FACC’s number one concern is that we believe best interest amounts to a fiduciary duty. We know the working group thinks there is something “more than suitability and less than fiduciary,” but we think that defies common sense when best interest is the essential building block of fiduciary duty. Best interest will ultimately need to be interpreted by the courts and in the final analysis “best” will mean best. Any requirement that agents put their client’s interest first – in a legal sense – is tantamount to a fiduciary duty which everyone seems to agree should not apply to insurance agents.
Our other paramount concern – as we have stated in previous comment letters – is that the rule is too subjective because it is built around an undefined term “best interest” which is a nebulous concept that insurance agent interests may not be placed ahead of client interests and lacks concrete details on what agents must do in order to comply. The lack of objectivity in critical areas of the regulation is troublesome because without that objectivity it will be very difficult for producers to comply, carriers to supervise, and regulators to enforce fairly and consistently.
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