Jackson National Life Insurance Co. plans to reintroduce fee-based annuities in New York, weeks after the company suspended sales due to concerns about an insurance regulation that took effect in the state.
Jackson, which is the second-largest annuity seller in the U.S. in 2018, and other insurers had been concerned about a particular consumer disclosure required by Insurance Regulation 187, which took effect for annuity sales Aug. 1. (It takes effect Feb. 1 for life insurance sales.)
“Jackson has been working closely with the New York Department of Financial Services to resolve an issue involving a disclosure requirement within Regulation 187,” said spokesman Patrick Rich. “As a result of these discussions, Jackson is planning on reintroducing its fee-based annuities in New York.”
[Recommended video: Jamie Hopkins: Depression risk in retirement]
InvestmentNews reported last week that Lincoln Financial Group also plans to reintroduce its fee-based annuities in response to newly released guidance from New York insurance regulators.
New York’s regulation, which requires insurance agents and brokers to recommend products that are in consumers’ best interests, mandated that insurers offering both fee-based and commission-based annuities provide consumers with a comparison showing the differences between the products.
Insurers said the disclosure could create market confusion and they were also unsure of some of the compliance steps required. For example, would insurers that sell different versions of the same product through various broker-dealers have to include each version of the product in the disclosure?
Jackson National and Lincoln Financial Group are two insurers that suspended fee-based annuity sales in New York as a result, effectively leaving registered investment advisers who wished to sell those firms’ products without an option.
However, insurers appeared to have been reassured by the guidance, issued last Wednesday, which clarifies specific compliance steps for insurance companies.