The Department of Labor's final fiduciary rule, published April 6, threw a bucket of cold water on the annuity industry's hottest product, fixed indexed annuities.
For 2015, LIMRA reported that sales of FIAs grew by 13 percent year-on-year to a record $54.4 billion. More than 60 percent of FIA sales are qualified – held in retirement plans or IRAs.
FIAs put an insurance company's guarantee behind all principal while crediting an annual interest rate linked to a market index, up to a cap. Since clients can't lose money, regulators generally have treated FIAs the same as fixed annuities – not as registered securities products like variable annuities. When sold in retirement plan accounts, FIAs have been subject to the same PTE 84-24 exemption as guaranteed life insurance contracts and fixed annuities.
Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.
Your access to unlimited BenefitsPRO content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Critical BenefitsPRO information including cutting edge post-reform success strategies, access to educational webcasts and videos, resources from industry leaders, and informative Newsletters.
- Exclusive discounts on ALM, BenefitsPRO magazine and BenefitsPRO.com events
- Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com
Already have an account? Sign In
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
