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Judge Rejects Request to Stop Fiduciary Rule

A federal judge rejected a request to immediately halt implementation of parts of the U.S. Department of Labor’s conflict-of-interest fiduciary rule. Judge Daniel D. Crabtree, of the U.S. District Court for the District of Kansas, refused to issue a preliminary injunction sought by Market Synergy, an insurance agency licensed in Kansas...
December 8, 2016

A federal judge rejected a request to immediately halt implementation of parts of the U.S. Department of Labor’s conflict-of-interest fiduciary rule. Judge Daniel D. Crabtree, of the U.S. District Court for the District of Kansas, refused to issue a preliminary injunction sought by Market Synergy, an insurance agency licensed in Kansas. The agency alleged the DOL’s rule-making violated the federal Administrative Procedure Act.

Market Synergy argued that the DOL violated regulatory procedures in promulgating the rule, which requires financial advisers to act in the best interests of their clients in retirement accounts. Judge Crabtree ruled that the firm failed to show that the DOL exceeded its authority or was capricious in its treatment of fixed indexed annuities. He also said that the rule would not cause irreparable harm to the insurance sales model.


“The DOL fiduciary rules may make professional advice too expensive for millions of households and small businesses,” said PIA National Vice President of Government Relations Jon Gentile. “In addition, the increased liability exposure for advisers would also increase the cost of services, causing some advisers to exit the market entirely or discontinue services for smaller accounts.”