A group of industry trade associations beseeched the House Finance Committee this week to bring stalled legislation to reduce market barriers for the sale of registered index linked annuities to the House floor for a vote.
The group sent a letter Monday to committee chair Maxine Waters, D-Calif. and ranking member Patrick McHenry, R-N.C. asking for a vote on the RILA Act. The bill would lower barriers to retirement income products by requiring the Securities and Exchange Commission to revise rules regarding developing and offering certain annuity products, including RILAs.
Signatories to the letter include the American Council of Life Insurers, Committee of Annuity Insurers, Finseca, the Insured Retirement and the Institute National Association of Insurance and Financial Advisors. The group noted that even the pro-consumer Consumer Federation of America supports the legislation.
Messages sent to Waters's press office for comment on the letter were not returned.
"RILAs are long-term investment products which can be used by consumers to help accumulate savings for retirement, especially if the consumer is currently retired or planning to stop working in near future, when less time exists for recovery from a significant downturn in the market," the letter reads. "A RILA can also serve as a valuable supplement to an individual’s retirement plan and offers a wide array of protection and growth options to create a strategy that aligns with a consumer’s individual retirement needs."
The House Finance Committee approved the RILA Act in July, but it has not moved since.
RILAs promise growth beyond a simple fixed rate of return while providing guaranteed protection from losses in market downturns. They are a hybrid of popular fixed indexed annuities that tie performance to major market indexes. But RILAs offer a broad selection of financial options to deliver specific investment growth with greater protection. With a RILA, investors can set the maximum loss they are willing to tolerate, unlike traditional index annuities.
In 2021, RILA sales were $38.7 billion, 61% higher than in 2020 and current growth remains strong and seemingly pinned to Fed interest rate moves.