Allianz: DOL Might Pull FIAs Out Of BICE – InsuranceNewsNet

InsuranceNewsNet — Your Industry. One Source.™

Sign in
  • Subscribe
  • About
  • Advertise
  • Contact
Home Now reading Top Stories
Topics
    • Life Insurance News
    • Annuity News
    • Health/Employee Benefits
    • Property and Casualty
    • Advisor News
    • Washington Wire
    • Regulation News
    • Sponsored Articles
    • Monthly Focus
  • INN Exclusives
  • NewsWires
  • Magazine
  • Webinars
  • Free Newsletters
Sign in or register to be an INNsider.
  • Exclusives
  • NewsWires
  • Magazine
  • Webinars
  • Free Newsletters
  • Insider Pro
  • About
  • Advertise
  • Editorial Staff
  • Contact
  • Newsletters

Get Social

  • Facebook
  • Twitter
  • LinkedIn
Annuity News
Top Stories RSS Get our newsletter
Order Prints
May 12, 2016 Top Stories 15 comments
Share
Share
Tweet
Email

Allianz: DOL Might Pull FIAs Out Of BICE

By Cyril Tuohy

A senior executive with the top-selling fixed indexed annuity (FIA) insurer in the U.S. said the Department of Labor might pull FIAs out of the most restrictive exemption when sold in retirement accounts.

Regulators added FIAs to the Best Interest Contract Exemption in the final version of a fiduciary rule, or “Conflict of Interest” rule, published April 6, because they are considered complex. The BICE requires hefty disclosures and a signed contract with clients.

The change caught the industry by surprise since FIAs were not included in the BICE in the draft rule issued last year.

Related stories

  • Winning $754.6M Powerball ticket sold in Washington
  • $747 million Powerball jackpot still up for grabs

In a conference call with analysts, Dieter Wemmer, chief financial officer of Allianz, suggested that FIAs might be dropped from the BICE just as quickly as they had appeared.

“It could happen that the fixed index annuity business is dropping off this list again, because it came also at the last moment,” Wemmer said in response to a question from an analyst.

Allianz Life Insurance of North America has its headquarters in Minneapolis. It is a subsidiary of the Munich-based financial services giant Allianz SE.

Last year, its FIA sales soared 33 percent to $53 billion, a record, according to Wink’s Sales & Market Report.

They were the best-selling fixed annuity product category last year in an otherwise flat annuity market, according to LIMRA Secure Retirement Institute.

Allianz was the No. 1 seller of FIAs with 14.5 percent market share last year and in the fourth quarter of 2015, the company’s Allianz 222 annuity was the best-selling indexed annuity for the fourth consecutive quarter, Wink’s also reported.

Allianz develops and distributes a variety of FIAs.

In addition to its Allianz 222 blockbuster, it sells Allianz 360, 365i, Essential Income 7, Core Income 7, Signature 7, Master Dex X and Endurance Plus fixed indexed annuities.

Rule Could Foster 'Opportunity'

How the rule will affect future sales of FIAs is anyone’s guess, but Wemmer put a positive spin on the far-reaching regulatory framework issued by the DOL April 6.

Proprietary sales channels in which insurance agents are under contract to sell Allianz products “should help us to drive actually the volume, and we feel that overall the fixed-index annuity market will not get smaller,” Wemmer said.

Sales of FIAs “could still grow with the current version of the DOL rule and we see ourselves not as disadvantaged to participate in this market,” he also said.

Many executives with insurance companies have told analysts over the past three weeks that in the world of insurance distribution independent agents who are going to have the most difficult time selling products under the DOL’s restrictions.

The restrictions require a financial institution to certify on behalf of agents that insurance and annuity contracts the agents sell are in the best interest of a client.

Some insurance company executives, however, have raised questions as to whether the certifying financial institution referred to in the DOL rule is a manufacturer or a distributor of an insurance contract.

In the insurance world, independent agents sometimes report directly to the insurance company. At other times, the agents report to a wholesaler or marketing organization, which then reports to the insurance company.

Insurance companies with proprietary distribution networks, over which insurers have more control, are likely to find it easier to acknowledge than an agent has conducted a sale in the best interest of a client.

“So the whole story about what is the final rule is not yet over and it is still under discussion,” Wemmer said.

InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected]

© Entire contents copyright 2016 by InsuranceNewsNet.com Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.com.

 

Older

Opportunity Knocks For Advisors In Midsize Employer Market

Newer

How to Sell and Not Get Sued Under Fiduciary

Advisor News

  • 'Sandwich generation' survey says Americans caring for children and aging parents are financially stressed
  • Jury finds Lexington investment advisor, guilty of charges related to fraud
  • Chicago investment advisor indicted for allegedly swindling clients out of $683,000
  • Will the family maximum limit my Social Security benefits?
  • South Florida resort sold for $835M, biggest deal for a U.S. hotel since pandemic started
More Advisor News

Annuity News

  • Winning $754.6M Powerball ticket sold in Washington
  • $747 million Powerball jackpot still up for grabs
  • Study: Does pessimism really suppress annuity sales?
  • Sweet streams of income: ChatGPT, the bard of annuities
  • F&G Annuities & Life announces equity investment in life IMO SYNCIS
Sponsor
More Annuity News

Health/Employee Benefits News

  • Wyoming Medicaid expansion set to die in the House
  • Bitter with the sweet on Medicaid expansion
  • Texans brace for the end of nearly three years of pandemic Medicaid coverage
  • Survey: Annual 2022 health premiums steady, but may be ‘calm before the storm’
  • Florida looks to double amount of medical-marijuana licenses
More Health/Employee Benefits News

Life Insurance News

  • Jury hears about financial crimes in Murdaugh murder trial
  • In Murdaugh murder trial, the path to conviction remains unclear
  • Libby Murdaugh's caretaker saw Alex night of murders for '20 minutes', but he said '30 to 40'
  • SC judge in Murdaugh murder trial allows jury to hear alleged financial crime motive
  • How the cases in Alex Murdaugh's murder trial are shaping up
More Life Insurance News

- Presented By -

Top Read Stories

  • Fed slows interest rate increases; more hikes expected
  • Allstate reports $1.4B loss for 2022; increases rates, policy restrictions
  • American Equity readies 2022 earnings report amid ongoing conflicts
  • Research on Oral Health Detailed by Researchers at University of Washington (Health insurance is associated with dental care use among university students in Washington State): Health and Medicine – Oral Health
  • Doctor convicted of using adulterated equipment
More Top Read Stories >

FEATURED OFFERS

Meet Encova Life
We know agents matter. You can count on our life team to be high tech, high touch and responsive.

How to Write For InsuranceNewsNet

Find out how you can submit content for publishing on our website.
View Guidelines

Topics

  • Life Insurance News
  • Annuity News
  • Health/Employee Benefits
  • Property and Casualty
  • Advisor News
  • Washington Wire
  • Regulation News
  • Sponsored Articles
  • Monthly Focus

Top Sections

  • Life Insurance News
  • Annuity News
  • Health/Employee Benefits News
  • Property and Casualty News
  • AdvisorNews
  • Washington Wire
  • Insurance Webinars

Our Company

  • About
  • Editorial Staff
  • Magazine
  • Write for INN
  • Advertise
  • Contact

Sign up for our FREE e-Newsletter!

Get breaking news, exclusive stories, and money- making insights straight into your inbox.

select Newsletter Options
Facebook Linkedin Twitter
© 2023 InsuranceNewsNet.com, Inc. All rights reserved.
  • Terms & Conditions
  • Privacy Policy
  • AdvisorNews

Sign in with your Insider Pro Account

Not registered? Become an Insider Pro.