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.
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.