January 28, 2022

Volume XII, Number 28

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Talking Through the DOL’s Proposed Prohibited Transaction Exemption: An Insurance Podcast [PODCAST]

On June 29, the Department of Labor (DOL) issued a proposed prohibited transaction exemption, filling the void left when the Fifth Circuit vacated the Obama-era 2016 DOL regulation in 2018. While the new proposed rule is primarily a class exemption that harmonizes ERISA conditions for receiving commissions and other variable compensation with existing securities law standards, it also does a lot more. In the first installment of a new podcast series, Faegre Drinker’s Jim Jorden and Brad Campbell dive into the details of this new proposed rule and the issues it presents for insurance producers, carriers and intermediaries.

In this recording, Jim and Brad provide context, insight and actionable advice for stakeholders on the following questions (and more) related to the DOL’s proposed exemption.

  • What is the most important change proposed in this new prohibited transaction exemption?

  • Under the new proposed fiduciary rule, more rollover recommendations may now be viewed as fiduciary advice. How does the DOL support this new interpretation? What issues does the revised analysis pose for insurance producers, carriers and intermediaries?

  • The new class exemption permits reasonable compensation for financial institutions (banks, insurance companies, RIAs and BDs) and investment professionals (employees, agents and representatives of financial institutions licensed under federal or state laws) who make investment recommendations as ERISA fiduciaries to retirement investors (plan or IRA fiduciaries, participants or beneficiaries). It also permits certain principal transactions. What conditions must be met for parties to receive the benefit of the exemption?

  • How might the obligations proposed under the new exemption with respect to insurance company sales review, supervision and compliance be implemented?

  • How long do stakeholders have to comment on this proposed rule?

In our second podcast next week, we will get into the details of what’s being imposed on both the life insurance and brokerage industries.

© 2022 Faegre Drinker Biddle & Reath LLP. All Rights Reserved.National Law Review, Volume X, Number 184
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About this Author

James F. Jorden Securities Litigation Drinker Biddle Law Firm
Partner

James F. Jorden represents many of the country’s largest financial institutions in securities, corporate, and pension litigation. He is experienced in national class action litigation, having served as lead or associate counsel in more than 100 securities, insurance, RICO, and other class actions. Over the past 20 years, Jim has been lead trial counsel in more than 50 individual cases in federal and state courts throughout the United States. He has argued before the United States Supreme Court, eight of the U.S. circuit courts, and numerous state courts of...

202-230-5228
Bradford Campbell Labor & Employment Attorney Faegre Drinker Biddle & Reath Washington, D.C.
Partner

Bradford Campbell is a nationally recognized figure in employer-sponsored retirement plans who leverages his prior experience as the U.S. Assistant Secretary of Labor for Employee Benefits to advise clients across a broad range of issues related to the Employee Retirement Income Security Act (ERISA). As ERISA’s former “top cop” and primary regulator, Brad has detailed and wide-ranging knowledge of the structure and operation of ERISA plans, insight that he applies to client engagements.

Brad advises financial service providers and plan sponsors, particularly in relation to ERISA...

202-230-5159
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