Ohio National Offers Annuity Buyouts
October 31, 2018 by Ross Snel
Ohio National Financial Services is offering buyouts to some variable-annuity customers, sparking criticism from financial professionals.
So reports InvestmentNews.
The offer appears to be related to Ohio National’s recent decision to cancel commission trails for advisors, some experts say. Early last month the insurer said it would stop writing new annuity contracts.
According to a filing with the SEC, Ohio National will begin offering “enhancement amounts” to holders of some variable annuities with guaranteed minimum income benefit riders.
To receive the payments, holders must either surrender their annuity contracts or transfer them into a product issued by an unaffiliated company. Ohio National will make the offer available from about Nov. 12 until about Feb. 11, but annuity holders are not obligated to accept it, the filing states.
Some financial professionals say the buyout offer might prompt advisors to swap clients’ Ohio National annuities for other companies’ products in order to continue receiving commission trails, InvestmentNews writes.
“I think it’s very calculated by Ohio National and I think it’s really disingenuous,” Kevin VanDyke, president and founder of Bloomfield Hills Financial, is quoted saying. “The bottom line is, they made promises to clients, and they don’t want to keep those promises, and they’re doing anything they can to get them to pull their money out.”