As Congress returns to work this week, a number of issues impacting the insurance and financial services industries are expected to be evaluated. First, on Thursday, September 10, two House subcommitees will hold a hearing about the Department of Labor’s proposed fiduciary rule, which seeks to define who is a fiduciary of an employee benefit plan under ERISA as a result of giving investment advice to a plan or its participants or beneficiaries. The rule is expected to dramatically impact the annuity and insurance industries, as it may potentially turn every communication made to a plan or its participants into a fiduciary communication. A number of large players in the industry have publicly expressed concern about the impact the proposed rule would have on their businesses, as well as their existing and potential clients.
In other insurance related news, there is reportedly pressure to reignite state-based insurance regulation and attach it to the international regulatory standards bill introduced by Congressman Sean Duffy’s proposed International Insurance Standards Transparency and Policyholder Protection Act (“IISTPPA”). The IISTPPA as proposed would require the Federal Insurance Office (“FIO”) to seek advice and recommendations from outside experts in performing its duties. Additionally, it would require regulators working on international insurance regulatory frameworks to support standards designed solely for policyholders’ protection.
Additionally, Congress is expected to receive notice from the FIO about its work on so-called “covered agreements” with the E.U. on reinsurance collateral, group supervision and confidentiality matters this fall. Such covered agreements, which were previously analyzed on this blog (click here), may allow the U.S. with equivalence under Solvency II for five years.