February 3, 2011 

VIA ELECTRONIC MAIL – e-ORI@dol.gov

Office of Regulations and Interpretations 

Employment Benefits Security Administration 

Attn: Definition of Proposed Fiduciary Rule 

Room N-5655 

United States Department of Labor 

200 Constitution Avenue NW 

Washington, DC 20210 

Re: Definition of Fiduciary Proposed Rule, RIN 1210-AB32 

Ladies and Gentlemen: 

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

comment on the Department’s proposal to revise the definition of fiduciary under Section 3(21) of 

the Employee Retirement Income Security Act (ERISA).1

 The Council is a trade association 

representing the nation’s leading commercial insurance agencies and brokerage firms, which 

specialize in a wide range of insurance products and risk management services for business, 

industry, government, and the public. Operating both nationally and internationally, Council 

members conduct business in more than 3,000 locations, employ more than 120,000 people, and 

annually place more than 80 percent – well over $200 billion – of all U.S. insurance products and 

services protecting business, industry, government and the public at-large. Council members also 

place the majority of U.S. employee benefit insurance products and provide a range of insurancerelated consulting and administrative services. 

One of the key roles our members play is in assisting tens of thousands of employer-based 

health and welfare insurance plans and voluntary benefit programs of all sizes, covering millions of 

American workers, to obtain the health and welfare benefits coverages they and their employees 

need and want at a cost they both can afford. 

Accordingly, we are concerned about the scope of the definition of fiduciary in the proposed 

rule, and whether the definition could be interpreted to impose fiduciary status on any insurance 

agent or broker who provides assistance to group health plans without regard to nature of the 

services involved. Such an interpretation would be inconsistent with the definition of fiduciary 

under ERISA Section 3(21),2

 and it is unclear whether the Department intended such a result. 

Therefore, we seek clarification of the scope of the proposed definition. 

 Proposed Rule, Definition of the Term “Fiduciary,” 75 Fed. Reg. 65263 (Oct. 22, 2010) (hereafter “Request 

for Com

render investment advice for a fee, or have discretionary 

1

ments”). 

2

 The definition of fiduciary in ERISA Section 3(21)(A) requires that an entity have either discretionary 

authority or control over a plan’s assets or management, 
Office of Regulations and Interpretations 

Employment Benefits Security Administration 

page 2 

 

The proposed rule, which addresses the specific context of providing investment advice for a 

fee under ERISA Section 3(21)(A)(ii), employs undefined terminology that ultimately makes the 

scope of fiduciary status unclear. The preamble of the proposed rule references the Department’s 

desire to “protect the beneficiaries of pension plans and individual retirement accounts by more 

broadly defining the circumstances under which a person is considered to be a ‘fiduciary’ by reason 

of giving investment advice.”3 However, the text of the proposed rule would apply to service 

providers assisting “employee benefit plans,” which includes health and welfare plans as well as 

pension plans. Such service providers are deemed to render “investment advice” that would make 

them fiduciaries if they make “recommendations as to the advisability of investing in, purchasing, 

holding, or selling securities or other property,” or if they provide “advice or make[] 

recommendations as to the management of securities or other property.”4

 Since the term “other property” is neither defined in the regulation nor explained in the 

preamble, the Council is concerned that the proposed regulation could be read to impose fiduciary 

status on a service provider assisting a health and welfare plan, such as a group medical insurance 

plan, by making recommendations as to the advisability of purchasing a health insurance policy, for 

example.5

 Given that the relevant statutory language focuses on rendering “investment advice,” 

recommendations or advice not associated with investments – and a health policy is not an 

investment vehicle – should not be covered by the rule. It is not clear whether the Department 

intended for “investment advice” to be interpreted so broadly as to encompass the typical situation 

involving an insurance agent or broker merely advising a group health plan about health insurance 

coverage. We believe the proposed regulation should be clarified to avoid this anomalous result by 

defining “other property” to specify that it does not refer to property purchased for non-investment 

purposes, such as medical insurance or other health and welfare insurance products. 

 The Council appreciates this opportunity to comment on the Department’s proposed rule 

defining fiduciary in the context of rendering investment advice. We urge the Department to define 

the term “other property” in the rule to make clear that the rule does not make insurance producers 

or other service providers fiduciaries merely because they have provided advice or 

recommendations regarding property not purchased for investment purposes, such as health and 

welfare benefits insurance. The Council stands ready to provide you with any additional 

information or assistance that may be helpful. 

authority or responsibility for administration of the pl . Insurance agents and brokers acting as intermediaries for 

welfare plans typically do not satisfy any of these tests. 

an

3 Id. at 65263. 

4 See proposed rule subsections (c)(1)(i)(A)(2) & (3) (emphasis added). 

5

 It should be kept in mind that while insurance agents and brokers are typically not ERISA fiduciaries with 

respect to health plans, the relationship between agents and brokers and their health plan clients is governed by a welldeveloped body of state law, which makes clear that the contract between the parties dictates the scope of the 

obligations owed. 
Office of Regulations and Interpretations 

Employment Benefits Security Administration 

page 3 

Respectfully submitted, 

Ken A. Crerar 

 

ts & Brokers 

a Avenue, NW 

Suite 750 

Washington, DC 20004-2608 

(202) 783-4400 

President 

The Council of Insurance Agen

701 Pennsylvani