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Department of Labor's fiduciary rule blamed for insurers' massive hit on variable annuity sales
InvestmentNews; Mar 28, 2017 @ 2:00 pm
The variable annuity industry took a beating in 2016, with several of the top sellers inking losses upwards of 25% on the year and some exceeding 40%.
The Department of Labor's fiduciary rule, issued in its final form last spring, played a big role in the industry's bruising, observers said.
"I think what happened last year, with the significant drop, the DOL played a huge role in that," said Bernie Gacona, senior vice president and director of annuities at Wells Fargo Advisors.
VAs Outlook: Worse Before it Gets Better
InsuranceNewsNet; March 28, 2017
The long-suffering variable annuity market is going to get worse before it gets better, a product expert with Morningstar said last week.
From new regulations issued by the Department of Labor to investment restrictions in subaccounts to stingier guarantees, variable annuity sales aren’t expected to pick up anytime soon – though no one is predicting the death of the variable annuity market.
Variable annuity sales volume of $100 billion won’t simply disappear overnight, but new sales have been thinning faster than the polar ice cap.