Annuity Carriers Need To Prepare Now For DOL Fiduciary Rule
March 16, 2016 (BOSTON) – The new Department of Labor regulations related to ERISA fiduciary responsibility have the potential to create significant new compliance issues. Much of the impact of the new ruling is expected to come in 2017 or later, however according to research and strategic advisory firm Novarica, carriers should start planning now. Novarica’s most recent executive brief examines the ruling and ways in which insurers can prepare.
“As we look to the balance of 2016, one of the most significant impacts on annuities (and related retirement oriented products) will be the implementation of the DOL Fiduciary Responsibility guidelines,” said Rob McIsaac, Senior Vice President of Research and Consulting at Novarica and lead author of the brief. “While the final wording has not yet emerged, the broad strokes of the regulations are pretty clear. Also clear is that carriers will need to commit resources and shelf space to take care of being properly positioned for the future. This has implications for product development, distribution relationships and the pool for discretionary investments carriers were planning for 2016-17. This new brief offers carriers some key insights on what will be required for this journey.”
The brief, available at http://novarica.com/dol-fiduciary-responsibility-and-potential-impact-on-annuities/, outlines the issues and implications surrounding the new DOL regulations. Among the key findings are:
- Some carriers are taking action now, and more should be. Carriers should establish governance structures for initiatives, consider changes to their overall product mix, commissions and surrender charges, and adjust distribution strategies as needed.
- The implications for IT budgets are broad. The new rule has implications for project prioritization, policy administration systems, websites, and more.
- 2016 sales impact unclear. Sales may drop as advisors avoid risk, or there may be a rush to book sales before the rule takes effect. The most significant impact will occur in 2017 or later.
EverQuote Wins Two Gold LeadsCouncil LEADER Awards
Munich Re, US, Launches Transit Bus Collision Avoidance Pilot as Part of Enhanced Focus on Developing Innovative Solutions for Mobility Risks
Advisor News
Annuity News
Health/Employee Benefits News
Life Insurance News