June 7, 2021 by Broker World
The House of Representatives has passed the Protecting the Right to Organize (PRO) Act (H.R. 842), a sweeping piece of labor legislation. Among its provisions, the PRO Act as passed by the House would reclassify many insurance and financial professionals as “employees” rather than “independent contractors” under federal labor law. NAIFA argues that such a reclassification will disrupt insurance and financial services business models and limit consumer access to diverse offerings of products, services, and advice.
“Insurance and financial advisors have a long history of successfully working as independent contractors with insurance carriers and financial firms to serve the financial services needs of consumers,” said NAIFA CEO Kevin Mayeux. “Issues with contract workers the PRO Act is supposed to address do not exist in the insurance and financial services industry, which is already highly regulated. Reclassifying agents and advisors as employees would in many cases stifle their independence to provide clients with diverse options, complicate their tax filing status, and disrupt their business models and relationships with clients. Many agents and advisors have relationships with multiple insurance companies and financial institutions, which could make reclassifying them as ‘employees’ problematic. The current independent-contractor relationship ensures consumers have the greatest access to products, services, and advice.”