Annuity News

Annuity Distribution Becoming Mired by Additional Suitability Rules and Regulations

The National Association of Insurance Commissioners (NAIC) recently amended its suitability requirements. The amendment makes insurers responsible for ensuring that all types of annuity sales or transactions are suitable. Industry participants are struggling with the increased administrative complexity. As discussed in a recent article in Investment News: “The big change is that it requires a complete secondary review somewhere in the chain of the distribution line up to the company,...

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SEC Seeking Simpler Annuity Prospectus

The Securities and Exchange Commission (SEC) is interested in reducing the complexity associated with annuity information. The SEC would like to try and develop user-friendly prospectuses that allow for greater transparency of product features and fees as well as an enhanced ability to compare like product types.

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TIAA-CREF CEO Urges Focus on Retirement Income Rather than Wealth Accumulation

TIAA-CREF CEO Roger W. Ferguson recently wrote a piece encouraging policymakers and consumers to think about reframing retirement planning . Ferguson urges readers to focus on the primary objective of a stable stream of retirement income that lasts throughout retirement rather than wealth accumulation.

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Obama Administration PLA Executive Order Goes Live

An executive order signed by President Obama within weeks of taking office went live yesterday. This executive order encourages all federal agencies to require project labor agreements ("PLA") for all construction projects over $25 million.

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Planning for the Magic Retirement Number

Attempting to determine the amount of money one will need in retirement is an exercise fraught with complexity and uncertainty. Wall Street Journal personal finance columnist Brett Arends offers his take on the right approach in a recent column. Arends suggests the following: Determine the amount of annual income you will need in retirement. Estimate your annual Social Security receipts. Subtract defined benefit pension income and any other source of annuity or pension-like income. Multiply the...

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Long Term Care 1035 Exchanges Developing Slowly

A provision of the Pension and Protection Act of 2006 went into effect this past January first which allows for a tax-free exchange (a Section 1035 exchange ) of annuities for long term care coverage. However, Investment News reports that there has been very little of this type of activity since the first of the year.

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New Longevity Hedge Fund Launched

The former founders of the life settlement desk at Goldman Sachs have recently launched a longevity -based hedge fund that will invest in life settlements. The name of the New York-based firm is Broad River Asset Management. The founders are currently seeking to raise initial capital . Source: HFMWeek

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Hartford Financial Services Pays Back TARP Funds and Realigns Business

The Hartford Financial Services Group recently repaid the $3.4 billion in federal aid (TARP funds) it received during the financial crisis. The company also suggested that it will avoid any business, product line and risk concentration in the future. Hartford suffered from heavy exposure to the variable annuity business. The company will now operate with three broad business units: consumer markets; commercial markets, and; wealth management . Source: Investment Advisor Full Story

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Grantor Retained Annuity Trusts at Risk

The status of grantor retained annuity trusts ("GRAT") is uncertain as a result of a bill that was recently passed by the House of Representatives. According to Investment News, "the Small Business and Infrastructure Jobs Tax Act of 2010 would impose a 10 year minimum for estate planning vehicles and would bar "zeroed-out" GRATS." Grantor retained annuity trusts are very efficient estate planning tools. A person using a GRAT would first place some assets in a trust. That person then takes back...

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New Rules for Fixed Annuity Suitability

The National Association of Insurance Commissioners (NAIC) has adopted an amendment that will affect the processes involved in determining the suitability of fixed annuity sales. Much of the supervisory responsibility for fixed annuity suitability will be shifted towards the insurance company . Broker -dealers will likely receive much of their guidelines, materials and recommendations from insurance companies. The result is an increase in compliance burden which will likely have the greatest...

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