Two more industry groups file lawsuits against the DOL fiduciary rule

Today's complaints against the Labor Department regulation raising retirement advice standards, bringing the total to five, say it will make it harder for Americans to purchase fixed annuities

Jun 9, 2016 @ 11:28 am

By Tanvi Achayra

The list of lawsuits against the Labor Department got longer Thursday, as two more industry groups joined three others in taking aim at the fiduciary rule in court. The rule requires advisers to retirement accounts to act in the best interests of their clients.

The Indexed Annuity Leadership Council, Life Insurance Company of the Southwest, American Equity Investment Life Insurance Company, Midland National Life Insurance Company and North American Company for Life and Health Insurance filed a claim in the U.S. District Court for the Northern District of Texas — the third group to file in this particular court, which has ruled against other DOL regulations over the last year.

(More: Everything you need to know about the DOL fiduciary rule as it develops)

In this suit, the groups are asking the court to enjoin, or prohibit, the rule.

Also today, insurance agency Market Synergy Group filed a separate claim in the U.S. District Court for the District of Kansas. It seeks an injunction to stop the rule.

Both claims call the rule “arbitrary” and “capricious,” as do previous lawsuits.

The groups also argue that the DOL has no authority to enact such a rule, and that it could end up hurting retirees by restricting their access to instruments like fixed annuities, which can provide an income stream in retirement. This regulation makes it difficult to take advantage of those products, according to the IALC.

"Unfortunately, the final DOL regulation unfairly targets certain types of fixed-annuity products, making it harder for Americans to purchase fixed-indexed annuities when it is in their best interest to do so," said Jim Poolman, executive director of IALC, in a release.

Labor Secretary Thomas Perez has vowed to vigorously defend the rule, which he says protects workers and retirees from investment advice touting high-fee products that enrich the adviser to the detriment of clients' retirement savings.


What do you think?

View comments

Recommended for you

Sponsored financial news

Featured video


What's the first thing advisers should do when they get home from a conference?

After attending a financial services conference, advisers can be overwhelmed by options, choices and tools. What's the first thing they should do when they get back to their office?

Latest news & opinion

Speculation mounts on whether others will follow UBS' latest move to prevent brokers from leaving

UBS brokers must sign a 12-month non-solicit agreement if they want their 2017 bonuses.

Maryland jumps into fiduciary fray with legislation requiring brokers to act in best interests of clients

Legislation requires brokers to act in the best interests of clients.

8 apps advisers love for getting stuff done

Smartphone apps that advisers are using in 2018 to run their business more efficiently.

Social Security underpaid 82% of dually entitled widows and widowers

Agency failed to tell survivors that they could switch to a higher retirement benefit later.

Is Fidelity competing with retirement plan advisers?

As the Boston-based mutual fund giant expands the products and services it brings to the retirement market, some financial advisers say the firm is encroaching on their turf.


Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting It'll help us continue to serve you.

Yes, show me how to whitelist

Ad blocker detected. Please whitelist us or give premium a try.


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print