The consequences of failing to comply with the fiduciary standards and the PTE conditions are significant, he said. “If the fiduciary duties of care and loyalty are breached and the conditions of the PTE not satisfied, it can result in damages for breach and a loss of the agent’s compensation for failure to comply with the PTE’s conditions,” he said.
“The DOL is working on updating 84-24 to include some of the conditions in PTE 2020-02. It is likely that more responsibility will be placed on insurance companies in that new rule. We can expect to see a proposal in six to nine months,” Reish added.
The DOL did not immediately respond to a request for comment.
The attorney also suggested that “someone, perhaps the insurance industry trade associations, should take leadership in educating agents about the fiduciary and prohibited transaction issues.”
Diane Boyle, senior vice president for government relations for the National Association of Insurance and Financial Advisors (NAIFA), said, “We strongly encourage agents and advisors to seek and follow guidance from the financial institutions they work with to ensure compliance.”
In the meantime, Boyle said, “NAIFA frequently provides our members and the full agent-advisor community with updates and educational resources, including newsletter articles, blog posts, and webinars, on laws and regulations that impact their practices and clients.”