‘Reckless’ Ohio National VA Purge Not A Likely Trend: Analyst
October 9, 2018 by John Hilton
Broker-dealers are dealing with angry producers while unsure themselves how to respond to Ohio National terminating trail commissions on some of its variable annuities.
With Ohio National’s Sept. 28 decision to abandon those VA contracts, the company went where other insurers had not dared to go in an effort to shed costly guarantees.
The termination takes effect Dec. 12, and “all individual annuity sales compensation will cease at that time,” an Ohio National letter reads.
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“Other insurance executives have voiced to me how uninformed or reckless they believed this action to have been,” said Sheryl Moore, president and CEO of Moore Market Intelligence and Wink Inc.
“As a result of this feedback, I do not believe this will establish a precedent in the industry.”
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“If the agent’s not getting any commission, what’s his incentive to properly manage the assets?” Moore said. “How are they acting in their clients’ best interest if they’re cutting their agents’ commission? It’s almost as if they’re saying ‘We want you to get rid of this business.’”
