The Insurance Federation of Pennsylvania, Inc.

500 North Third Street
3 Floor
Harrisburg, PA 17101
Tel: (717) 236-2301 Fax: (717) 236-0803

E-mail: mailbox@ifpenn.org

Jonathan C. Greer July 28, 2015
Vice President

Via Electronic Mail

Honorable Thomas E. Perez, Secretary
United States Department of Labor
200 Constitution Avenue, NW
Washington, D.C. 20210

Re: Proposed Fiduciary Rule

Dear Secretary Perez:

On behalf of the life insurer member companies of the
Insurance Federation of Pennsylvania, I write to express
our concerns with the US Department of Labor’s (DOL)
proposed rule to change the definition of a fiduciary under
ERISA.

We understand a second round of public comment will open
following a DOL hearing on this matter in August. Please
accept these comments as part of that process.

The Insurance Federation of Pennsylvania is a state-based
trade association representing foreign and domestic
insurance companies in nearly all lines of insurance.
This proposed rule raises serious concerns within our life
insurer membership and could affect the future viability of
certain financial products, especially annuities.

The reasons for this are many and all stem from the
proposed rule’s apparent distrust of commission-based
compensation. We disagree with this premise and see no


July 28, 2015
Page two

value in undermining the broker/dealer model. There is
broad industry consensus that such an approach will
dramatically curtail the availability of products designed
for small to medium sized investors. This is due to the
unworkable nature of proposed rule’s Best Interest Contract
Exemption (BICE).

According to a survey conducted by the National Association
of Insurance and Financial Advisors (NAIFA), two thirds of
respondents said they would be intimidated or unwilling to
sign such a contract due to its burdensome data retention
and disclosure requirements. This, along with increased
liability exposure, will result in fewer choices for
consumers at a time when the need for specialized financial
services - especially those for retirement planning - are
increasingly profound.

In this sense, we believe the proposed rule’s attempt to
protect consumers will actually harm them through a
limiting of choices and options.

We would also like to echo the NAIC’s sentiments in its

letter to you dated July 21, 2015: Oversight of the
retirement plans marketplace is a shared regulatory
responsibility. In that sense, we believe a DOL rule in

this area should be in harmony with the existing federal
and state regulatory framework that has stood the test of
time.

For example, the NAIC already has in place a model to
ensure companies and their producers act in the best
interests of consumers. This is the central premise of the
NAIC Suitability in Annuity Transactions Model Regulation,
versions of which have been adopted in 47 states (including
Pennsylvania) along with the District of Columbia. The
creation of this model and its subsequent adoption
throughout the country has been strongly supported by the
life insurance industry and is demonstrative of our desire
to work in tandem with the regulatory community to best
serve the needs of consumers.


July 28,

2015

Page three

Thank you in advance for your consideration of these
thoughts. We,
forward to continued dialogue on this initiative.

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along with our member companies, look

Sincerely,

OF)

onathan C. Greer

Robert P. Casey, Jr.
Pat Toomey

Lou Barletta
Brendan Boyle
Robert Brady
Matthew Cartwright
Ryan Costello
Charles Dent

Mike Doyle

Chaka Fattah
Michael Fitzpatrick
Mike Kelly

Tom Marino

Pat Meehan

Tim Murphy

Scott Perry

Joseph Pitts

Keith Rothfus

Bill Shuster

Glenn Thompson

American Council of Life Insurers