We would love to hear from you. Click on the ‘Contact Us’ link to the right and choose your favorite way to reach-out!

wscdsdc

media/speaking contact

Jamie Johnson

business contact

Victoria Peterson

Contact Us

855.ask.wink

Close [x]
pattern

Industry News

Categories

  • Industry Articles (16,609)
  • Industry Conferences (3)
  • Industry Job Openings (38)
  • Negative Media (138)
  • Positive Media (73)
  • Sheryl's Articles (618)
  • Sheryl's Blogs (176)
  • Wink's Articles (242)
  • Wink's Blogs (260)
  • Wink's Press Releases (93)
  • Blog Archives

  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • December 2017
  • November 2017
  • October 2017
  • September 2017
  • August 2017
  • July 2017
  • June 2017
  • May 2017
  • April 2017
  • March 2017
  • February 2017
  • January 2017
  • December 2016
  • November 2016
  • October 2016
  • September 2016
  • August 2016
  • July 2016
  • June 2016
  • May 2016
  • April 2016
  • March 2016
  • February 2016
  • January 2016
  • December 2015
  • November 2015
  • October 2015
  • September 2015
  • August 2015
  • July 2015
  • June 2015
  • May 2015
  • April 2015
  • March 2015
  • February 2015
  • January 2015
  • December 2014
  • November 2014
  • October 2014
  • September 2014
  • August 2014
  • July 2014
  • June 2014
  • May 2014
  • April 2014
  • March 2014
  • February 2014
  • January 2014
  • December 2013
  • November 2013
  • October 2013
  • September 2013
  • August 2013
  • July 2013
  • June 2013
  • May 2013
  • April 2013
  • March 2013
  • February 2013
  • January 2013
  • December 2012
  • November 2012
  • October 2012
  • September 2012
  • August 2012
  • July 2012
  • June 2012
  • May 2012
  • April 2012
  • March 2012
  • February 2012
  • January 2012
  • December 2011
  • November 2011
  • October 2011
  • September 2011
  • August 2011
  • July 2011
  • June 2011
  • May 2011
  • April 2011
  • March 2011
  • February 2011
  • January 2011
  • December 2010
  • November 2010
  • October 2010
  • September 2010
  • August 2010
  • July 2010
  • June 2010
  • May 2010
  • April 2010
  • March 2010
  • February 2010
  • January 2010
  • December 2009
  • November 2009
  • October 2009
  • August 2009
  • June 2009
  • May 2009
  • April 2009
  • March 2009
  • November 2008
  • May 2008
  • February 2008
  • August 2006
  • Annuity Surprises Could Be Jump-Starters

    August 14, 2012 by N/A

    The annuity market is never short on surprises, and the past few weeks have been no exception. Sometimes the surprises are jolts. This time, they are more like jump-starters.

    For instance, two annuity resources reported upticks in their annuity activity data. This is despite the general sluggishness in the annuity business that’s been showing up in the more recent sales data.

    One of these is the Depository Trust & Clearing Corporation (DTCC) Insurance & Retirement Services (I&RS). The New York firm says that the annuity inflows it processed in May reached $7.5 billion, up by just over 1 percent from $7.4 billion in April.

    That increase is not a jaw-dropper, but it’s certainly interesting given that the overall trend in activity recorded by DTCC has been down in the past 13 months. The high during the 13-month period occurred in August 2011, when inflows were over $8.6 billion.

    Inflows reflect the annuity transactions that DTCC processes daily for the industry through its Analytic Reporting for Annuities online service. Whether the upturn in those inflows reflects more firms using the annuity service and/or more use of the service by existing firms, annuity professionals will likely view the May bump-up as positive, especially in comparison to that the 13-month history reported by DTCC.

    More income annuity quotes

    Another surprise comes from CANNEX. It says it processed 9,000 more quotes for single premium income annuities in second quarter 2012 than in first quarter. The Springfield, Mass. firm tracks searches for single premium income annuity premiums, products and companies that financial advisors submit in the U.S. on behalf of clients.

    Total quotes for second quarter came to nearly 131,800, up from nearly 122,700 in first quarter, the company says.

    That suggests either more advisors were seeking income annuity quotes on the firm’s system, and/or that same number of advisors had increased their income annuity quoting activity. Either way, the quote search numbers seem to mesh well with another annuity surprise—the 23 percent increase in income annuity sales that Beacon Research recently reported for first quarter 2012 over the same quarter last year.

    Beacon points out that first quarter income annuity sales did not perform as well on a quarter-over-quarter basis. Sales for the products were down by 3 percent compared to fourth quarter 2011, the Evanston, Ill., firm says. Then again, total annuity sales were also down, quarter over quarter, so the decrease may not be significant.

    When second quarter sales numbers come out in a few months, it will be interesting to see if the quoting activity detected by the CANNEX system shows up in income annuity sales reported out by Beacon. If more quotes are being made, could more sales be far behind?

    At least one company will be contributing to any uptick that may show up in the second quarter income annuity sales numbers. That is New York Life. The carrier is reporting that premiums for its Guaranteed Future Income Annuity product (a deferred income annuity it has been distributing since July 2011) totaled $500 million by June 2012. In the commodities market, that would buy a lot of bananas, so to speak.

    Not a swap

    Yet another surprise came from Washington. Last week, the Commodities Futures Trading Commission and the Securities and Exchange Commission jointly issued rules they have approved that will define derivative products such as swaps.

    As readers will recall, unregulated use of swaps and related derivatives played a key role in the mortgage-backed securities dealings that were central to the financial downturn of 2007-2009. The 2010 Dodd Frank Act enacted in the aftermath of the meltdown required the federal agencies to develop the definitions as part of sweeping financial reforms. Now those definitions are complete.

    In terms of everyday life insurance and annuity dealings, having swap definitions firmed up might appear to be no big deal. After all, most life and annuity professionals do not think of, or present, their products as swaps.

    However, at the industry level, the definitions are a very big deal. Life insurance and annuity experts have been concerned that the final regulations might somehow include insurance and annuity products in the swaps definition. If that were to happen, they warned, some insurance and annuity products could become subject to federal regulation as swaps. The impact on the current state regulatory system is hard to fathom.

    Now, for the surprise. It appears to be a good one for the insurance and annuity sector, and state regulators too.

    The final rules appear to exclude life insurance and annuity products from the definition of swaps and related derivative products.  See this Securities and Exchange Commission summary and in particular, its discussion titled Products that Are Not “Swaps” or “Security-Based Swaps.”  Also see the Draft of the final rules from the Commodity Futures Trading Commission.

    Unless something changes to alter that interpretation, that development spells “relief” for interests who want to preserve state regulation of insurance and annuity products.

    Note: The Securities and Exchange Commission points out that, “Once both agencies adopt the final rules, they will become effective 60 days after the date of publication in the Federal Register.” Until then, the federal agencies continue to refer to the rules as a draft. But insurance experts are treating them as final, and they are now combing over the language for analysis purposes. Look for industry commentary about this in the coming weeks and months.

    Originally Posted at InsuranceNewsNet on July 18, 2012 by N/A.

    Categories: Industry Articles
    currency