QUOTABLE

Of the four reasons why people bought an annuity — income, expenses, accumulation and legacy — income was by far the leading use, taking three of the top four reasons, according to the LIMRA report.

“What is important to annuity buyers varies significantly based on their age and life stage,” according to the report. “Older buyers, who often have more conservative investment allocations, are more likely to cite protection of principal. Younger buyers, who are less likely to have a pension and may have more unanticipated expenses, were more inclined to cite the guaranteed income features and access to their account balances.”

Dol Lawsuit Could Be Resolved Soon

It is nearly one year since the Department of Labor was sued twice after its investment advice rules took effect.

At least one of the courts is inching closer to a decision, plaintiffs say. The Federation of Americans for Consumer Choice, joined by a number of independent insurance agents and agencies, sued the DOL almost as soon as the investment advice rule took effect on Feb. 1.

FACC sued in a Dallas court, which is within the Fifth Circuit, where the appellate court struck down the DOL’s prior fiduciary rule. There it has languished ever since. But oral arguments are expected in January, said Kim O’Brien, CEO of FACC. A decision could come early in 2023, she added.

The American Securities Association also sued the DOL in the U.S. District Court for the Middle District of Florida. It claims the DOL overstepped its bounds with guidance issued in April 2021. But little progress has been made with the ASA lawsuit.

Published by the Trump administration to replace the fiduciary rule, the investment advice rule broadens the agency interpretation of who is considered a fiduciary.

Nationwide Focuses On Advisors With New Partnership

Advisor-focused annuities continue to grow, with RetireOne and Nationwide forming a new distribution partnership.

The deal will expand the distribution of Nationwide’s advisory annuity products, allowing Nationwide to reach new markets, the insurer said in a news release. RetireOne, an outsourced insurance desk, will begin distributing three of Nationwide’s advisory annuity solutions and the Nationwide Advisory Variable Universal Life product through its wholly owned broker-dealer, EF Legacy, the release said.

“Partnering with RetireOne demonstrates our commitment to providing a diverse portfolio that enables advisors and financial professionals to provide more holistic services to their clients,” said Eric Henderson, president of Nationwide Annuity.

LIFE/ANNUITY INDUSTRY POSTING STRONG INCOME

Americans bought life insurance and annuities in strong numbers in 2022.

The U.S. life/annuity industry reported a 25% increase in net income during the first nine months of 2022, to $31.4 billion from $25.2 billion, according to an AM Best report.

According to the report, the U.S. life/annuity industry’s total income rose by 4.1% from the same prior-year period, driven by a 7% increase in premiums and annuity considerations and a 2.6% increase in net investment income.

Total expenses for the industry grew 4.2%, largely due to a $38.6 billion reduction in net transfers to separate accounts.