to cover welfare plans that do not have an 

investment component (i.e., plans that are not designed to generate income or increase 

wealth) in this rule-making. The Council urges the Department to clarify this point and 

exclude non-cash-value welfare benefit plans from the final rule. 

The Department could achieve such clarification by adding a definition of “other 

property.” For example, the definition could read: 

“‘Other property’ for purposes of this section does not include non-cashvalue welfare benefit plans, such as health, accident, disability, and life 

insurance products, that do not generate income or create wealth for future 

use.” 

Alternatively, the term “investment” could be defined as follows: 

“‘Investment’ for purposes of this section does not include the purchase, 

sale, holding, or exchanging of non-cash-value welfare benefit plans, such 

as health, accident, disability, and life insurance products, that do not 

generate income or create wealth for future use.” 

In addition to these suggestions, there may be other ways for the Department to 

effectively carve out non-cash-value welfare plans from the rule. The Council strongly 

encourages the Department—by whatever means—to make clear that these plans are not 

covered under this rule-making. 

Thank you for your consideration. 

                                                      

1

 Proposed 29 CFR 2510.3-21(f)(2)(i). 

2

 29 U.S.C. § 1002(3). 
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Respectfully submitted, 

Ken A. Crerar 

 President 

The Council of Insurance Agents & Brokers 

701 Pennsylvania Avenue, NW 

Suite 750 

Washington, DC 20004-2608 

(202) 783-4400 

ken.a.crerar@ciab.com