COVER STORY 2020 VISION — OR REVISION?
“We have removed the gigantic, regulatory burden Americans have been forced to carry for decades, freeing our citizens to reach their highest potential.” said he prefers shoring up and saving the ACA over more liberal alternatives. The Biden plan contains a number of measures, such as a public option and tackling “surprise billing” and high prescription drug prices. While not ideal for health
insurers and agents, a Biden presidency would appear to forestall the “Medicare for All” momentum. Kaiser Family Foundation polling shows increasing public support for Obamacare. The foundation’s polling found that, in July 2014, 55% of voters opposed the law, while 36% favored it. By July 2020, that had flipped, with 51% favoring the law and 38% opposing it. Appointments. In many partisan quarters, the biggest power of the presidency comes via appointments. For financial services, who chairs the Securities and Exchange Commission is a big deal. Chair Jay Clayton’s term ends next year, and there’s been rumors that he wants to move on. In the bigger picture, the next president is likely to appoint one or two justices to the Supreme Court. The Trump circle made judicial appointments a central theme of his administration, giving
Off-Key Harmony?
This is where regulation of financial services stands after a major push from the Trump administration, with lobbying from industry groups, to establish a consistent, best-interest standard across regulatory bodies. If challenger Joe Biden is elected, he is expected to support a widespread fiduciary standard. State Insurance Regulations The National Association of Insurance Commissioners produced a model law supporting a best interest standard that contains four obligations: care, disclosure, conflict of interest and documentation. But the standard was not stringent enough for some states, leading New York and Massachusetts to adopt rules that track closer to a fiduciary standard. DOL Investment Advice Standard The Department of Labor rule carves out a prohibited transaction exemption allowing product sellers to be compensated for a sale involving ERISA-qualified money, as long as the sellers meet three criteria: a best interest standard, a reasonable compensation standard and no misleading statements. The rule revision under the Trump administration is less onerous on product sellers, particularly independent marketing organizations. A final rule is expected to be published by Dec. 31. SEC Regulation Best Interest The Securities and Exchange Commission rule requires broker-dealers to recommend financial products that are in their customers’ best interests and to clearly identify any potential conflicts of interest and financial incentives that benefit the broker. This is not the fiduciary standard that consumer advocates and many Democrats wanted. Enacted by President Trump’s appointed chairman and took effect June 30. 22
InsuranceNewsNet Magazine » October 2020
“Washington’s lack of regulations over a 20-to-30-year period led to the 2008-09 financial crisis. We knew our regulatory system was outdated.” conservatives an ideological edge in the courts. The Left will be looking for Biden to appoint a liberal justice if and when that opportunity should present itself.
A Second Term?
Despite Biden holding a consistently strong lead in the polls, analysts in the financial services world see a close election. In fact, Roame is predicting a Trump victory, adding that he has no strong conviction in that outcome. “This is the reason I’m guessing right now that Trump wins — because I think there’s a lot of Trump supporters who just don’t admit it,” Roame explained. “I think they’re out there, and they’re going to come out for the election.” In its assessment for clients, LPL Financial chief market strategist Ryan Detrick calls the election a toss-up. The margin of victory in the popular vote has been under 5% in four of the past five elections, he noted, and in two of those elections the outcome in the Electoral College differed from the popular vote. “A 5% difference is small enough that an election can easily swing one way or the other based on what happens in the months and weeks before the election,” Detrick wrote. “And there are scenarios in which even a 5% difference in the popular vote could mean a different outcome in the Electoral College.” I n s u r a n c e N ews N e t Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at john. hilton@innfeedback.com. Follow him on Twitter @INNJohnH.