Just want to make sure you have all the details needed for the upcoming transition period starting June 9th this is what we've been told from the Insurance Carriers:
First-the Days of only having one product in your back pocket is gone, it was never a great to do business anyway as you cannot fit every square peg into a round hole. We work with over 40 Life and Annuity carriers, we have the products/solutions to fit your client's needs.
Second -Do Not listen to the Marketing pitches that are going on out there. You do Not need to transition to running everything through a software program to analyze client risk. You do Not need to worry about replacing your E&O policy because "they won't cover DOL Fiduciary Rules". We called a few E&O providers and was told the same thing "As long as your current E&O covers Fixed and Index Annuities, it will cover the DOL Fiduciary aspect as well. The agents that only own the basic E&O that only covers Health Products, those guys were never covered to sell Annuities in the first place and it's time to upgrade your E&O policy. If you have questions about your E&O, call your E&O provider.
You can count on the fact that almost every carrier in the business will have updated suitability forms that will go into effect 6/9/17. These suitability forms will be built into the application packages you get from the carrier websites, so make sure you throw away unused paper applications you have sitting on the shelf in your office.
In the following Link to my GoogleDocs - DOL Sample Forms, there are several different versions of the PTE 84-24. These are all generic forms that the carriers are providing, you do not have to use a specific form for the specific carrier you are writing the application with. This form PTE 84-24 needs to be completed, signed/dated by the client, and kept in the client file for EVERY SINGLE PIECE OF QUALIFIED BUSINESS YOU WRITE. This includes IRA to IRA transfers, 401K/403b rollovers, etc… And it's to be used for both Annuities and Life policies that are being funded with Qualified Money.
Between 6/9/17 and 12/31/17, this is considered the Temporary Transition period in which filling out the PTE 84-24 and keeping better client files is going to be the only real change to your business. Everything else, from writing business and submitting business (both Qualified and Non-Qualified) will be Business as Usual for you. After 1/1/2018, there may be an additional twist on who signs off on you submitting your Qualified Business. We have the systems in place to allow you to streamlessly continue to produce business, but NAFA (National Association of Fixed Annuities) continues to fight these new DOL rules in court and things could change again by the 1/1/2018 timeframe. Stay tuned as we will update you when things change, we are part of the biggest IMO production groups in the industry so we are aware of the changes and what it's going to take to be compliant.
Bottom line is this; to fulfill the minimum requirement for DOL right now keep a copy of the PTE 84-24 in your client file (for Qualified cases), fill out the new versions of suitability that the carriers are building into their application packages, and do what's right by the client. Moving forward, if you want to build your business in the direction the industry is heading, you may want to change your sales process a little.
Follow a sales process (Keep your client records in case you get audited):
84-24 form (Do not send to carrier, keep in own file)
Keep files for 6+ years
Submit business as usual. Directly to the carrier, or new business like you currently do.
The goal of the Transition Period is to begin to integrate parts of the Rule into our practices while we all build to full compliance with the Rule January 1, 2018
84-24 exemption and disclosure
We will assume you will use the 84-24 exemption to receive commissions on qualified business.
We created a generic 84-24 Model Disclosure that's available for you to use with clients; this template and a cover letter are attached for your reference and use.
**If you would like to take a training course on the DOL changes, both REGED and LIMRA have classes right now the links are listed above. We hosted a Webinar and Recorded it, regarding the DOL transition rules. To listen to it, here you go. DOL Fiduciary Rule Webinar -6-5-17
If you have any questions or concerns, please reach out to us. We are here to help you get the answers you need.