The Department of Labor (DOL) is readying for an avalanche of industry criticism on its fiduciary rule proposal during a two-day public hearing that kicks off Tuesday.
The DOL has said the hearing will start at 9 a.m. both Tuesday and Wednesday, be held via WebEx, and continue Dec. 14 if needed. Requests to testify at the hearing were due at the DOL by Nov. 29.
“The Department will organize the hearing into several moderated panels,” the DOL said last month. “Presenters will be given 10 minutes to testify, and they should be prepared to answer questions regarding their testimony. EBSA may limit the number of presenters based on how many testimony requests it receives.”
The DOL released its latest fiduciary rule attempt on Halloween, with President Joe Biden joining for a press conference to denounce “junk fees.” The rule was widely criticized by industry trade groups who claim the extension of fiduciary duty to virtually anyone recommending an annuity would have a chilling effect on advice to middle-market savers.
Meanwhile, the government continues to accept public comments on the DOL proposal. As of Friday, Regulations.gov reported 4,041 comments. Forty-five comments had been vetted and published as of 5 p.m. Friday.
The DOL posted a full two-day agenda of presenters on Thursday.
Tight schedule criticized
The only comments made public so far are all requests to provide testimony at the public hearing. Many are from industry trade associations, who are aggressively opposing the rule effort and have taken issue with the DOL’s refusal to extend the comment period, or make comments available before the hearing.
Some of the writers requesting to testify expanded on their comments to register these complaints.
“We remain extremely troubled and disappointed by the Department’s refusal to grant the reasonable request by [the Insured Retirement Institute] and 17 other financial services industry organizations to extend the comment period regarding the Proposal and to postpone the hearing until sometime after the comment period closes, as has been the Department’s longstanding custom,” wrote Jason Berkowitz, chief legal and regulatory affairs officer for IRI.
Groom Law Group represents several clients opposed to the rule effort. The law firm noted that Assistant Secretary of Labor Lisa Gomez had asked groups to take a close look at the proposal and acknowledged that “there have been so many changes since the last rule came out.”
“In the past, hearings were an opportunity for the public to provide feedback that was related to other commenters’ submissions,” Groom added. “However, for this hearing, it appears that the public will have limited time to review other commenters’ submissions.”
DOL: We know what you have to say
When the 2010 fiduciary rule was released, DOL initially had a 90-day comment period, followed by a 14-day extension. DOL then held a public meeting, followed by a 15-day comment period for response.
The 2016 fiduciary rule was accompanied by a 75-day comment period and a 15-day extension. After a public hearing, there was then another 15-day comment period.
Kevin Walsh is a principal at Groom. He explained the department’s logic in shortening the comment period during a recent webinar hosted by the National Association for Fixed Annuities.
“The Labor Department sent a letter to the trades saying, ‘Look, we’ve consulted with you for the last 13 years. We kind of know what you have to say,'” Walsh said. “So there’s a tight timeline. It’s going to be very important to get comments on the record.”
InsuranceNewsNet Senior Editor John Hilton covered business and other beats in more than 20 years of daily journalism. John may be reached at firstname.lastname@example.org. Follow him on Twitter @INNJohnH.
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