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In a letter this week to Senate Majority Leader Mitch McConnell, R-Kent., Sen. Tim Scott, R-S.C., lobbied for immediate Senate consideration of the bipartisan Setting Every Community Up for Retirement Enhancement (Secure) Act. The bill passed the House by a 417-3 vote on May 23.
The Annuity Suitability Working Group is making a furious bid to nail down language of an annuity sales model law by the NAIC fall meeting the first week of December. The group took on the heart of the model this week: “The Duties of Insurers and Producers,” starting with “Best Interest Obligations.”
Regulation 187 was finalized in 2018 and took effect Aug. 1 of this year for annuities. Life insurance sales will fall under the rule on Feb. 1, 2020. It establishes a best-interest standard, mandates enhanced disclosure and documentation, required of the producer and insurance carrier, as well as training programs.
Ken Fisher reportedly made several offensive remarks during a “fireside chat” at the Tiburon Advisors’ CEO Summit, which has traditionally been a place for industry execs to speak candidly and off the record about their respected fields. The Tiburon managing partner says Fisher will never be invited back.
The Annuity Suitability Working Group wants to make sure its annuity sales model law will not disturb exemptions granted under Dodd-Frank. The group is holding two-hour conference calls in a bid to finally complete the model law before the National Association of Insurance Commissioners’ fall meeting in December.
A broker who sued Ohio National to recoup trail commissions will appeal an Oct. 2 ruling dismissing his lawsuit, his attorney says. Stephen Cook, a Dallas-based advisor affiliated with Triad Advisors, filed a class-action lawsuit filed in March challenging Ohio National’s decision to stop paying trail commissions on certain variable annuities.
A judge for the Southern District of Ohio tossed out a pair of lawsuits by separate brokers last week, bolstering Ohio National’s 2018 decision to eliminate trail commissions on certain variable annuities. But a pair of other lawsuits can proceed, judges have ruled.
The Accelerated Underwriting Working Group had its first conference call today and vowed to stick with a deliberative schedule that has the group deferring a work product until next summer. Annual surveys show insurers steadily adopting additional Big Data and accelerated underwriting efforts.
The Accelerated Underwriting Working Group is chaired by Robert H. Muriel, director of the Illinois Department of Insurance. It will consider the use of external data and data analytics in accelerated life underwriting and possibly draft guidance for states in 2020.
After roughly 18 months of meetings, the group is in tentative agreement on a best interest standard for annuity sales. But New York officials are adamant that the standard apply to in-force policies, a move other regulators are hesitant to make.
The Independent Insurance Agents and Brokers of New York filed an appeal Monday challenging a New York Supreme Court ruling upholding Regulation 187. The state’s new regulations governing annuity and life insurance sales, Regulation 187 is viewed by the industry as being too punitive.
The second quarter was a good one for life insurance sales. New data by Wink’s Sales & Market Report shows strong sales across the universal life, whole life and indexed life product lines. We’ve highlighted the important information in a graphic slide show.
According to a 2019 study conducted by The Penn Mutual Life Insurance Company, millennials— more so than earlier generations— are placing a greater emphasis on planning lifestyle-oriented details when it comes to starting or expanding their family.
A National Association of Insurance Commissioners’ working group was working through policy overview language when it took up a request by Pacific Life to change “gender” to “sex.” That led regulators to consider how transgender consumers are treated under insurance regulation.
Overall, consumers own about $15 trillion in home equity and another $13 trillion in small-business valuation, Tiburon Strategic Advisors found. Much of that is owned by baby boomers, or near boomers, and they will use that value to pay for their retirement.
The U.S. economy slowed in the spring, and most analysts expect it to weaken further in the months ahead. The nation’s gross domestic product— the broadest gauge of economic health— grew at a moderate 2% annual rate in the April-June quarter, the Commerce Department reported Thursday.
Actress and model Brooke Shields, 54, is a near perfect fit for this year’s Life Insurance Awareness Month campaign, said Faisa Stafford, president and chief financial officer of Life Happens. So far, more than 60 million people have seen either Shields’ television or radio ads.
The Life Insurance and Annuities Committee established the Retirement Security Working Group during the NAIC Summer Meeting in New York City earlier this month. The group’s efforts could include working with the Interstate Insurance Product Regulation commissioner to develop new lifetime income products.
Motivation is high to craft advice standards that harmonize as much as possible across the financial services’ landscape, a legal expert told a LIMRA audience during a Thursday webinar. In particular, to harmonize Department of Labor rules with the Securities and Exchange Commission’s Regulation Best Interest.
Life insurance or annuity policies sold with a long-term care rider jumped from 228,000 in 2015 to 461,000 in 2018, LIMRA has found. Today, more than 40 carriers are selling these products with a long-term care element. State insurance regulators are hoping the hybrid products stabilize the LTC market while providing consumers with protection.
State insurance regulators moved briskly through four topics as they try to thread the needle between suitability and fiduciary in crafting an annuity sales model law.
Acting Albany County Supreme Court Justice Henry Zwack ruled that the New York State Department of Financial Services was within its authority when it issued Regulation 187. The regulation took effect Thursday for annuity sales in New York, and will extend to life insurance sales in six months.
A National Association of Insurance Commissioners’ working group has accelerated efforts to complete its long-delayed “policy overview” summary to accompany life insurance sales. The policy overview will accompany the Life Insurance Buyer’s Guide and regulators are considering moving up delivery of both.
The Annuity Suitability Working Group aims to tentatively finalize a standard for annuity sales by the National Association of Insurance Commissioners’ Fall Meeting in November. Debate over whether to add “prudence” to the model law dominated another 90-minute conference call Monday.
There were 87 insurance company transactions during the year, the highest number tracked by Tiburon Strategic Advisors in at least five years. Fueled by the mega-merger between CVS Health and Aetna, the 87 transactions averaged $971 million per deal, more than twice the 2017 average.
The Annuity Suitability Working Group is working through five questions in a bid to finalize an annuity sales model law that regulators have been working on for more than a year. Members are focusing on insurers in a bid to rein in annuity sales incentives.
The Annuity Disclosure Working Group is studying a proposal to increase the time indexes must be in existence to be used in annuity illustrations from 10 to 15 years. But regulators are having difficulty getting past a couple of key issues.
Total new premium for individual life combination products dropped 2% to $4.3 billion in 2018, according to LIMRA. Life combination products provide life insurance coverage with long-term care or chronic illness coverage, an attractive value proposition to consumers. In 2018, combination products represented 27% of the overall U.S. individual life insurance market.
California Insurance Commissioner Ricardo Lara’s office said the state may push for a best-interest annuity sales rule similar to New York’s if the NAIC doesn’t tighten up its annuity sales proposal. An NAIC working group has two conference calls and an in-person meeting to discuss the rule over the next two weeks.
New IUL products featuring “multipliers” or “bonuses” prompted the IUL Illustration Subgroup to consider changes to Actuarial Guideline 49. During a Monday conference call, one regulator called for “a total rework of AG 49 from the ground up.”
A magistrate judge denied a motion by Ohio National to dismiss a class-action lawsuit filed in March by Stephen Cook, a Dallas-based advisor affiliated with Triad Advisors. Judge Stephanie Bowman also recommended that the case be consolidated with a similar one brought by LPL Financial broker Lance Browning.
The NAIC is creating tools and graphics that each state can incorporate into their insurance department websites, working group members said this week. Work will begin immediately with a “toolkit” of info in time for Life Insurance Awareness Month in September.
Little bits of kindness help us all get ahead. Speakers at the National Association of Health Underwriters annual conference explain how paying it forward helps your business.
An insurance commissioners’ working group opened up a new comment period and scheduled two 90-minute conference calls in a bid to finalize an annuity sales model rule. Comments are being accepted until July 10 on two topics: conflict of interest and the care obligation.
The rule proposed by the New Jersey Bureau of Securities would require all financial advisors registered in the state to act as fiduciaries, making New Jersey one of the first states to propose a uniform fiduciary standard for all financial services professionals.
Commissioner Doug Ommen hopes to retain suitability ideas even as the word is scrubbed from his annuity sales proposal. The driving force is to harmonize state insurance regulations with the new Securities and Exchange Commission’s Regulation Best Interest, Ommen explained.
LIMRA and LOMA are offering a comprehensive training program to help sales professionals and home office employees understand and comply with New York Regulation 187.
The National Association of Insurance Commissioners’ working group is studying a proposal to double the time indexes must be in existence to be used in annuity illustrations from 10 to 20 years. Regulators are concerned that consumers are being misled by unrealistic indexed annuity illustrations.
A National Association of Insurance Commissioners’ subgroup held an at-times contentious conference call Tuesday to discuss AG 49. Regulators and industry representatives sparred over whether insurers are trying to ‘game the system’ with IUL illustrations, or just being ‘innovative.’
Under a unanimous consent maneuver, the Setting Every Community Up for Retirement (SECURE) Act could be voted on quickly. That means that the Senate could pass the bill Friday, as long as no senator objects The bill would expand access for annuities inside plans, and allow small employers to band together to offer plans.
Labor Secretary Alexander Acosta testified recently before the House Education and Labor Committee and discussed the late fiduciary rule, which was thrown out by the Fifth Circuit Court of Appeals. Acosta was not very clear, one industry expert said, but is likely overseeing efforts to replace the fiduciary rule with a fairer rule.
“I think there’s a ton of tailwind for this product,” one expert said.
The group agreed to require distribution of a policy overview in tandem with the buyer’s guide on all life insurance policies. Policies without an illustration will also include a premium and benefit pattern summary. The policy overview is expected to be completed by the NAIC Summer Meeting in August.
The Retirement Enhancement and Savings Act (RESA) and the Setting Every Community Up for Retirement Enhancement Act of 2019, or SECURE Act, are very similar bills that would boost annuity use in retirement plans. The House is expected to vote on the SECURE Act before a Memorial Day recess period.
The companies have signed a letter of intent and high-level executives are said to be meeting this week on the deal. Remaining issues include a decision on the new company name and the corporate structure, a source indicated.
The National Association of Insurance Commissioners voted last week to form a task force focused on LTCi market stability. Its most significant, and most controversial, charge is to harmonize rate review processes across state lines. Many insurers continue to seek large LTCi rate hikes.
Judge Denise J. Casper ruled that an addendum to the Ohio National selling agreement commits them to arbitration with Commonwealth Equity Services. The broker-dealer is challenging Ohio National’s decision to end trail commissions on a specific variable annuity.
While the Department of Labor fiduciary rule is gone, tossed out by a federal appeals court one year ago, the compliance spotlight it shone on commission annuity sales remains. If the industry doesn’t figure out how to effectively provide distribution of annuities via advisory channels, “sales are just going to fall off a cliff,” one executive says.
The annuity sales landscape changed in a major way in 2018. Sales rebounded strongly in virtually every product line, in some cases 40 to 50 percent year-over-year. Fixed annuities led the way.
Al Bundy would not be a good life insurance prospect, but Jay Pritchett would be a warm one. The two iconic television characters played by actor Ed O’Neill represent the hot and cold of prospecting, said Vikram Kamath, director of the LIMRA Center of Excellence for Analytics.
One trend the industry is falling short on is customer engagement.
The Securities and Exchange Commission has been very deliberate with its Regulation Best Interest, which was tentatively adopted last April.Since then, not a lot has happened as the SEC collects comments and tinkers with the rule behind closed doors. But there may be a method to their madness, said Carl Wilkerson, vice president and chief counsel, securities, for the American Council of Life Insurers.
Although the insurance industry is known for moving slowly when it comes to change, the insurtech revolution is forcing executives out of their comfort zones.
The lower tax rates set by the Tax Cuts & Jobs Act means income taxes are “on sale,” says Deborah A. Miner, a tax expert and executive with Western & Southern Financial Group Distributors. Clients and advisors who take proactive advantage could see their retirement nest eggs expand significantly.
Long-term care insurance sold well in 2018, the American Association for Long-Term Care Insurance reports. According to the association, of the roughly 350,000 individuals who purchased coverage, roughly 16 percent opted for traditional health-based long-term care insurance.
The Federal Reserve did the expected today and is holding interest rates to the current range of 2.25 to 2.5 percent. The central bank’s new theme of patience and flexibility reflects its calming response since the start of the year to slow economic growth at home and abroad, a nervous stock market and persistently mild inflation.
Principal Financial is deep in talks to acquire the Wells Fargo retirement plan business in a deal estimated at about $1 billion, Reuters reports.
Deloitte’s annual M&A Outlook recorded 681 transactions in 2018 across the insurance sector, up from 621 deals in 2017. That robust M&A activity should continue this year, the report says. The appetite for insurtech capability is one of the “five buckets” that Deloitte authors separate potential 2019 M&A drivers.
A new lawsuit was field Monday challenging Ohio National’s decision to stop paying trail commissions on certain variable annuity contracts. Stephen K. Cook, an investment advisor representative with Triad Advisors, a Dallas, Texas broker-dealer, filed the class-action lawsuit in the Southern District of Ohio court.
Genworth is halting long-term care insurance and annuity sales through the broker general agency channel. All LTCi and annuity products will continue to be sold through other channels, Genworth said. In-force policies are not affected, the insurer added.
