Government Affairs Update

September 20, 2021


Chairman Neal to Speak at IRI’s 2021 Annual Conference

IRI is pleased to announce that House Ways and Means Committee Chairman Richard Neal (D-MA) has been added as a speaker at IRI’s upcoming 2021 Annual Conference. As the Chairman of the Ways and Means Committee, Representative Neal will offer his outlook for legislation to help America’s workers and retirees achieve economic equity, strengthen their financial security, and protect their income to sustain them throughout retirement – including the Automatic Retirement Plans Act and the Securing a Stronger Retirement Act. Chairman Neal will join Senate Finance Committee Chairman Ron Wyden (D-OR) and Senate Finance Committee Ranking Member Mike Crapo (R-ID) at 3:15 p.m. ET on September 28.

To register for IRI’s 2021 Annual Conference, click here.

Ways and Means Advances Reconciliation Revenue Raisers

On September 15, the House Committee on Ways and Means concluded its 4-day markup by voting to advance revenue raisers necessary to fund the provisions of the reconciliation bill. Subtitle I, Part 3 of the Reconciliation Bill would raise the corporate tax rate from 21 percent to a max of 26.5 percent. The Subtitle also raises the top individual tax rate to 39.6 percent, and a 3 percent surtax would be imposed on individuals with adjusted gross income over $5 million. Additionally, the top rate on capital gains would increase from 20 percent to 25 percent. It is estimated that the new proposals would raise $2.9 trillion in revenue when combined with $700 billion in revenue and cost savings from Medicare drug price changes. To fully pay for the president’s plan, the proposal factors in $600 billion from the estimated economic growth effects of the spending increase. The proposal would also raise an estimated $16 billion by limiting deductions for executive compensation and $96 billion from higher taxes on tobacco and nicotine products, including e-cigarettes.

Following an initial review of Subtitle I, Part 3, IRI flagged proposals of interest to the insured retirement industry. IRI has shared its initial review with members of its Government Affairs Advisory Committee, as well as with the joint trades, to begin a coordinated effort in response to the proposals.

Any questions should be referred to Paul Richman.



Senator Smith Urges Gensler to Create a RILA Registration Form

Last week, Chairman of the Securities and Exchange Commission, Gary Gensler, appeared before the Senate Committee on Banking, Housing, and Urban Affairs for an oversight hearing. During the hearing, Senator Tina Smith (D-MN) pressed the Chairman on pursuing the development of a new registration form for Registered Index Linked Annuities (RILAs). Senator Smith highlighted the challenges facing associated with a lack of tailored registration forms, including disclosures that contain “a bunch of information that actually isn’t that useful to investors as they’re trying to find the information that really matters.” Senator Smith noted her introduction of the Registration for Index Linked Annuities Act (RILA Act) and the Consumer Federation of America’s support for the bill. Chairman Gensler responded that he was looking forward to working with Senator Smith’s staff about the “potential of doing” a form for RILAs.

The IRI-led RILA task force continues to meet with congressional offices to educate them on the value of a RILA-specific form and requesting cosponsors for the RILA Act.

Any questions should be referred to John Jennings.

Consumer Data Privacy to be Examined by House Financial Services Committee

On September 21 at 10:00 a.m. ET, the House Committee on Financial Services’ Task Force on Financial Technology is scheduled to hold a hearing entitled “Preserving the Right of Consumers to Access Personal Financial Data.” According to the notifying memo, the hearing is intended to explore “recent developments in the data sharing fintech ecosystem.” Providing testimony are:

  • Tom Carpenter, Director of Public Affairs, Financial Data Exchange
  • Raul Carrillo, Associate Research Scholar, Yale Law School; Deputy Director, Law & Political Economy Project
  • Kelly Thompson Cochran, Deputy Director, FinRegLab
  • Chi Chi Wu, Staff Attorney, National Consumer Law Center
  • Steve Smith, CEO & Co-Founder, Finicity

IRI will monitor the hearing and provide any necessary updates.

Any questions should be referred to John Jennings.



Idaho Releases Bulletin Addressing Annuity Disclosure Forms

On September 10th, the Idaho Department of Insurance released Bulletin No. 21-05, which promulgates Appendices A, B, and C from the NAIC Suitability in Annuity Transactions Model Regulation.

This Bulletin also supersedes and replaces Bulletin No. 20-11, and clarifies that the Idaho-specific  Annuity Disclosure attached to Bulletin No. 20-11 is no longer required. Rather, the requirements for annuity contract disclosures now appear to closely align with the NAIC Annuity Disclosure Model Regulation. IRI believes this to be a positive development but is soliciting feedback from members to ensure that this is the case.

Any questions should be referred to Sarah Wood.

SEC’s Issues RFI and Call for Comments on Digital Customer Engagement Practices

The SEC has issued a Request for Information (RFI) and Public Comments, seeking input on digital customer engagement practices. The SEC issued the RFI along with a Press Release and Fact Sheet, requesting comments to be submitted on or before October 1, 2021. The RFI is related to matters involving broker-dealers and investment advisers use of “digital engagement practices” or “DEPs”, including behavioral prompts, differential marketing, game-like features (commonly referred to as “gamification”), and other design elements or features designed to engage with retail investors on digital platforms (e.g., websites, portals and applications or “apps”), as well as the analytical and technological tools and methods used in connection with these digital engagement practices; and, investment adviser use of technology to develop and provide investment advice.

Further, we noted the very short comment period set forth for this RFI, with comments due October 1st. We are reaching out to our fellow trades to work with them in seeking an extension of time for the submission of comments.

The RFI covers several issues of importance to IRI members, including, for example, whether “The use of a DEP by a broker-dealer may, depending on the relevant facts and circumstances, constitute a recommendation for purposes of Reg BI. Whether a ‘recommendation’ has been made is interpreted consistent with precedent under the federal securities laws and how the term has been applied under FINRA rules”. Of course, IRI has long been engaged in advocacy for Reg BI, but our members remain very cautious as to any potential expansion of what constitutes a “recommendation” for standard of conduct purposes, across the regulatory spectrum.

The RFI provides an opportunity for IRI to engage with the SEC on these important matters, and could help to advance some of our e-commerce initiatives, our Ops and Tech guiding principles, and our long-term regulatory priorities, such as the development of an e-delivery rule by the SEC.

Any questions should be referred to Emily Micale.