NAIFA National & Town Hall Q&A Diane Boyle Sr. Vice President of Government Affairs NAIFA National

1. NAIFA National
&
Town Hall Q&A

2. NAIFA
NAIFA Helps You Grow Your Business
NAIFA offers more than 50 professional programs and products to enhance
skills and provide value-added business services.
NAIFA Protects Your Business
Your products and your business are at risk now more than ever.
NAIFA membership is the best insurance you can buy to protect your business.
NAIFA Promotes the Ethical Conduct of Our Members
Consumers know working with a NAIFA member means working with
professionals who adhere to the highest standards in the industry.

3. At the federal level
• NAIFA’s government relations staff monitors federal
legislation and regulations and mobilizes resources to
achieve the most favorable outcome for the industry.
At the state level
• NAIFA’s state associations work with NAIFA’s national
government relations department to positively impact state
legislation and regulation.
NAIFA Protects Your Business

4. 1612 bills of interest to NAIFA members
introduced in the 113th Congress:
• 267 financial services bills
• 674 health insurance bills
• 329 retirement and employee benefits bills
• 150 long-term care bills
• 68 life insurance bills
• 55 property & casualty bills
• 13 estate tax bills
• 56 annuity bills

5. Regulation of Investment Advice
• Department of Labor regulatory efforts
– Would like to re-define who is a fiduciary in
providing education, information and
advice to retirement account holders
– This includes all 401(k) type plans & IRAs

6. DOL Concern
• The DOL is convinced that advisors
compensated by a third-party – including all
registered representatives paid through their
broker/dealer – are conflicted and will always
provide adverse advice

7. DOL April 14th Proposal
The current Department of Labor (DOL)
Fiduciary proposal, as written, would limit the
ability of lower and mid-market retirement savers
to access advice, service and retirement
products.

8. Problematic Provisions
• Limits education to participants
• Limits advice to employer plan sponsors
• Limits advice on distributions and rollovers
• Vague re: proprietary products

9. • Compensation via commissions, trailing
commissions, 12b-1 fees, fee-sharing, etc.
allowed under a new set of rules
• The “best interest contract” class exemption, for
individuals and small (fewer than 100 participants)
plans/plan participants
Compensation - Class Exemption

10. Best Interest Contract
• Explicitly state that the adviser is operating under a
fiduciary duty
• Warranties that the advisers will be acting in
compliance with all relevant rules and laws
• Specific disclosures about fees and expenses
• Plan participants/beneficiaries and IRA owners will
have a right to sue the advisers (companies offering the
investment options and individuals giving the advice)

11. DOL vs. SEC
• SEC has jurisdiction over all securities
transactions, including those involving
retirement accounts
• DOL has jurisdiction over only those
transactions involving retirement accounts

12. NAIFA’s Strategy
• Regulatory
– White House meeting with NEC & DOL on May 4
– DOL technical meeting on May 20
– DOL follow-up on June 3
– Formal comments (outline is 11 pages)
• Legislative
– Education & Workforce
– Health, Education, Labor & Pensions
– Appropriations

13. Agent Action
• Join NAIFA or renew your NAIFA memberships
• Educate your clients and colleagues
• Share how the DOL rule will impact your practice
and clients. These stories may be used in
discussions with legislators, regulators, or the
media, and they may be useful as we prepare our
comments on the rule.

14. Tax Reform

15. $36.10
$52.10
$69.50
$158.10
$174.80
$193.00
$248.30
$318.10
$399.00
$632.80
$785.10
Capital gains/carryover basis on gifts
Self-employed pension plans (Keogh’s)
Traditional IRAs
Life insurance and annuity inside buildup
Exclusion of capital gains at death
Cafeteria plans including FSAs
Defined benefit plans
Health insurance exchange subsidies
401(k)/other DC plans
Capital gains/long-term dividends
Employer health and LTC premiums
JCT Tax Expenditure Estimates
2014-2018
Billions of Dollars
$3.2 Trillion from Industry

16. $3.2 Trillion from Industry
(Continued)
$4.50
$4.60
$11.50
$15.40
$16.10
$16.80
$17.60
$21.30
$29.40
$30.20
ACA small business tax credit
ESOPs
Health Savings Accounts
Life insurance company reserves
VEBAs
Group term life insurance
Section 179 expensing
Accident/disability income insurance
Self-employed health insurance
Roth IRAs
JCT Tax Expenditure Estimates
2014-2018
Billions of Dollars

17. Nearly 45% of all
expenditures are
NAIFA related
NAIFA
All other
1. Employer health and LTC premiums $785.1 billion
2. Capital gains/long term dividends $632.8 billion
3. Foreign corporations income $418 billion
4. Mortgage interest deduction $405.2 billion
5. Defined contribution plans $399 billion
6. Earned income credit $352.8 billion
7. Health exchange subsidies $318.1 billion
8. State and local tax deduction $316.4 billion
9. Child and dependent care credit $285.5 billion
10. Defined benefit plans $248.3 billion
Top Ten Expenditures

18. • Secure Family Coalition Fly-in – March 4, 2015
• NAIFA’s Strength – Members in every Congressional
district
Industry Unity

19. 90% of Congress covered with constituents from
all 50 states and DC. Nearly 40% with lawmakers.
• 100% Senate Leadership
• 100% House Leadership
• 100% Senate Finance
• 100% Senate Banking
• 89% House Ways & Means
• 88% House Financial Services

20. • NAIFA supports bi-partisan efforts to improve
affordability and sustainability of private
insurance choices.
• We want to ensure that consumers have access
to professional services provided by licensed
and regulated insurance agents.
Affordable Care Act

21. What will the Supreme Court do?
• King v. Burwell: challenges legality of subsidies to
federal exchange states
• Controversial IRS Rule to apply ACA credits to
federal and state exchanges
• Plaintiffs argue ACA text limits tax credits to state
exchanges
• Case will be decided in June

22. NARAB Enacted
National Association of Registered Agents and Brokers

23. NAIFA Member?
Lobby on your own?

24. Political Mathematics
• Show me the numbers
• Mathematics is the practical implication of a
democracy
• Coalitions are more effective than flying solo
• Policymakers intuitively lean towards policy
positions that have broad support

25. Free One-Year Membership
New in the business (less than 3 years)?
Join online at www.NAIFA.org
and use promo code
NAIFANYFREE
Melissa McGrath
845-298-2561 or naifanys@gmail.com

26. NAIFA Key Contact Coverage
• 1,770 documented relationships – average of 3
NAIFA members per Member of Congress
• 100% of tax-writing committees
• ••98% of Congress has a NAIFA constituent member
active in NAIFA's political involvement program

27. Average Amount Raised by Winners
Over $1.5 Million
$359,577 $400,386 $423,245
$556,475 $541,121
$686,198 $677,807
$845,907
$911,644
$1,038,391
$1,259,791
$1,362,239
$1,434,760
$1,596,953
1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
Yikes!
Source: Norm Ornstein and Thomas Mann, Brookings/AEI Vital Statistics on Congress, Chapter 3.

29. NAIFA’s PAC Strength
Insurance PACs
1. National Assn of Insurance & Financial Advisors
2. New York Life Insurance
3. AFLAC Inc
4. Independent Insurance Agents & Brokers/America
5. USAA
6. Massachusetts Mutual Life Insurance
7. Council of Insurance Agents & Brokers
8. Association for Advanced Life Underwriting
9. Metlife Inc
10. Liberty Mutual Insurance
Top PACs
1. National Assn of Realtors
2. National Beer Wholesalers Assn
3. National Auto Dealers Assn
4. Honeywell International
5. Lockheed Martin
6. American Bankers Assn
7. AT&T Inc
8. Intl Brotherhood of Electrical Workers
9. Credit Union National Assn
10. Operating Engineers Union
11. Northrop Grumman
12. National Assn of Insurance & Financial Advisors
Largest Insurance Industry and 12th Largest in U.S.

30. NY Steady Decline in Participation

31. New Yorkers on Key Committees
Senate
Charles Schumer – Finance, Banking
House
Steve Israel – Asst. Democratic Whip
Tom Reed – Ways & Means
Charlie Rangel – Ways & Means
Joe Crowley – Ways & Means
Elise Stefanik – Ed & Workforce
Hakeem Jeffries – Ed & Workforce
Peter King – Financial Services
Carolyn Maloney – Financial Services
Nydia Velazquez – Financial Services
Greg Meeks – Financial Services

32. 2014 Election Cycle
$111,000 Contributed to New York Federal
Candidates
$121,943 Raised
-$48,168 State PAC
$73,775 Federal Candidates
New York Underfunded by $37,225

33. Growth Potential
NAIFA member participation rate is 23.6%
NAIFA staff participation rate is 39%
NAIFA-NYS participation rate is 7.3%
Target Market – Over 92% of New York
Members Do Not Contribute to IFAPAC

34. Stay Involved!