Government Affairs Update

August 16, 2021


IRI Champion to Retire from Congress

Representative Ron Kind (D-WI) announced last week that he will be retiring from the House of Representatives at the conclusion of the 117th Congress. Representative Kind serves on the House Committee on Ways and Means and was one of the key architects of the Setting Every Community Up for Retirement Enhancements (SECURE) Act. His support and advocacy for the bill helped to shepherd it through committee to its adoption by the full House. Representative Kind is also playing an instrumental role in advancing the Securing a Strong Retirement Act (H.R. 2954). IRI awarded Representative Kind with its 2018 Champion of Retirement Security Award in recognition of his leadership in advancing bipartisan, common-sense retirement security legislation.

IRI President and CEO Wayne Chopus issued a press statement expressing appreciation and gratitude for Representative Kind’s work on retirement security. “We are grateful for Congressman Kind’s shared commitment to help workers, retirees, and their families build economic equity, strengthen financial security, and protect retirement savings and retirement income in ways that can sustain them throughout their well-earned golden years,” said Chopus. “We wish Congressman Kind well as he moves on to his next chapter at the conclusion of the 117th Congress.”

Any questions should be referred to Paul Richman.


Blueprint Proposal to Fund Adult Protective Services Advances in Congress

The Elder Justice Reauthorization and Modernization Act was introduced last week by House Committee on Ways and Means Chairman Richard Neal (D-MA), Senate Committee on Finance Chairman Ron Wyden (D-OR), Senate Special Committee on Aging Chairman Bob Casey (D-PA), and Elder Justice Caucus Co-Chair Suzanne Bonamici (D-OR). The bill authorizes $4 billion for programs aimed at protecting older and vulnerable workers and retirees, including $1.4 billion in support for state and local Adult Protective Services (APS) agencies and $400 million in grant funding to prevent elder abuse and financial exploitation. IRI submitted a letter supporting the bill, highlighting the call for the enactment of the bill in the 2021 Federal Retirement Security Blueprint. IRI issued a press statement in which IRI’s Chief Government and Political Affairs Officer Paul Richman said, “Financial abuse can erase a lifetime of savings and leave older workers and retirees in financial ruin. With the population of older Americans expected to double in size to nearly 84 million citizens by 2050, there needs to be a concerted effort to combat financial exploitation. […] IRI supports  increased protection to safeguard our elderly population from fraud, abuse, and exploitation.”

Any questions should be referred to John Jennings.


FINRA Issues Guidance to Firms on Supervisory Obligations Related to Outsourcing to Third-Party Vendors

Last Friday, FINRA issued Regulatory Notice 21-29, providing guidance to firms with respect to “Vendor Management and Outsourcing.” The purpose of the guidance was to remind firms of their own supervisory obligations with respect to operational, regulatory oversight and compliance issues. Specifically, FINRA’s guidance makes the recommendation for firms to have established policies and procedures in place, preferably written, with their third-party vendors and sub-vendors. The guidance notes an increase in the use of firms hiring third-party vendors with a correlating increase in securities, regulatory, and FINRA rules compliance obligations.

The guidance provides a list of FINRA rules for their member firms to consider with respect to development and maintenance of its supervisory system over its vendors. Some important FINRA rules highlighted in the guidance include Supervision (Rule 3110), Registration (Rule 1220), Cybersecurity (SEC Regulation S-P Rule 30), and Business Continuity Planning (Rule 4370).

Further, this Guidance provides FINRA’s exam observations and findings, specific and detailed findings on cybersecurity and technology governance, detailed reports on books and records (including Consolidated Account Reports), and additional questions for consideration.

While this Regulatory Notice 21-29 was issued as guidance and not rulemaking, it would be a valuable guide for members to review as it provides important information on maintaining a firm’s supervisory system with its third-party vendors and includes examples of disciplinary action that can result due to a lack sufficient oversight and management of the firm’s vendor relationship and compliance-related output.

Any questions should be referred to Emily Micale.

Superintendent Linda Lacewell Resigning From New York Department of Financial Services

Linda Lacewell announced her resignation as Superintendent of the New York Department of Financial Services, effective August 24. Superintendent Lacewell was seen as a close ally of Andrew Cuomo, and her departure coincides with his resignation as Governor of New York. IRI will look to get engaged with Ms. Lacewell’s successor once he or she is in place.

Any questions should be referred to Sarah Wood.

Connecticut Finalizes Best Interest Regulation

Connecticut recently became the 16th state to adopt a best interest regulation (Conn. Agencies Regs. §§38a-432a-1 – 38a-432a-8). The regulation, which closely aligns with the NAIC Suitability in Annuity Transactions Model Regulation, is effective as of March 1, 2022. Existing producers will have six months from the effective date to complete the required training. IRI will continue to monitor the adoption of the NAIC Model in other states.

Any questions should be referred to Sarah Wood.

Texas Proposes Rules Implementing NAIC Model Annuity Suitability Disclosure Forms

The Texas Department of Insurance (TDI) proposed new rules that would promulgate the disclosure forms from Appendix A, B, and C in the NAIC Suitability in Annuity Transactions Model Regulation. The rules specify that use of the NAIC Model disclosure forms meet the requirements under Texas’ best interest statute. TDI will also make its own forms available to satisfy the disclosure requirements. Written comments are due to TDI by September 27, 2021. IRI plans to submit comments in support of the proposed rules unless any significant concerns are brought to our attention.

Any questions should be referred to Sarah Wood.