Court Rulings Delay Fiduciary Rule Implementation: What It Means for the Industry

We wanted to send an update regarding the Department of Labor’s Fiduciary Rule scheduled to take effect on September 23, 2024.
The industry has recently received favorable rulings in two lawsuits brought challenging the Rule. Over the weekend, in the case brought by the American Council of Life Insurers, the judge stayed the effective date of the rule until the case is decided on its merits and during any appeal. Previously, in the case brought by the Federation of Americans for Consumer Choice the judge stayed the effective date of the rule and amended Prohibited Transaction Exemption 84-24 until further order of the Court.
National Life Group welcomes these rulings, and we support the litigation challenging the rule. In both cases, the court noted that the industry is either “virtually certain to succeed on the merits” or “likely to succeed on the merits…” National Life Group is also encouraged that the Courts appreciate the value of commission-based products and are taking appropriate steps to limit the regulatory reach of the Department of Labor.
These rulings have the effect of suspending the September 23 effective date until further notice. We anticipate that the Department of Labor will appeal these rulings. While the implications of the decision and any appeal are still being analyzed, we expect this development to impact the timeline for operational changes this September. We continue to monitor the status of the Rule and the litigation and will keep you informed as we learn more.

Matt Frazee
EVP, Chief Marketing Officer