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 (15,878)
  • Industry Conferences (3)
  • Industry Job Openings (9)
  • Negative Media (135)
  • Positive Media (73)
  • Sheryl's Articles (587)
  • Sheryl's Blogs (166)
  • Wink's Articles (222)
  • Wink's Blogs (209)
  • Wink's Press Releases (92)
  • Blog Archives

  • 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
  • FIA Complaints Rise Unexpectedly

    March 17, 2015 by Linda Koco, linda.koco@innfeedback.com

    The number of closed complaints involving fixed index annuities (FIAs) rose 68 percent in 2014 compared with the previous year, according to a report from Index Compendium. That’s a decided departure from the past several years, when complaints had been falling, and the researcher who has been analyzing this sudden turn said he is mystified.

    The percentage is substantial but it reflects a relatively small number of complaints over all, said Jack Marrion, president of the FIA research firm that released the findings.

    His company evaluates FIA complaint activity that the National Association of Insurance Commissioners (NAIC) reports annually.

    In 2014, there were 77 closed complaints involving FIAs, he said. That’s up from 46 in 2013.

    Closed complaints are grievances that state insurance regulators found to be valid and that they closed after resolution. States submit this data voluntarily, so the numbers may not be all-inclusive.

    It’s a puzzle

    Marrion told Annuity News that he is puzzled by the increase. In the past several years, the NAIC closed complaint numbers on FIAs have declined steadily, he said.

    The high over the past 11 years occurred in 2007, when the closed complaint total was 230. The total has been less than that in all subsequent years. For instance, the number dropped to 206 in 2009, and then 151, 80, 50, 54, and 46, respectively, in the following years.

    But then there was the surprising bump-up to 77 complaints last year.

    “If there was a rising tide of complaints involving FIAs being reported by NAIC, you’d think this would have shown up in the complaints reported by the Financial Industry Regulatory Authority (FINRA), too,” Marrion said.

    He checked the FINRA numbers but found no correlation.

    In 2014, he said, FINRA reported only two FIA-related complaints for the entire year. Both complaints were related to a representative’s failure to disclose FIA sales activity to the broker/dealer. In broker/dealer firms, such sales are considered violations of rules prohibiting “undisclosed outside business activities.”

    The FINRA complaint number for the year is the same as in 2013, when the self-regulatory authority also reported two complaints involving FIAs, Marrion said.

    In trying to discern what may have caused the spike in NAIC closed complaint data, Marrion said he considered shifts in product design, index strategy, suitability, distribution, misrepresentation, regulations and other possible triggering issues. But he said “nothing jumped out.”

    Liquidity issues have been the top reason for complaints historically, he added, but there was no particular change he could see in that area.

    “It could be that 2014 is an ‘outlier year,’” he said. In other words, the data may be something outside the norm. As such, it is something that decision-makers may want to know about but also may want to consider discounting, absent any significant reason to the contrary.

    Big or not big?

    In terms of overall trends, “the increase is big,” he said. “Or is it?”

    He raised the question because the 77 complaints for the year are far below the high of 230 complaints in 2007.

    His analysis shows that the 2014 numbers represent one complaint for every $633 million in FIA premium. “That’s almost identical to 2011, when complaints numbered 50,” he said.

    By comparison, in 2013 when there were 46 complaints, the results were better. In that year, there was one complaint for every $841 million in premium, he said.

    Going back to 2008, when there were 206 closed complaints, the picture was worse — i.e., one complaint for every $100 million.

    “In 2007, when complaints numbered 230, there was one complaint for every $109 million, so that was six times worse than in 2014.”

    In doing the 2014 analysis, Marrion said he looked at NAIC Aggregate Complaints, which showed 89 closed complaints involving FIAs in 2014 (and 57 in 2013). He extracted from the aggregate the complaints that were “mis-coded” (for instance, complaints against a carrier that has never sold FIAs). The resulting data refers to closed customer complaints of carriers that either currently offer or previously offered FIAs in 2013. Those carriers are associated with the 77 complaints for 2014.

    The Index Compendium ranks the carriers by number of closed complaints per carrier divided by that carrier’s annual sales. On this basis, five of the carriers in the top 10 for 2014 were ranked under 10th place last year. That is one more surprising twist to the 2014 complaint picture.

    Originally Posted at Annuity News on March 11, 2015 by Linda Koco, linda.koco@innfeedback.com.

    Categories: Industry Articles
    currency