Fixed Annuity News

The fixed annuity industry is constantly changing. From product evolution and distribution consolidation to pending regulation and legislation, NAFA works diligently to keep up with every aspect of the marketplace and provide you with its most pertinent news in a timely manner. Utilize the information below to read about recent media coverage in our Monday Media Reports, access monthly advocacy updates via The Call, visit our Press Room for the association’s most current news releases or to catch up on our Twitter feed.

Industry News

Removing roadblocks to choosing annuities
01 FEB – Susan Rupe- Insurance News Net

Seven in 10 Americans told a TIAA survey that receiving a guaranteed monthly paycheck during retirement is important. But only 13% of those responding to the survey said they actually purchased an annuity. So what hurdles must advisors help consumers overcome in order to make the annuity decision?

During a recent National Association for Fixed Annuities webinar, Patti Hausherr, vice president sales strategy leader with Athene, examined some of the reasons why consumers don’t buy annuities and how advisors can guide them.

Gaming the System in Annuity Illustrations
02 FEB – David Blanchett – Think Advisor

“To say that using historical returns in annuity illustrations for index-linked strategies is ripe for potential misrepresentation would be an understatement.

The index-linked annuity industry, which is currently primarily for fixed indexed annuities, continues to evolve, offering crediting strategies that are anything but vanilla. Recently, though, a strategy caught my eye on the S&P 500 index that seems too good to be true — which it probably is.”

What Is a Guaranteed Lifetime Annuity?
02 FEB – SmartAsset Team – Yahoo! Finance

“Ensuring that you have enough income to cover your living expenses and support your lifestyle is one of the central financial challenges of retirement planning. Guaranteed lifetime annuities are designed to help retirees do just that, providing a stream of guaranteed income for life. However, like all investment products, they come with their own set of advantages and disadvantages. A financial advisor can help you determine whether a guaranteed lifetime annuity might fit your financial needs in retirement.”

What Happens if Your Annuity Provider Fails?
04 FEB – Karen Doyle – Nasdaq

“If you have investable assets, you’ve probably heard of annuities. An annuity is a contract between an investor and an insurance company. The investor pays a sum of money (the premium) to the insurance company, either all at once or in a series of monthly payments. The insurance company agrees to pay the investor a series of payments, beginning at a later date, usually for the rest of their life.”

NY’s proposed AI rules seen as just the start for insurance carriers
05 FEB – Doug Bailey – Insurance News Net

In a likely harbinger of what’s to come from U.S. regulators, the New York Department of Financial Services recently issued proposed rules on how insurance carriers should use artificial intelligence and alternative data in underwriting and pricing.

The NYDFS circular letter said it expects carriers will establish governance protocols for AI systems and so-called external consumer data and information sources (“ECDIS”) and employ fairness testing of predictive models and variables before they are put into use. Currently, insurers aren’t required to abide by testing obligations when using AI in underwriting and pricing.

05 FEB – Ian Berger – Ed Slott

“We’re getting lots of questions about the SECURE 2.0 change that allows annuitized IRA annuities to be aggregated with non-annuity IRA funds for required minimum distribution (RMD) purposes. This change could drastically reduce RMDs. But, without a proper valuation of the annuity from the insurance company, it will be difficult to take advantage of it.

When an annuity within an IRA is annuitized, RMDs are calculated differently than they are for other IRA funds. For the other (non-annuitized) funds, RMDs are calculated under the usual rule (prior-year 12/31 account balance divided by the owner’s life expectancy factor). But for the annuitized part, the annuity payments received during a year are considered the RMD for that year.”

SECURE Act 2.0: Important changes that you need to know
05 FEB – Thiago Glieger – Fed Week

The Secure Act 2.0 was signed as law at the end of 2022. This law brings several changes in the way that you should be planning for your retirement. There were dozens of provisions introduced, but we’ll cover some of the most important to federal employees to help them plan a better retirement.

Don’t Be Afraid Of Annuities. Your Clients Aren’t.
06 FEB – Steve Gresham – Financial Advisor

“Why would I give my clients’ money to another advisor? What would be my value?”

That was the common response in the early years when financial advisors were asked about managed accounts. Today, that product is a workhorse for our business. Financial advisors have amassed more than $11 trillion of client assets in this product, an idea once so abhorrent that when I suggested using them I was told I could lose my job because branch office managers were convinced the product would mean the collapse of their revenue.”

Proposed bill would require small employers to provide retirement plan access
07 FEB – ACLI – Insurance News Net

“Legislation introduced today would expand retirement savings opportunities for millions of workers by requiring businesses with ten or more employees to offer a workplace retirement plan.

The “Automatic IRA Act of 2024,” introduced by Rep. Richard Neal (D-Mass.), requires employers with ten employees or more to provide or arrange for access to an automatic retirement contribution plan for all full-time and long-term part-time employees. Workers could decline to participate or drop out at any time after enrollment.”

Fixed vs. Variable Annuities: The Tables Have Turned
07 FEB – Scott Stolz – Think Advisor

“A few years back, I asked an advisor why he had shifted to recommending fixed indexed annuities (FIAs) rather than variable annuities. His answer was very simple: “My clients are getting older, and they are more interested in protection than growth.”

This has proven to be a prophetic statement for the annuity industry. According to LIMRA, in 2013, fixed annuities and FIAs made up just 30% of the $230 billion in total annuity sales. Structured annuities were so new they were just 1% of total sales. Variable annuities dominated the market, with 62% of total sales.”

IRA Annuity Owners Can Lower RMDs – But There’s a Catch
08 FEB – Ian Berger – The Street

“There are a rising number of questions and concerns about the SECURE 2.0 change that allows annuitized IRA annuities to be aggregated with non-annuity IRA funds for required minimum distribution (RMD) purposes. This change could drastically reduce RMDs. A major concern is that without a proper valuation of the annuity from the insurance company, it will be difficult to take advantage of it.”

Monday Media Report

Monday Media Report

The NAFA Media Report features a summary of the previous week’s fixed annuity media coverage. NAFA welcomes your contributions and suggested additions.

Access the most current report »

The Call

The Call

The Call features timely and seasonal regulatory and legislative updates to help NAFA members stay on top of issues impacting their businesses. Both federal and state editions are distributed to keep you informed.

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