Fiduciary Rule Could Lead To ‘Radical’ Change In Annuity Thinking

PALM BEACH, Fla. - The delay in the Department of Labor’s fiduciary rule has offered a window for the annuity industry to reconnect with lawmakers and consumers, insurance executives said Monday.

Simplifying the way advisors, insurers and industry leaders communicate about guaranteed income products could lead to a “radical” change in the way people think about annuities, said Barry Stowe, chairman and CEO of Jackson National Life.

“We need to get out of our own way, and simplify the explanation of what we do,” Stowe said.

If the industry can do that, it will have taken an important step to turning annuities and guaranteed income into a tick-off-the-box process in the same way that tens of millions of retirees sign up for Medicare Supplement insurance and Social Security, he said.

“There’s no reason why our product can’t be viewed like Medicare Supplement,” Stowe said.

Stowe was one of three panelists to speak at the opening session of the annual meeting of the Insured Retirement Institute (IRI).

The session was moderated by former CNN chief political correspondent Candy Crowley.

Over the years, jargon has left many consumers and regulators confused, even suspect, about the annuity industry, Stowe said.

Terms like “GMWB,” “DB,” and “Level 4,” which are used to describe some annuity income riders, only turn people off and render regulators leery, he said.

Regulators earlier this year delayed the deployment of major portions of the fiduciary rule until July 1, 2019. Initial portions of the rule went into effect on June 9.

Annuity companies and advisors should use that time to retake control of their own narrative, put the industry’s best foot forward and respond to the criticism and negative “rhetoric hurled at us,” Stowe said.

InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at cyril.tuohy@innfeedback.com.

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