The roughly 350 independent marketing organizations thatdistribute fixed indexed annuities will need considerable cash onhand to operate as financial institutions under the Labor Department’s fiduciary rule.
Labor released a proposed class exemption that would qualifyIMOs as financial institutions under the rule’sBest Interest Contract Exemption. The financialinstitution designation is required to sell commission-basedinvestments like FIAs to IRA investors.
As proposed, the exemption requires IMOs to have sold at least$1.5 billion in FIA premiums in each of the last three fiscalyears.
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