On November 23, 2016, Judge Moss in the U.S. District Court for the District of Columbia again ruled in favor of the Department and denied the renewed motion for a preliminary injunction brought by the National Association for Fixed Annuities (“NAFA”) challenging implementation of the Department’s conflict of interest rule and related exemptions. Nat’l Ass’n for Fixed Annuities v. Perez, No. CV 16-1035 (RDM), 2016 WL 6902113 (D.D.C. Nov. 23, 2016). Here, the Court applied both standards that the appellate court might apply when evaluating a preliminary injunction motion, and concluded that NAFA could not satisfy either standard. First, the court observed that it already had rejected NAFA’s claims on the merits in a final judgment (see our blog available here). Second, the court found that the potential for irreparable harm, balance of equities, and public interest did not weigh so heavily in NAFA’s favor as to outweigh NAFA’s inability to establish a likelihood of success on the merits. The court explained that the types of irreparable harm alleged – e.g., the fixed indexed annuity industry will incur substantial compliance costs, business practices will change when the new rules take effect, and the fixed indexed annuities industry will sustain economic losses from receiving lower commissions – while not insignificant, were outweighed by the potential harm to retirement investors should the rules not be implemented. NAFA has filed an Emergency Motion for an Injunction Pending Appeal with the U.S. Court of Appeals for the District of Columbia urging the Court to stay the April 10, 2017 applicability date of the rule pending appeal of the district court’s rulings in favor of the Department.
Home > Insurance > DOL Prevails Again and NAFA Moves on to the Circuit Court Challenging the Conflict of Interest Rule and Related Exemptions