This week, the Big “I” once again submitted testimony at a hearing on Capitol Hill that focused on a recent proposal from the U.S. Department of Labor (DOL) to overhaul the definition of a fiduciary under the Employee Retirement Income Security Act (ERISA).

The U.S. Senate Committee on Health, Education, Labor and Pensions, Subcommittee on Employment and Workplace Safety held the hearing, entitled “Restricting Advice and Education: DOL’s Unworkable Investment Proposal for American Families and Retirees.” The association’s comments focus on the negative effect implementing the DOL fiduciary proposal in its current form would have on insurance agents and the customers they serve.

Labor Secretary Thomas Perez testified in the hearing’s first panel, using the opportunity to point out a sentiment shift within the industry, with many stakeholders accepting the creation of a universal “best interest standard.” He also tried to argue that the debate now focuses on a workable solution for compliance with a uniform fiduciary rule. Perez went on to tell Congress he was open to engaging with all stakeholders on ways to implement a workable “best interest standard.”

Despite the Secretary’s comments, the complex and confusing DOL proposal continues to face harsh criticism from many industry representatives, including the Big “I,” as well as members of Congress. For example, Subcommittee Chairman Johnny Isakson (R-Georgia) expressed his concern that “the proposed rule could make it harder to deliver the retirement advice that many Americans need.” He went on to say, “The new rules would most limit the access to the advice for those people that need it most. I think this is a solution in search of a problem. We have heard that one-third of personal advisers would have to leave the business because of the rule."

Big “I” testimony reiterated similar views. Specifically, the association has repeatedly raised concerns that many main street businesses it represents will simply cease their investment advice-related operations given the uncertainty associated with such an ambiguous and subjective best interest standard. The proposal will almost certainly lead to higher compliance and insurance costs and increased liability exposure. As a result, this change will reduce the universe of qualified professionals willing to offer knowledgeable assistance and investment services to retail investors, particularly in the middle market.

At the hearing, Perez also said, “because the department has been flooded with comments on the proposed rule, it will extend the comment period and hold three days of public hearings next month to address concerns about how it is written.” The first public hearing is scheduled at the DOL on Aug. 10.

Jen McPhillips is Big “I” senior director of federal government affairs.