By now we’ve all heard about and had a few weeks to celebrate the repeal of 151A.
After a two-year battle with the Securities and Exchange Commission over the status of indexed annuities, the District of Columbia U.S. Court of Appeals vacated Rule 151A. Following that, Iowa Senator Tom Harkin added an amendment to the Dodd–Frank Wall Street Reform and Consumer Protection Act which would ensure state regulation of indexed annuities, and President Obama signed the Consumer Protection Act at the end of July.
While indexed annuities have secured a fixed insurance status, there are many issues a producer must consider. Suitability is more than just a buzzword—it is the standard on which all sales must be built.
The NAIC 2010 Suitability Model 275 is what producers must follow when selling indexed annuities and what carriers must use as a guide when monitoring annuity sales and education. All agents must take a certification course related to the fundamentals and material features of fixed annuities by January 1, 2011, as required by the Model.
Various groups within the industry are working on how to address this requirement and provide the product-specific training. NAFA (www.nafa.com) is a good starting point for more information about coursework.
Some of the best advice about this situation came from Sheryl Moore, AnnuitySpecs, when she said, “In the future, we need to ensure that the facts about insurance products are widely available, so that consumers can access unbiased information about the benefits of owning these products.
“We also need to hold our legislators close. Despite indexed annuities ensuring their fixed insurance status, there may be other issues in the future. We need to take what we have learned from the 151A battle and always be prepared, proactive, and ready to fight.”
This issue’s focus is on indexed and equity product practices and it is full of creative sales and marketing concepts. In addition, four annuity marketing organization leaders have presented some useful insights in the Annuity Round Table.
One last “FYI” about indexed annuities: LIMRA has just reported that year-to-date (through second quarter) estimated sales are $15.2 billion. The figures are based on data from 62 companies that represent 95 percent of total sales.
Don’t forget, September is Life Insurance Awareness Month. The LIFE Foundation will work hard throughout September to encourage all Americans to take stock of their life insurance needs. They have designed some creative ways to get Americans thinking about their need for coverage.
To find our more about what they have planned, go to http://lifehappens.org/liam/liam-plans. [SAC]
