Products September 11, 2007

SEI and Aon Offer Errors and Omissions Insurance to Advisers

SEI has formed a strategic alliance with Aon's Affinity Insurance Services, Inc. (Affinity) to offer Errors&Omissions (E&O) Insurance to participants in its advisory market.
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Through the agreement, advisers who work with SEI will have the option to purchase professional liability coverage specifically designed for financial advisers and investment professionals working with SEI, according to a company announcement. Affinity will be the program administrator, offering a full range of customer services to these advisers.

The agreement includes customer support, marketing and claims administration, among other provisions.

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“Not only can E & O insurance help protect adviser firms from potentially devastating financial burdens, it can also provide their clients a better level of comfort, knowing that their adviser has sufficient coverage,” said Kevin Barr, Senior Managing Director, SEI Advisor Network, in the announcement.

More information is at http://www.seic.com/advisors.

Compliance September 11, 2007

DoL Releases Guidance About Annuity Provider Selection

The U.S. Department of Labor (DoL) on Tuesday issued two rules under the Pension Protection Act of 2006 (PPA) relating to choosing an annuity provider for distributions from DB and DC plans.
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A DoL news release said the agency had issued:

  • an interim final rule amending Interpretative Bulletin 95-1to limit the bulletin’s application to the selection of annuity providers for defined benefit plan distributions from defined benefit plans.
  • a proposed rule to provide guidance, in the form of a safe harbor, for annuity provider selection fiduciaries for benefit distributions from individual account plans, such as 401(k)s.

The DoL said, under the proposed safe harbor, fiduciaries must:

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  • Conduct an objective, thorough and analytical search to identify and select providers.
  • Consider the need to engage an expert to assist in its evaluation of providers.
  • Appropriately conclude that the annuity provider would be financially able to make all future payments under the contract, and the cost of the contract is reasonable in relation to the benefits and services to be provided under the contract.

According to the DoL, the PPA required the agency to issue regulations clarifying that the selection of an annuity contract as an optional distribution from an individual account plan is not subject to the “safest available’ standard under Interpretive Bulletin 95-1, but is subject to all otherwise applicable fiduciary standards.

The interim final and proposed rules are to be published in the September 12, 2007 edition of the Federal Register. Public comments should be submitted electronically to the U.S. Department of Labor’s Employee Benefits Security Administration at e-ORI@dol.gov or through the federal e-rulemaking portal at www.regulations.gov.

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