A NAIFA-Texas legislative priority -- to increase annuity protections for consumers from $100,000 to $250,000 per life -- has advanced in the 82nd Texas Legislature with the filing of House Bill 1157 by Rep. Kelly Hancock (R-Richland Hills) and its Senate companion Senate Bill 567 by Sen. Tommy Williams (R-The Woodlands). The bills mirror recommendations in the NAIC 2009 Model Life and Health Guaranty Association Act.

Legislators' number one priority is to pass a budget that will address a projected multi-billion dollar shortfall.  Additionally, lawmakers face the daunting challenges of drawing new legislative and congressional district maps and determining how best to deal with federal mandates including the new healthcare reform law. NAIFA-Texas has expressed the importance of agent representation on any health insurance exchange board and the need for licensed insurance providers to assist and to be compensated for assisting individuals and small businesses that participate in a health exchange required by the new federal law.

Visit the NAIFA-Texas website www.naifa-texas.org to read updates on legislation impacting agents and financial advisors. Breaking developments will be reported in real time until the session adjourns at the end of May.

The Deficit Reduction Commission, Congress and the Administration have characterized the tax-favored status of certain products including life insurance and annuity inside build-up, pension/retirement plans, and employer provided benefits as tax expenditures.

Now comes word from insider sources in D.C. that Senators Mark Warner (D-VA) and Saxby Chambliss (R-GA) are working on a budget proposal that would include a tax reform plan patterned on the Deficit Reduction Commission plan. They have said that they're starting with a plan that would repeal all tax expenditures and are visiting with people about which tax expenditures, if any, to add back in. This is an approach to which Sen. Conrad (D- ND), chairman of the Senate Budget Committee, also is open to considering.

Bottom line: the fact that all tax expenditures in the Internal Revenue Code may be on the table and debated seriously in the context of a Congressional budget adds to a growing list of issues facing agents, insurers, and insurance industry and financial services consumers whose financial well-being is at stake.  

Support grows in Congress for repeal of the controversial 1099 tax-reporting provision of the healthcare reform law. Earlier this month, the U.S. Senate approved an amendment to strike the provision.

Without repeal of the measure, all business entities for the tax year 2011 would have to file a 1099 form for each vendor with whom they have cumulative transactions of $600 or more.

A complete repeal of the 1099 reporting requirement provision has been a key goal of NAIFA because the 1099 expansion hurts productivity, costs unnecessary time and is a major burden on businesses.

While many in Congress agree the 1099 provision could be harmful to business owners, there is concern about offsetting the $19 billion in revenue that will be lost. The amendment, which passed with broad bipartisan support in an 81-to-17 Senate vote, would offset the cost of repealing the 1099 reporting requirements by directing the Office of Management and Budget to rescind $44 billion in unspent and unobligated federal dollars. 

Having run for elective office, 2011 NAIFA-Texas PAC Chair Roland Barrera knows the value of PAC dollars that can elect lawmakers who understand the issues facing agents/financial advisors. Barrera is serious about raising PAC dollars to keep NAIFA-Texas members in business. "Keeping our agents in business is worth twice what we contributed last year. Let's do it!"

With a positive recommendation from SEC staff, the so-called "fiduciary" standard gained support to govern all agents, including broker dealers and their registered reps. However, NAIFA President Terry Headley warns that the uniform standard of care could backfire by limiting choices and increasing costs for investors.

Today, investment advisors who give retail customers personalized investment advice must use a fiduciary standard of care, meaning that they must put customers' interests ahead of their own. Insurance agents and securities brokers typically use a suitability standard, meaning they must verify that the products sold to customers suit the customers' needs.

"NAIFA is concerned that the potential additional costs and increased potential for liability for a 'one size fits all' fiduciary standard of care to the broker-dealer business model could result in the middle- and lower-market investors having less access to the account services and investment advice that are currently being delivered by registered representatives of broker-dealers," says Headley.

The SEC study "unduly discounts the risk that, as a result of the regulatory burdens imposed by the recommendations on financial professionals, investors may have access to fewer products and services, and may have to pay more for the services and advice they do receive," Headley says. "Any such results are not in the best interests of investors; nor do they serve to protect them."

The SEC study and staff recommendation was made pursuant to Section 913 of the Dodd-Frank Wall Street Reform and Consumer Protection Act enacted in 2010.

U.S. District Judge Roger Vinson

The Patient Protection and Affordable Care Act (PPACA), President Barack Obama's cornerstone healthcare legislation, came under further scrutiny January 31,2011 when U.S. District Judge Roger Vinson issued an order granting summary judgment declaring it to be unconstitutional. Vinson stated in his ruling that Congress has no authority under the commerce clause of the U.S. Constitution to enforce the "minimum essential coverage provision" in PPACA, which would require individuals to buy health coverage beginning in 2014 or else face a penalty.

Vinson was forced to declare the entire act void, despite the minimum coverage mandate being only one of many provisions in PPACA, because, he said, the act is not written in such a way that the coverage mandate can be considered separately from the remainder of the act.

In December 2010, Federal Judge Henry Hudson ruled neither the Supreme Court nor any federal circuit court of appeals has extended Commerce Clause powers to compel an individual to involuntarily enter the stream of commerce by purchasing a commodity in the private market. There are nearly two dozen other lawsuits challenging the individual mandate.

Ryan Aschenbeck

Each month, we highlight current students of the Leadership in Life Institute (LILI). LILI students commit to six monthly sessions of intense leadership training and personal development in an effort to excel personally and professionally. This month, we feature Ryan Aschenbeck of NAIFA-Central Texas:
 

Q. What interested you in the LILI Program?

A. I wanted to be a part of LILI to grow both personally and professionally. Having been in the business for 11 years, I have found myself becoming complacent at times and I think LILI will help me become a better husband, father and advisor to my clients.

Q. What are your expectations of the program?

A. Sharpened leadership skills, new friends, and renewed enthusiasm.

Q. How are you currently involved in your local?

A. Currently serve the Central Texas Association as President Elect

Q. What is the greatest asset that you bring to the LILI program?

A. My common sense. 

February 1st marked NAIFA-Texas' annual Legislative Day, bringing over 140 members to Austin from across the state to meet with legislators and promote the interests of our industry.

Deep within the Capitol building, the morning began with remarks from CEO Des Taylor and Former State Representative and NAIFA-Wichita Falls member David Farabee.  Afterwards, members congregated in the House gallery to witness the reading of House Resolution 183 which proclaimed February 1, 2011 to be NAIFA-Texas Day.

The marquee event for the day, the Legislative Lunch, was co-hosted with the Independent Insurance Agents of Texas (IIAT) at the University of Texas Alumni Center.  Over 400 NAIFA-Texas and IIAT members shared conversation with lawmakers from their region over a three-course lunch. 

NAIFA-Texas members met with Texas lawmakers throughout the day, making the grassroots contact that this organization thrives on. Legislative Day reminds legislators of the continued importance of agents and the services they provide to Texas families and businesses.

The American College provides NAIFA members a special discount ($599.00 per student) for online webinar classes towards the CFP®, CLU® and ChFC® designations. Click here for a pdf copy of the registration form. 

LUTC/FSS registrations are up 22% and NAIFA sponsored classes are up 5 % over this time last year. 

Click here to view current CFP®, CLU®, ChFC® webinars and LUTC/FSS classroom and online available courses.

Additional information on courses and how to become a class moderator can be found at www.theamericancollege.edu.