Knocked down twice by the D.C. District Court, the National Association for Fixed Annuities has filed an emergency motion asking the U.S. Court of Appeals for the D.C. Circuit to halt the rule while NAFA’s appeal proceeds.
Noting that “Nearly six critical months have passed since NAFA first sought a preliminary injunction to delay enforcement of the ‘fiduciary rule,’” NAFA urged the court to “preserve the status quo by staying the applicability date pending appeal.” Failing that, they claim that NAFA members will be “forced to accelerate irreversible, costly, and industry-altering actions in the weeks ahead to re-structure their entire distribution system, which has been in place for decades.”
The motion notes that NAFA members face “extraordinary challenges to comply with this flawed Rule, which was adopted improperly by DOL and foisted on the fixed annuity industry with a short time to comply,” and that it “inherently favors the securities industry, and the adverse impact on NAFA members is much more profound.”
Impact of New Administration
The motion goes on to claim that the “situation is even more unsettled due to the election of a new administration, which may consider delay or repeal of a Rule purposely designed to take effect in one administration but not to become ‘applicable’ until the next.”
Claiming that the stay is needed to “alleviate what can only be described as chaos in the fixed annuity industry,” the motion notes that in view of the fiduciary rule’s “profound impact, a post-litigation stay of as much as two years is warranted, but at a minimum NAFA seeks ten months.” NAFA says it is not seeking an expedited review on appeal, “because it would come too late absent an injunction; if an injunction is granted, expedited review would not be necessary.”
NAFA claims that the “district court side-stepped key issues,” that “there is a substantial likelihood the Rule will not survive appellate scrutiny,” that “there is a dire need for equitable relief” since NAFA members are being “decimated by distribution changes required by the Rule and will be unable to compete in a new world of regulation created by DOL that tilts unfairly in favor of the securities industry.”
No Harm?
In “stark contrast to the concrete harm facing the annuity industry, no real harm will result from delaying the applicability date,” the motion goes on to note that fixed annuities are “competently regulated” under state law. Moreover, “after DOL took six years to adopt the Rule, it cannot credibly contend that significant harm will be caused by a short delay pending appeal.”
“If the applicability date stands, NAFA members will be forced to carry out a massive overhaul to their distribution systems, resulting in permanent changes, great unrecoverable expense, and the prospect of only a Pyrrhic victory on appeal.”
Noting that “Nearly six critical months have passed since NAFA first sought a preliminary injunction to delay enforcement of the ‘fiduciary rule,’” NAFA urged the court to “preserve the status quo by staying the applicability date pending appeal.” Failing that, they claim that NAFA members will be “forced to accelerate irreversible, costly, and industry-altering actions in the weeks ahead to re-structure their entire distribution system, which has been in place for decades.”
The motion notes that NAFA members face “extraordinary challenges to comply with this flawed Rule, which was adopted improperly by DOL and foisted on the fixed annuity industry with a short time to comply,” and that it “inherently favors the securities industry, and the adverse impact on NAFA members is much more profound.”
Impact of New Administration
The motion goes on to claim that the “situation is even more unsettled due to the election of a new administration, which may consider delay or repeal of a Rule purposely designed to take effect in one administration but not to become ‘applicable’ until the next.”
Claiming that the stay is needed to “alleviate what can only be described as chaos in the fixed annuity industry,” the motion notes that in view of the fiduciary rule’s “profound impact, a post-litigation stay of as much as two years is warranted, but at a minimum NAFA seeks ten months.” NAFA says it is not seeking an expedited review on appeal, “because it would come too late absent an injunction; if an injunction is granted, expedited review would not be necessary.”
NAFA claims that the “district court side-stepped key issues,” that “there is a substantial likelihood the Rule will not survive appellate scrutiny,” that “there is a dire need for equitable relief” since NAFA members are being “decimated by distribution changes required by the Rule and will be unable to compete in a new world of regulation created by DOL that tilts unfairly in favor of the securities industry.”
No Harm?
In “stark contrast to the concrete harm facing the annuity industry, no real harm will result from delaying the applicability date,” the motion goes on to note that fixed annuities are “competently regulated” under state law. Moreover, “after DOL took six years to adopt the Rule, it cannot credibly contend that significant harm will be caused by a short delay pending appeal.”
“If the applicability date stands, NAFA members will be forced to carry out a massive overhaul to their distribution systems, resulting in permanent changes, great unrecoverable expense, and the prospect of only a Pyrrhic victory on appeal.”
- Log in to post comments