The Future of Variable Annuities

Ken Mungan and Casey Malone of Milliman, Chad Slawner and Guillaume de Gantes of McKinsey, Tim Paris of Ruark Consulting, Jerry Golden and Moshe Milevsky share their visions of the future of the variable annuity business.

Annuities and the Charles Schwab Deal

Most of the annuities now on the Charles Schwab and TD Ameritrade platforms are offered by mutual or foreign-owned life insurers. Lincoln Financial is the sole exception.

Marshmallows and Social Security

Should US retirees delay claiming Social Security until age 70, even if they have to spend savings until then? The Center for Retirement Research at Boston College proposes that strategy as a default option in retirement plans.
Featured

Legal Deception: The M&E Fee

To make variable annuities more transparent and rehabilitate their reputation, start by not hiding commission recovery behind the so-called “mortality and expense risk” fee.

Lower-than-expected lapse rates led to VA charges: Moody’s

“Companies have some flexibility in deciding when to account for a change and when to take a charge,” said Neil Strauss of Moody's. “It’s a ball that can be kicked down the road. If policies go out-of-the-money, the lapse rates will be less of an issue."
News

Reverse mortgage program under stress

Instead of eliminating another popular product for older Americans, the Federal Housing Administration would prefer to detect and screen out applicants who are likely default on their reverse mortgage loans, the New York Times reported.

New report from Fitch Ratings on interest rate climate

This news item, which summarizes Fitch's "Good, Bad and Ugly" scenarios for future interest rate movements, contains a link to a copy of a new Fitch report, "Heightened Interest Rate Risk for U.S. Life Insurers."

MetLife not ‘too big to fail’: CEO Steven Kandarian

“To be clear, I support prudent regulation of the life insurance industry. After all, we are financially liable for insolvencies through the state-based guaranty funds. What I do not support is a regulatory system that creates an unlevel playing field," Kandarian said.

NEST shifts assets to U.S., absorbs €1.6 m fraud

The U.K.'s national publicly-supported defined contribution plan increased investment in North America to 35.9%, its single largest regional exposure. Allocation to Continental Europe, up nearly 3 percentage points, now accounts for 18.4% of investments.

The Bucket

Brief or late-breaking items from the Employee Benefit Research Institute, Lincoln Financial, Transamerica, Employee Fiduciary, The Principal and NEST.