Ohio National Officially Terminates Select VA Trails

Fixed index annuity sales and variable annuity assets hit record quarterly highs during the third quarter, according to the Insured Retirement Institute. Deregulation and product innovation are expected to fuel strong annuity sales into 2019, one analyst says.

A National Association of Insurance Commissioners’ working group is satisfying neither side with an annuity sales model law that is out for public comment. The draft avoids many of the controversial issues the working group debated over the past year.

–Come December 13, 2018, thousands of advisors will be out tens of millions of dollars as a result of Ohio National Life Insurance Company’s termination of trailing commission payments on its variable annuities with guaranteed minimum income benefit riders. Those harms are what led to the filing of a federal class action lawsuit by securities attorneys…

Up to 14 states are ramping up efforts to put agents under a fiduciary duty. New York is furthest along with a best interest rule, which faces an industry lawsuit that could be decided early in 2019. Otherwise, the NY rule is slated to take effect in August 2019.

AM Best cited increased profitability, improved regulatory and tax environments and a strengthening U.S. economy in adjusting its 2019 life insurance/annuities outlook from negative to stable. Also, an overall reduced balance sheet risk due to a proactive approach taken by companies in recent years is seen as a positive trend.

Athene Holding says a “first-of-its-kind” pension plan termination transaction with Bristol-Myers Squibb covers more than 24,000 active employee participants, retirees, beneficiaries, and former employees. Athene will administer annuity contracts that could total $3.8 billion in the deal.

A.M. Best recently met with the Ohio National management team to discuss a series of recent events, including the insurer being sued several times for a decision to end trail commissions on certain annuities. A.M. Best is sticking with its strong ratings for now.

Third-quarter fixed indexed annuity sales were $18 billion, 38 percent higher than 3Q 2017 and 2 percent higher than second-quarter sales results.

The National Association of Insurance and Financial Advisors’ New York chapter filed a lawsuit to stop the state’s controversial best-interest rule. The rule is “arbitrary and capricious” and was crafted outside of the New York Legislature, the lawsuit claims, which has the proper authority.

Ohio National has no plans to reverse its controversial decision to end trail commissions for select variable annuity contracts, a company spokesman said today. The company announced the surprise departure Tuesday of president and chief operations officer Christopher Carlson after just three months.

Ohio National named a new president/COO Tuesday and announced the surprise departure of Christopher Carlson just three months after he ascended to the top post. The company has had a turbulent fall after announcing in September that it would end trail commissions on certain variable annuities.

The Big I and the Professional Insurance Agents of New York filed a lawsuit today asking a New York court to throw out the best-interest regulation approved by state officials this summer. The new standard is “extremely troubling,” plaintiffs said in a press release.

Recent increases in annuity rates, coupled with incentives being offered by product manufacturers have translated to sales momentum, according to Wink’s Sales and Market Report.

New York finalized its best-interest standard in July for both annuity and life insurance sales. A new report finds that insurers are facing higher compliance costs that come with retraining sales staff and other associates involved in annuity and life insurance transactions.

Veritas Independent Partners, an independent broker-dealer based in Conway, Ark., filed a lawsuit in the Southern District of Ohio court asking the court to require Ohio National to continue paying trail commissions per their contracts.

The first lawsuit against Ohio National was filed this week by a Texas broker. Ohio National stunned the annuity sales industry with its September announcement that it will stop paying trail commissions on certain variable annuity contracts.

CINCINNATI, Nov. 6, 2018/ PRN ewswire/– The E.W. Scripps Company has entered into an agreement with Massachusetts Mutual Life Insurance Company to purchase a group annuity contract and transfer approximately $50 million of the company’s pension plan obligations. Through the transaction, Scripps will reduce its pension plan liabilities by approximately $50…

American Equity Investment Life Holding Company, a leading issuer of fixed index annuities, today reported third quarter 2018 net income of $169.3 million, or $1.85 per diluted common share, compared to net income of $57.0 million, or $0.63 per diluted common share, for third quarter 2017.. Non-GAAP operating income 1 for the third quarter of 2018 was $171.1…

Materion Corporation today announced that it has entered into an agreement to purchase a group annuity contract from Mutual of America Life Insurance Company to settle approximately $111 million of Materion’ s $256 million in outstanding U.S. pension obligations. “We’ re pleased to partner with Mutual of America to secure pension benefits for our…

An NAIC working group is debating whether to allow insurers to illustrate indexed annuities using indices that have been around less than 10 years. A new proposal would double that figure to 20 years. Opponents say the indices would not be accurate, nor easily understood by consumers.

–Effective immediately, American National announces the addition of a new tax-deferred fixed annuity and a limited premium whole life product, Limited Pay Whole Life Insurance.. David A. Behrens, President and CMO of American National Life Insurance Company of New York, stated,“ The addition of these two products to American National’ s New York portfolio, shows…

The transaction closed yesterday on the non- New York portion of the business, representing approximately 90% of the overall block of Group Payout Annuities. The closing on the New York portion is subject to New York regulatory approval and is expected to occur in early 2019.. Notes to Editors: The acquisition is structured as 100% reinsurance of a closed block…

A new LIMRA Secure Retirement Institute study of annuity owners finds the top two reasons consumers buy annuities are to supplement Social Security/pension income and to receive guaranteed income payments for life.

A fierce split on whether to extend annuity sales rules to in-force policies crippled a state insurance commissioners’ working group.

A National Association of Insurance Commissioners’ working group is on track to present a completed annuity sales model law to its parent committee.

The New York-California faction made a big push to beef up a proposed state insurance commissioners’ annuity sales rule, but the effort fell short when working group members rejected “best interest” language.

Members hope to reach tentative agreement on an annuity sales rule it can take to its parent committee during the NAIC Fall Meeting Nov. 15 in San Francisco.

A National Association of Insurance Commissioners’ working group will meet again in person – this time in Chicago. The group hopes to reach agreement between conservative and liberal factions on an annuity sales model law for the states to adopt.

An NAIC working group is debating whether to allow insurers to illustrate indexed annuities using indices that have been around less than 10 years. Opponents say the indices would not be accurate, nor would they be understood by consumers.

Cannex researchers found that the highest guaranteed income product varies significantly depending on the client – whether a man or a woman, a single person or a couple – as well as when income begins. Advisors need to rely on real analytics, one researcher said.

American Equity Investment Life Insurance Company ®, a leading underwriter of index and fixed rate annuities, announced a new fixed index annuity product to its competitive product portfolio. ABOUT AMERICAN EQUITY American Equity Investment Life Insurance Company ® is a full-service underwriter of fixed annuity products, with a primary emphasis on the…

–Cetera Financial Group ®, a leading network of independent firms supporting the delivery of objective retail financial advice, today announced the formation of its new Board of Directors, following the firm’s selection in July of Genstar Capital as its strategic partner to accelerate Cetera’s growth and success. Three of the new Board members– Ben Brigeman,…

Broker-dealers across the country and reeling and unsure how to respond to Ohio National terminating trail commissions on some of its variable annuities. At least one leading annuity analyst does not expect the ON decision to be repeated by other insurers.

The deal allows Jackson to distribute variable and index annuities through State Farm agents beginning in the second half of next year. State Farm has 19,000 independent contractors fanned out through nearly every Main Street in towns large and small in the U.S.

Ohio National will end broker compensation on existing variable annuity contracts with guaranteed minimum income benefit riders, the company announced last week. The decision is believed to be unprecedented and could wind up in court.

In October 2016, Merrill Lynch became the first broker-dealer to announce it would eliminate commissions from IRA accounts in response to the Department of Labor’s fiduciary rule. Now the firm is reversing that decision — sort of.

Insurance companies see adding annuities to platforms such as Envestnet as vital as advisors grow more fiduciary-focused.

Any investment product can be misrepresented or sold in an unscrupulous manner. But the truth is that today’s variable annuities have a lot to offer. Used in the right way, they can provide steady income and a reassuring sense of retirement security.