Industry Perspective on DOL Fiduciary Rule Impact

by on May 04, 2017

Last week, Corporate Insight attended the LIMRA Retirement Conference. The tenor of this year’s conference was strongly affected by the uncertainty surrounding the DOL fiduciary rule, although most firms already have plans underway for meeting the new standards. As one speaker remarked, DOL stands for “Document or Litigate.” The need for firms to adjust compliance and product offerings is obvious.

Products have begun to shift in response to the DOL fiduciary rule, per sales figures shared at the conference. Fixed indexed annuity sales immediately rose after the initial release of the rule under the assumption that they were subject to the 84-24 exemption. The April 2016 release listed FIAs under the Best Interest Contract Exemption and sales fell accordingly, with the downward trend continuing in 2017. While fee-based variable annuities are not new to market, more are being introduced in response to the DOL fiduciary rule. Fee-based FIAs were first introduced in 2015 and are currently offered by four firms, including Lincoln Financial Group and Allianz Life from our Annuity Monitor coverage group. According to LIMRA data shared during a breakout session at the conference, 75% of firms plan to come out with fee-based products.

Annuity Monitor will continue to track new product developments among our coverage group and firm communiques to clients and advisors addressing the DOL fiduciary rule.