Annuities

News & Analysis as of

Florida Modifies Its Annuity Suitability Rule

On October 1, the Florida Department of Financial Services (DFS) amended Florida Administrative Code Rule 69B-162.011, "Suitability and Disclosures in Annuity Contracts – Forms Required" (the Suitability Rule). This amendment...more

PBGC Intends to Monitor Lump-sum and Annuity Cashouts Under Defined Benefit Plans

The Pension Benefit Guaranty Corporation (PBGC) stated in a filing published in the Federal Register on September 23, 2014, that it intends to require that plan sponsors report to the PBGC “certain undertakings” to cashout or...more

The Golden State Annuity Burglar: A Neasham Remix

Alan Lewis, a former California insurance agent who faced criminal charges for annuity "twisting," was released from jail after a Superior Court judge dismissed charges for embezzlement, grand theft, and burglary. The story...more

The NAIC Considers a Stable of Issues at the Summer National Meeting

During the 2014 Summer National Meeting, contingent deferred annuities led the way with the most NAIC groups considering the regulation of CDAs. - At the head of the pack was the CDA (A) Working Group, which received...more

Iowa Issues Bulletin on Index Annuity Marketing Materials

On September 15, Iowa Insurance Commissioner Nick Gerhart issued Bulletin 14-02 regarding Insurance Marketing Organizations (IMOs). Bulletin 14-02 sets forth Iowa Insurance Division (IID) concerns with the following index...more

Louisiana Issues Advisory Letter Regarding Use of the Social Security Administration's Death Master File

On September 4, the Louisiana Department of Insurance issued Advisory Letter 2014-04 (the "Advisory") to advise all life and annuity insurers licensed in Louisiana regarding use of the Social Security Administration's Death...more

Florida Proposes Rule for Annuity and Life Insurance Surrender Disclosures

On September 4, the Florida Department of Financial Services (the "Department") published a Notice of Rule Development for Proposed Rule 69B-215.090, Florida Administrative Code (the "Proposed Rule") setting out disclosure...more

Minimum Distribution Planning with QLACs

Effective July 2, 2014, newly issued Treasury Regulations define a new type of investment vehicle: the Qualified Longevity Annuity Contract (QLAC). A QLAC is basically a deferred fixed income annuity purchased in an...more

Mitigating Longevity Risk in DC Plans

401(k) participants face the risk of outliving retirement assets. However, earlier this month, the Internal Revenue Service and the Treasury Department issued final regulations that make it easier for 401(k) plans, individual...more

VA Switches: FINRA Disciplinary Action Reminds Firms About the Need for Adequate Supervisory Procedures

In a case involving unsuitable variable annuity (VA) transactions, FINRA found that having good procedures and discovering improper conduct are not enough. A member firm must also ensure that it has adequate supervisory...more

IRS Gives QLACs the Green Light: Final Regulations Issued

On July 1, 2014, the Internal Revenue Service (“IRS”) issued final regulations (“Final Regulations”) that permit employers and IRA providers to offer “qualified longevity annuity contracts” or “QLACs” under defined...more

STOA Schemes Face Increased Regulatory Scrutiny

Increased SEC and Justice Department prosecution is bad news for stranger-originated annuity (STOA) schemes. The SEC recently announced that enforcement actions were taken against brokers Michael A. Horowitz of California and...more

RMD Rules for Longevity Annuities Finalized

Longevity annuities are contracts that provide life annuity payments typically commencing at age 80 or 85; in many (but not all) cases, that is the only benefit the contract provides. As such, these contracts may offer...more

Idaho Unclaimed Property Rule: Insurers Must Confirm Whether Insureds Have Died

In a recently issued notice of rulemaking, the Idaho State Treasurer’s Office has proposed a temporary rule that, if permanently adopted, would alter two key definitional provisions in the state’s unclaimed property laws...more

Variable Annuities Still In The Crosshairs

For the first time in several years, variable annuities are not listed as a priority in FINRA’s annual letter of regulatory and examination priorities. The omission from the January 2, 2014, letter may be partly due to the...more

Case Closed: No More Neasham

As reported in previous Expect Focus issues, People v. Neasham involved an insurance agent’s criminal conviction for felony theft in connection with the sale of an annuity to an elderly woman whom prosecutors claimed had...more

De-Risking Your Retiree Pensions? Verizon Court Affirms Plan Sponsor Rights to Shed Obligations

Plan sponsors interested in removing pension liabilities from their balance sheets have been waiting with interest to see the end result of the challenge by Verizon retirees to Verizon’s deal with Prudential annuitizing...more

The NAIC Considers Whether A New Framework Should Apply To Innovative Annuity Products

The Life Actuarial Task Force's Index-Linked Variable Annuities (A) Subgroup (the "ILVA Subgroup") began a fresh look at the regulatory framework for annuity products. On February 6, it held a call to review its January 15,...more

FIO Focus, Issue No. 45: The Modernization Report: Federal Action May be Warranted

Devoted to exploring the progress of the modernization of the insurance industry, FIO Focus provides information and insights about the organizations and issues that are driving change and influencing the future of the...more

Wealth Management Update - December 2013

The December § 7520 rate for use with estate planning techniques such as CRTs, CLTs, QPRTs and GRATs is 2.0%, which is unchanged from last month. The December applicable federal rate ("AFR") for use with a sale to a defective...more

‘Tis the Season – For Year-End Charitable Giving

Most people make the bulk of their charitable contributions during the year-end holiday season. This post summarizes some of the charitable giving ideas and opportunities, as well as some planning reminders, that donors may...more

Sale For Annuity Results In §2036 Inclusion

In a recent Tax Court case, a decedent had sold properties to trusts in exchange for fixed annuity payments. The decedent died during the term of the annuities, and the IRS sought to include the value of the transferred...more

Using an Annuity to Keep the Spouse of a Medicaid Applicant from Becoming Impoverished

When one spouse qualifies for Medicaid to pay for a nursing home stay, the spouse who is at home is often left without many resources. While Medicaid has rules to prevent community spouses from impoverishment, the protections...more

Pennsylvania Commonwealth Court Holds Structured Settlement Annuity Is Transfer for Less Than Fair Market Value Under the Deficit...

The Pennsylvania Commonwealth Court’s recent decision in the matter of Sams v. Department of Public Welfare may significantly affect the structured settlement industry, and the settlement of lawsuits on behalf of certain...more

Illinois Supreme Court to Debate Pensions for Firefighters' Spouses

Our previews of the oral arguments on the Illinois Supreme Court’s September docket begin with Hooker v. Retirement Fund of the Firemen’s Annuity and Benefit Fund of Chicago, which is set for argument this morning, September...more

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