FINRA Sets Sights on Registered Index-Linked Annuities
November 11, 2020 by Melanie Waddell
FINRA is eying registered index-linked [aka structured] annuities as sales of the products skyrocket. During a virtual panel discussion at the Life Insurance Products 2020 conference, held by the American Law Institute, Brian Rubin, partner at Eversheds Sutherland, questioned FINRA CEO Robert Cook regarding the broker-dealer regulator’s exams of firms’ use and marketing of RILAs.
As Rubin explained, RILAs are annuities with floors and buffers that use a stock market index to determine gains and losses.
Wink’s note: While everyone has their own name for structured annuities, we do not want to confuse regulators, such as FINRA.
Escalating sales of indexed annuities also caused increased regulatory scrutiny at one time because of published sales estimates.
Structured annuities have surrender charges that range from 0 years – 10 years. (Yes, there are 10 different structured annuities with ZERO surrender charges and a single product with a 10 years surrender period; the median surrender charge period for these products is 4.72 years.