Although the new U.S. administration has thrown the U.S. fiduciary rule into limbo, a "significant portion" of the changes the insurance industry has made in response to the rule — including changes to their product lineups, distribution strategies and compensation models — "will remain in place," according to a new report from Fitch Ratings Inc.
The U.S. Department of Labor (DOL) recently delayed the implementation of its fiduciary to review and reconsider the impact of the new rules, which were due to take effect in April, on the availability of certain products and financial advice, among other things.
Yet, the Fitch report points out that "insurers selling affected products have made various changes to their distribution strategies and compensation structures and have developed new products that comply with [new rules]."
Furthermore, the report suggests that some of these changes will remain, regardless of the outcome of the review, as insurers have "invested meaningful resources" over the past year in preparation for the new rules.
It's likely that the final rule will be revised in response to the review, the Fitch report says: "The changes may be considerable in terms of the definition of fiduciary investment advice or products covered, … although the extent of such revisions is difficult to predict."