The DOL’s fiduciary rule faces another legal challenge

investmentnews.com:

A coalition of insurance trade associations has filed a lawsuit against the US Department of Labor (DOL), seeking to overturn a regulation they argue limits consumer choice in financial professionals and restricts access to retirement products that offer protected lifetime income.

The plaintiffs in the civil lawsuit include the American Council of Life Insurers, the National Association of Insurance and Financial Advisors, and the Insured Retirement Institute. They collectively criticized the DOL’s fiduciary standard, which they say imposes undue restrictions on nearly all financial professionals who sell retirement products.

In their legal filing, the associations asserted that the DOL’s fiduciary-only regulation is fundamentally flawed and unconstitutional. They argued that it mirrors the DOL’s 2016 rule, which was previously struck down by the Fifth Circuit Court of Appeals.

“The legal action we are taking today comes after careful deliberation on what is in the best interest of the retirement savers we serve,” the coalition said in a joint statement.

The lawsuit contends that the regulation overreaches the DOL’s authority, calling it “arbitrary” and “capricious” as it ignores federal and state standards already in place for financial professionals working with retirement savers. “

“Our filing makes a convincing case that the DOL’s fiduciary-only regulation suffers from the same legal defects as the DOL’s failed 2016 rule,” the associations said, echoing an argument made in an earlier lawsuit against the new fiduciary rule advanced by another group.

Critics of the rule emphasize that it could have significant negative impacts on retirement savers. They cite the adverse effects of the 2016 regulation, which resulted in