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SECURE Act Opens Door For Annuities — Will They Walk Through?

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Annuities are attractive for advisors and clients because they offer income retirees cannot outlive.

The Setting Every Community Up for Retirement Enhancement (SECURE) Act was included in the massive $1.4 trillion spending bill signed by President Donald Trump at the end of the year. Getting the rules loosened for annuities in plans is “a big win for the insurance industry,” says one industry expert.

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Three key provisions of the SECURE Act will likely affect the way client’s handle their IRA. These provisions went into effect on Jan. 1 and include 1) eliminating the stretch provision on inherited IRAs, 2) increasing the RMD age from 70½ to 72, and 3) allowing individuals older than 70½ to make contributions to traditional IRAs.

The Life Insurance and Annuities (A) Committee voted to pass a strengthened annuity sales standard on to the NAIC Executive Committee and Plenary. The executive committee could take the final vote on the annuity rule changes early in 2020.

Once again, lawsuits and regulation were the most-read annuity topics on InsuranceNewsNet during 2019. Otherwise, readers were naturally interested in annuity sales rankings, among other topics. Here are the top five most-read annuity stories of the year.

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LIMRA today announced three dynamic speakers to talk about what future customers will expect, what diversity and inclusion looks like and how technology will change customer expectations at the upcoming Distribution Conference.

Allianz Life, a provider of retirement solutions, including fixed and variable annuities and life insurance for individuals, issued the following news release:. According to the latest Allianz Quarterly Market Perceptions Study from Allianz Life Insurance Company of North America, worries about an impending market crash or recession are at their lowest…
Annuities are attractive for advisors and clients because they offer income retirees cannot outlive.

Annuities provide guaranteed lifetime income, something that should be attractive to those who fear running out of money in retirement. So why aren’t more Americans buying annuities?

The most powerful way to get people to save for retirement in recent decades has been through benefits offered at their job. But a lot of people- about half the American workforce- don't get that from their employers. “Over 50 million workers right now don't have access to any retirement plan at all,” says David Certner, legislative counsel for AARP.
Annuities are attractive for advisors and clients because they offer income retirees cannot outlive.

The SECURE Act includes three significant provisions relating to lifetime income.  These new provisions have the potential to both fundamentally reframe how participants view their accumulated 401(k) plan savings, and to generate an increasing level of participant interest in gaining “in-plan” access to lifetime income products.

The Board of Directors of American Equity Investment Life Holding Company announced today that Anant Bhalla will become American Equity’ s Chief Executive Officer on March 1, 2020. Mr. Bhalla will begin his employment with American Equity on January 27, 2020 as President and will also be appointed to American Equity’ s Board on that date. John M. Matovina, who is…

JOHNS CREEK, Ga., Jan. 09, 2020– Ebix, Inc., a leading international supplier of On-Demand software and E-commerce services to the insurance, financial, healthcare and e-learning industries, today announced that it has continued to expand on its market share in the industry by enabling the launch of USAA Life Insurance Company annuity products on its state of the…

Jan. 8– The rules of the retirement game just saw a sizable overhaul in Congress, giving a nod to the reality that many Americans can't afford to quit working. The changes aren't massive enough to put to rest concerns about an upcoming retirement crisis where some forecast a growing gap between the haves and have-nots. The new law, signed by President Donald Trump in…

Massachusetts Gov. Charlie Baker sent a letter Tuesday to Secretary of the Commonwealth William Galvin urging him to defer action on proposed fiduciary regulation. The proposal creates “confusion,” and ignores other state and national regulatory efforts, Baker wrote.

–Sammons Financial Group ® has named Bryce Biklen to a new role as vice president and chief distribution officer for Sammons Independent Annuity Group, a division of SFG. Those companies include North American Company for Life and Health Insurance ® and Midland National ® Life Insurance Company.. Biklen will be responsible for leading sales growth for the…

Pacific Life announced that the company’ s fee-based, advisory annuities are now available to independent registered investment advisers through TD Ameritrade. Expanding our distribution through them with our two fee-based annuities, Pacific Odyssey ® and Pacific Index Advisory ®, supports our overall strategy to provide broader access to our…

Great American Life ® expanded its fee-based product offering with the launch of two new fixed-indexed annuities. The Index Protector 4 and Index Protector 5 MVA annuities are designed specifically for advisors involved in fee-based planning, making it easy to incorporate these insurance products into their investment services. Whether they are…

On Dec. 20, the SECURE Act became law. We discussed how this bill passed in the House of Representatives earlier this year with 400- plus votes for and only three against. Congress realized that many Americans were not prepared for retirement.
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Three key provisions of the SECURE Act will likely affect the way client’s handle their IRA. These provisions went into effect on Jan. 1 and include 1) eliminating the stretch provision on inherited IRAs, 2) increasing the RMD age from 70½ to 72, and 3) allowing individuals older than 70½ to make contributions to traditional IRAs.
The National Association of Insurance Commissioners creates model laws for states to pass.
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The Life Insurance and Annuities (A) Committee voted to pass a strengthened annuity sales standard on to the NAIC Executive Committee and Plenary. The executive committee could take the final vote on the annuity rule changes early in 2020.
Annuities are attractive for advisors and clients because they offer income retirees cannot outlive.
Exclusive

Once again, lawsuits and regulation were the most-read annuity topics on InsuranceNewsNet during 2019. Otherwise, readers were naturally interested in annuity sales rankings, among other topics. Here are the top five most-read annuity stories of the year.

A 72- year-old former Menomonee Falls man was sentenced to six months years in federal prison Dec. 18 for failing to pay more than $1 million in taxes on millions of dollars he earned overseas and parked in secret Hong Kong accounts. John Miller Ragland, now living in Bonita Springs, Florida, pleaded guilty in June to one of the four counts in a 2018 indictment.

In May, the House of Representatives passed the bill, officially known as the Setting Every Community Up for Retirement Enhancement Act of 2019, by a remarkable 417-3 bipartisan majority. While that kind of political momentum is difficult to oppose, the bill's progress had been stalled by a small group in the Senate. Anxious to avoid a government shutdown, both…
The National Association of Insurance Commissioners creates model laws for states to pass.

If the A Committee formally adopts the reworked annuity sales model next week, as expected, then it will go to the National Association of Insurance Commissioners’ Executive Committee and Plenary for final approval. States will then be able to adopt the new rules in 2020.

William Blair and Co., an investment bank and financial services company, issued the following news:. The U.S. House of Representatives set the stage for sweeping changes to retirement accounts by adding provisions of the Setting Every Community Up for Retirement Enhancement Act to a 2020 appropriations bill. If the bill is signed into law by President Trump–…
The U.S. Capitol.

The bill also expands opportunities for workers to obtain guaranteed lifetime income products, increases the age at which required minimum distributions must be taken from retirement accounts and repeals the age limit for IRA contributors – all of which can help ensure that retirees do not outlive their retirement savings.

According to the SEC's order, MetLife improperly released reserves for annuity benefits associated with MetLife' s Retirement and Income Solutions Business, which resulted in an increase in income. The SEC's order also finds that MetLife overstated reserves and understated income relating to variable annuity guarantees assumed by a MetLife subsidiary….
Voya Financial has a deal to sell of closed blocks of life insurance and annuities.

Voya Financial has an agreement with Resolution Life Group Holdings whereby Voya will divest its Individual Life and other legacy non-retirement annuities businesses. The general account assets associated with the products included in this transaction were $24 billion, Voya said.

BNY Mellon, a banking and financial services holding company, issued the following news release:. BNY Mellon's Pershing announced that it has completed the integration of its managed accounts technology with its annuity order entry platform, Subscribe (R), delivering advisors streamlined annuity purchasing and servicing capabilities within its managed…

CONTRIBUTED BY NATHANAEL R. HUGHES, MBA. With the hustle and bustle of the holiday season, it's easy to put your financial planning on the back burner. It's also easy for the treadmill of life to sweep us up through work, caring for children, home repairs, taking care of pets, etc. it can be hard to find time for anything else.
Annuities are attractive for advisors and clients because they offer income retirees cannot outlive.

Annuity sales fell in the third quarter 2019, decreasing 8.4% as the combined sales of fixed and variable annuities totaled $55.7 billion, according to data compiled by Beacon Research and Morningstar. Annuity sales are up 7.5% on a year-to-date basis, the report found.
Annuities are attractive for advisors and clients because they offer income retirees cannot outlive.

A class-action lawsuit alleging that Security Benefit Life Insurance Co. defrauded consumers by implementing a “fraudulent scheme” involving a proprietary index used in two fixed indexed annuities was quietly withdrawn last week.
The National Association of Insurance Commissioners creates model laws for states to pass.

A key National Association of Insurance Commissioners’ committee put its tentative stamp of approval Sunday on a strengthened suitability in annuity transactions model law. The annuity sales model could be sent to the states early in 2020.

PHP Leadership Continues to Expand ADDISON, Texas- December 5, 2019-. Robert Kerzner, CLU, ChFC, former President and CEO of LIMRA, LOMA, and LL Global Inc., is joining the PHP Agency Inc. Board of Directors. After graduating from Central Connecticut State University in 1974, Bob joined Hartford Life and set performance records in field sales and management.

HOLON, Israel, Dec. 5, 2019/ PRNewswire/– Sapiens International Corporation,, a leading global provider of software solutions for the insurance industry, announced today that Patriot Life Insurance Company, a North American life insurance provider with an extensive network of independent agents, upgraded to Sapiens UnderwritingPro for Life& Annuities…
Insurance agents do important work bringing security to families, Charlie Gipple says.
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Apparently, my kids don’t go to school and brag about how their dad sells indexed annuities. Stocks and bonds are clearly more glamorous. I wonder if my kids have watched too many Ken Fisher commercials?
The National Association of Insurance Commissioners creates model laws for states to pass.

The Annuity Suitability Working Group is preparing to present a tentative draft of its annuity sales model, which the group voted to finalize Nov. 5, to its parent committee this weekend in Austin, Texas. The model incorporates a best-interest standard into existing suitability principles.

Eight in 10 employers say their employees are struggling financially as they face persistent problems such as saving for retirement, paying down debt and dealing with medical expenses, to name a few, according to new research from Massachusetts Mutual Life Insurance Company. The 2019 MassMutual Workplace Financial Wellness Study 1 finds that 79% of…
Annuities are attractive for advisors and clients because they offer income retirees cannot outlive.

Variable annuity sales in the third quarter were $21.2 billion, an increase of 1% over the previous quarter. Variable annuities have no floor, and potential for gains/losses that are determined by the performance of the subaccounts that may be invested in an external index, stocks, bonds, commodities, or other investments.

The U.S. life/annuity industry increased its holdings in structured notes by one-third over a three-year period, with book adjusted/carrying value reaching $16 billion in 2018, up from $12 billion in 2015, according to an AM Best report. Larger insurers are the primary purchasers of structured notes, as they typically have more sophisticated investment…
Life and health insurance revenues were healthy in 2018, Tiburon Strategic Advisors reports.

“Moderate growth” is the projection for both the property & casualty and life/health sectors going forward, a leading analyst says, but far greater opportunities exist for certain products. In particular, long-term care insurance and longevity annuities could and should grow, said Chip Roame, managing partner of Tiburon Strategic Advisors.

Year-to-date pension buy-out sales were $16.7 billion, more than 4% higher than the first nine months of 2018. There were 111 new buy-out contracts sold in the third quarter bringing the year-to-date total to 301 compared with 281 contracts sold in the first nine months of 2018. Half of the companies reported an increase in contracts sold.

Its facility was at 1520 Germantown St. in Dayton, with a satellite office at 8145 N. Main St. in Clayton. The judgment announced Wednesday follows an investigation by the U.S. Department of Labor’s Employee Benefits Security Administration’s Cincinnati office, which found that the mental health service provider and fiduciaries Gayle Johnson and Akil Sharif…

Variable annuity sales were $26.5 billion in third quarter 2019, 6% higher than third quarter 2018, according to the Secure Retirement Institute. This represents the highest quarterly VA sales results in three years

WINSOR, Connecticut, Nov. 14– LIMRA issued the following news release:. We all know good customer experience when we see it. “Today’s consumers are comparing the experiences they have with financial services companies with the ones they have with tech firms, like Amazon, Apple and the like,” said Todd Silverhart, Ph.D., corporate vice president and director of LIMRA…

–The Guardian Life Insurance Company of America announced today that Andrew McMahon, an industry veteran and head of the company’s largest business, has been elected President by its Board of Directors. Mr. McMahon’s appointment is part of Guardian’s regular succession planning process and is effective January 1, 2020. Mr. McMahon, who joined Guardian in 2017,…

These legal documents can’t just be put in a drawer and forgotten for years and years. They need to be tended to periodically, or else they may cause problems when you need them the most.
The National Association of Insurance Commissioners creates model laws for states to pass.

An NAIC working group tentatively approved a new annuity sales model Tuesday. But the rule remains a long ways from the finish line. Next, the parent Life Insurance and Annuities (A) Committee will take up the rule during the fall meeting of the National Association of Insurance Commissioners.

Industry executives are stepping up lobbying efforts to persuade Senate Majority Leader Mitch McConnell, R-Ky., and Senate Minority Leader Chuck Schumer, D-N.Y., to take action on the Setting Every Community Up for Retirement Enhancement (SECURE) Act.

_ Brighthouse Financial Inc. on Monday reported third-quarter net income of $683 million, after reporting a loss in the same period a year earlier. On a per-share basis, the Charlotte, North Carolina- based company said it had net income of $6.06. Brighthouse Financial shares have increased 31% since the beginning of the year.
The National Association of Insurance Commissioners creates model laws for states to pass.

Insurance commissioners tabled a proposal today to create a Life Insurance and Annuity Illustration Working Group to complete a comprehensive and coordinated review of annuity and life insurance illustrations. The proposed working group would coordinate illustration issues, particularly with indexed products, across annuity and life insurance.
The National Association of Insurance Commissioners creates model laws for states to pass.

The Annuity Suitability Working Group will hold a two-hour conference call Tuesday that could run longer if that’s what it takes to finish, the group said. According to a call invite, the working group “wants to finish its work and forward the draft to the Life Insurance Committee for its consideration at the end of this call,” which would require a vote.

Less than three months after receiving an IRS Private Letter Ruling that eases the taxation of advisory fees, Great American Life ® released a new endorsement that goes one step further to simplify the payment of advisory fees from an annuity. Plus, clients had to consider how the withdrawal would affect their annuity benefits,” says Tony Compton, Great…

Security Benefit Life Insurance Company today announced the launch of its new Strategic Growth Series Annuities, two new fixed index annuities which offer contract-holders the ability to safely accumulate and grow retirement assets without the risk of market losses. “We set out to design an annuity series that provides financial representatives and…

VA sales have declined steadily over the last decade, having peaked at $184 billion in 2007. In 2018, VA sales dropped to approximately $100 billion, down 46% from 2007. Today, fixed annuity sales, led by FIAs, now surpass VA sales, stemming from the uncertainty created by the potential fiduciary rules the U.S. Department of Labor had contemplated a few years ago.
Annuities are attractive for advisors and clients because they offer income retirees cannot outlive.

A new study from BNY Mellon Investment Management revealed the majority of Americans surveyed have limited understanding about fixed income investing regardless of age, income or education level. For example, only 8% of those surveyed were able to identify the definition of fixed income investments.