Overview of DOL Fiduciary Rule

Effective June 9, 2017:

The new definition of who is a “fiduciary” under ERISA will go into effect on 6-9-2017:If you make a recommendation about qualified funds and receive direct or indirect compensation, you are a fiduciary.

Under the new definition of PTE 84-24 for 6/9/17 – 12/31/17:

  1. Explicitly required to adhere to Impartial Conduct Standards, disclose material conflicts of interest, retain records for at least 6 years, and disclose writing agents’ compensation as percentage of premium and have client acknowledge receipt.
  2. Implicitly required to have policies and procedures to meet Impartial Conduct Standards, have training to meet Impartial Conduct Standards, document conflicts of interest, and document reasonableness of compensation and prudence of product shelf.
  3. Financial Institution is not required under PTE 84-24.

Under the new definition of BICE for 6/9/17 – 12/31/17:

  1. Explicitly required to adhere to Impartial Conduct Standards and have a Financial Institution.
  2. Implicitly required to disclose material conflicts of interest, retain records for at least 6 years, have policies and procedures to meet Impartial Conduct Standards, have training to meet Impartial Conduct Standards, document conflicts of interest, and document reasonableness of compensation and prudence of product shelf.
  3. Not Required for BICE: Disclose writing agents’ compensation as percentage of premium and have client acknowledge receipt.

Selling/Agent Agreement Amendment: This amendment to your agreement with us explains that we are not a fiduciary or a ‘financial institution’ and that if you make a ‘recommendation’ then you have the obligation to comply with the Fiduciary Rule.

  1. For agents: Unless you object in writing within 30 days, this amendment will become a part of your agreement with us, and your submission of business after the date of the amendment will indicate your assent to these terms. If you have any questions, contact your Regional Sales Vice President or Larry Silverstein.
  2. For Broker Dealers, please sign the amendment and fax to 513-362-2474 or email to .

Qualified /Non-Qualified Form: Beginning on June 9, 2017, we will require that all new applications (except term, accident, and critical illness) be accompanied by a form indicating whether the sale is qualified or non-qualified, as defined by the DOL. This form must be signed by the agent to certify that either the sale is non-qualified or that the agent complied with the Fiduciary Rule and the terms of an exemption.

PTE 84-24 Disclosure: To assist with your compliance efforts, we have a website where you can access a PTE 84-24 disclosure for our products with compensation and product information pre-populated. To meet the terms of PTE 84-24, you will also need to disclose your material conflicts of interest.

Training
We recommend that you receive training regarding your obligations as a fiduciary and how to comply with the terms of a prohibited transaction exemption. We will provide training on how to complete qualified business with us via webinars during May and June 2017.

Wholesalers & RVPs
Commencing on June 9, 2017, our wholesalers & RVPs will no longer be permitted to engage in direct communication with consumers either in person or over the phone. Our wholesalers & RVPs can still assist you and your producers with questions regarding products.

For IMOs & BDs.