Annuities

News & Analysis as of

Court Rules Fixed Income Annuity Is Not A Security Under The CSL

Because annuity contracts involve the payment of money in the expectation of future payments, one might conclude that they are securities within the meaning of the California Corporate Securities Law of 1968. Evidently, that...more

DOL Prevails Again and NAFA Moves on to the Circuit Court Challenging the Conflict of Interest Rule and Related Exemptions

On November 23, 2016, Judge Moss in the U.S. District Court for the District of Columbia again ruled in favor of the Department and denied the renewed motion for a preliminary injunction brought by the National Association...more

The Battle Over the New Fiduciary Rule

On April 6, 2016, the U.S. Department of Labor (“DOL”) issued its final rule expanding the definition of the “investment advice fiduciary” under the Employee Retirement Income Security Act of 1974 (“ERISA”) and modifying the...more

NY DFS Proposes New Regulation for Life and Annuity Non-Guaranteed Elements

On November 17, the New York Department of Financial Services (DFS) issued a press release announcing its proposal of new Insurance Regulation 210 - Life Insurance and Annuity Non-Guaranteed Elements. Non-guaranteed elements...more

DOL “Investment Advice” FAQs: Considerations for Investment Advisers, Broker-Dealers and Insurance Companies

The U.S. Department of Labor (DOL) issued in April 2016 the final version of its controversial “investment advice” regulation and various related exemptions (collectively, Final Rules), which are widely expected to have a...more

DOL Prevails In First Challenge to the Conflict of Interest Rule and Related Exemptions

On November 4, 2016, Judge Moss in the U.S. District Court for the District of Columbia granted the U.S. Department of Labor’s motion for summary judgment and dismissed claims brought by the National Association for Fixed...more

'Fiduciary Rule' Update: Financial Services Industry Should Prepare for Compliance

The U.S. Department of Labor (DOL) scored an initial victory in what is sure to be a long legal battle over the so-called "fiduciary rule." Judge Randolph D. Moss of the U.S. District Court for the District of Columbia issued...more

What’s Your Game Plan? Offensive or Defensive: Playing to Your Strengths [Expect Focus – October 2016]

- AXA Prevails at First Post-Jones v. Harris Excessive Fee Trial - Potential Secondary Effects of Regulatory Examinations: Evidentiary Issues and Preclusion in Parallel Litigation - On The Horizon: Global...more

UK Regulator Cancels Proposed Secondary Annuities Market

The UK Government announced that it would not be taking forward its plans to create a secondary market for consumers to sell their annuity income...more

NAIC Life Actuarial (A) Task Force Approves Revisions to Actuarial Guideline 49 for Exposure and Comment

On October 20, the NAIC Life Actuarial (A) Task Force (LATF) of the Life Insurance and Annuities (A) Committee met and approved proposed revisions to Actuarial Guideline 49 (AG 49) for exposure and comment. If adopted, the...more

Illinois Courts: Fixed Indexed Annuities Are Not Securities

In 2009, the Securities and Exchange Commission (SEC) attempted to regulate fixed indexed annuities (FIAs) as securities by issuing Rule 151A. Previously, FIAs were treated as exempt insurance products. After the D.C. Circuit...more

Recent Insurer Victories in Indexed Annuity Class Actions

Recent federal court decisions effectively terminated two class action lawsuits challenging indexed annuity sales, seemingly ending an extended wave of class litigation in the federal courts against multiple insurers...more

Treasury Makes it Easier for Pension Plans to Pay Partial Annuities

The Department of Treasury has issued final regulations that simplify the rules that allow retiring participants to simultaneously elect a partial lump sum and a partial annuity from a defined benefit pension plan. Under the...more

Now You Can Have Your Cake and Eat It Too: New Pension Distribution Rules Allow More Flexibility

If you are one of the lucky few employees who participate in an employer’s defined benefit retirement plan, you previously had to choose between receiving your benefits in a lump sum or in annuity payments. However, in the...more

Final IRS Regulations Simplify Pension Plan Requirements for Partial Annuity Distributions

The Department of Treasury and Internal Revenue Service issued final regulations addressing the minimum present value requirements for pension benefits payable partly as an annuity and partly in an accelerated form, usually a...more

IRS Provides Sample Language for “Qualified Contingency” to Meet “Probability of Exhaustion Test”

One of the many requirements that a trust must meet in order for it to qualify as a Charitable Remainder Annuity Trust (“CRAT”) is the “Probability of Exhaustion Test”. This test applies to CRATs whose annuity term is based...more

IRS Releases October 2016 Interest Rates

The 7520 rate for October 2016 has increased to 1.6%. The October 2016 Applicable Federal Interest Rates can be found below....more

Chamber files amicus brief in support of challenge to CFPB jurisdiction

The Chamber of Commerce of the United States of America (Chamber) has filed an amicus brief opposing the CFPB’s petition filed in the Eastern District of Pennsylvania to enforce its civil investigative demand (CID) issued to...more

Update on Lawsuits Challenging the U.S. Department of Labor’s Fiduciary Rule

As we previously reported, there are five pending lawsuits challenging the U.S. Department of Labor’s new fiduciary rule. Our Client Alert on the new rule outlines the significance of the rule and the implications of the...more

NAIC Life Insurance and Annuities (A) Committee Adopts Revisions to Actuarial Guideline 49

On July 27, 2016, the Life Insurance and Annuities (A) Committee adopted revisions to Actuarial Guideline 49 (AG 49) to address situations where indexed universal life (IUL) insurance policies make available multiple index...more

IRS Issues Clarification on Phased Retirement Payments

Typically, when a participant receives annuity payments from a defined benefit pension plan where he or she has a basis in the benefit (what Code Section 72 calls an “investment in the contract”), a portion of the payment is...more

Don’t be Phased by Annuity Treatment: Taxation of Distributions During Phased Retirement

On June 10, the Internal Revenue Service (IRS) issued Notice 2016-39 in response to inquiries regarding the appropriate tax treatment under section 72 of the Internal Revenue Code (the Code) for payments received by an...more

IRS Releases July 2016 Interest Rates

The 7520 rate for July 2016 has remained at 1.8%. The July 2016 Applicable Federal Interest Rates can be found below. Section 1274.--Determination of Issue Price in the Case of Certain Debt Instruments Issued for...more

CFPB takes another challenge to its jurisdiction to court

The CFPB filed suit against J.G. Wentworth, LLC on June 7, 2016 after the company challenged the Bureau’s expansive view of its jurisdiction. The CFPB served a CID against J.G. Wentworth, LLC on September 11, 2015 to...more

Charitable Remainder Trusts: A Viable Strategy for Building Wealth, Maximizing Tax Deductions, and Supporting a Beloved Charity

While most of us think of charitable giving around the holidays (or around tax time!), for many it is prudent to plan your giving to receive all of the benefits that are available to you. Planned giving comes in many forms...more

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