We appreciate your business and wish you the best in the coming year
The Life and Annuity Shop, LLC.’s office will be closed Monday, December 26th, 2022 and Monday, January 2nd, 2023. Regular business hours will resume following the new year holiday, on January 3rd, 2023.
As Tropical Storm Nicole approaches Florida, the safety of our staff and their families is our top priority. For this reason, Our Office will be CLOSED Thursday, November 10. Our Disaster Response Team will continue to monitor the path of the Storm.
As Hurricane Ian approaches Florida, the safety of our staff and their families is our top priority. For this reason, Our office will be closed on Tuesday, Sept 27th to Thursday, Sept 29th. Our Disaster Response Team will continue to monitor the path of the hurricane.
New index offering from Credit Suisse addresses increasing demand for performative and sustainably focused investment opportunities
–News Direct–
A-CAP and AmeriLife today announced the addition of the Credit Suisse ESG Macro 5 Index (Bloomberg: CSEAGESG) to their industry-leading Accumulation Protector PlusSM (“APP”) Annuity, a 10-year fixed indexed annuity, offered through A-CAP’s subsidiaries, Sentinel Security Life Insurance Company and Atlantic Coast Life Insurance Company.
The Credit Suisse ESG Macro 5 Index will add an innovative, multi-asset approach, with a focus on environment, social and governance (ESG) standards. The index also offers exposure to components across regions and asset classes in an attempt to mitigate market unpredictability as well as benefit from opportunities across different market cycles and geographies.
“Two years ago, this month, we launched the APP Annuity offering exclusive access to the Credit Suisse Momentum Index and guaranteed participation rates for ten years. With a bespoke index designed to perform well in all market conditions, and a revolutionary, 10-year guaranteed participation rate product design, the APP Annuity was the first of its kind in our industry,” said Doug George, head of Life and Annuity for A-CAP. “Today, we are proud to further enhance the APP Annuity’s value by adding exclusive access to the Credit Suisse ESG Macro 5 Index with similar 10-year guaranteed participation rates.”
The fully rules-based Credit Suisse ESG Macro 5 Index provides a global equity component that offers exposure to a risk-weighted basket of four regional indices from leading ESG index provider MSCI, designed to maximize exposure to positive environmental, social and governance scores, as identified by MSCI. A basket of macro components, comprised of sub-strategies across fixed income, commodities and currencies components, further seeks to identify trend patterns in the markets and to benefit from the difference in yields between different instruments. Combined with a daily adjustment to target index volatility a 5% to generate consistent returns over time, the Credit Suisse ESG Macro 5 index seeks to combine stable growth with sustainably focused and impact investment.
“We are thrilled that A-CAP and AmeriLife have collaborated with Credit Suisse again,” said Andrew Ip Ping Wah, head of Insurance Solutions for Credit Suisse. “The Credit Suisse ESG Macro 5 Index provides a new option to policyholders wanting exposure to companies filtered through MSCI’s Environmental, Social and Governance criteria.”
“Since its launch in 2020, the APP Annuity has proven to be a differentiator for AmeriLife’s distribution and a key offering of our holistic product portfolio,” added Denny Southern, president of Annuity & Retirement Planning for AmeriLife. “The addition of the Credit Suisse ESG Macro 5 Index will only make this incredible product better by delivering the diversity, flexibility and performance that today’s discerning investors are craving.”
The product and indices described above are a summary only. All benefits and features are subject to the actual terms and conditions of the annuity contract. To learn more about the Accumulation Protector Plus℠ (“APP”) Annuity and the Credit Suisse ESG Macro 5 index, licensed agents and financial advisors can visit www.sslco.com/app, www.aclico.com/app, indices.credit-suisse.com/CSEAGESG, or contact Sentinel Security Life Insurance Company’s sales team at 800-247-1423 and Atlantic Coast Life Insurance Company’s sales team at 844-442-3847.
Attributions and Disclaimers with Respect to Credit Suisse
The Credit Suisse Momentum Index and the Credit Suisse ESG Macro 5 Index (the “Indices”) and “Credit Suisse”, and any trademarks, service marks and logos related thereto are service marks of Credit Suisse Group AG, Credit Suisse International, or one of their affiliates (collectively, “Credit Suisse”). Credit Suisse has no relationship to Atlantic Coast Life Insurance Company or Sentinel Security Life Insurance Company, other than the licensing of the Credit Suisse Momentum Index and the Credit Suisse ESG Macro 5 Index and its service marks for use in connection with the Accumulation Protector PlusSM Annuity and certain hedging arrangements and is not a party to any transaction contemplated hereby. Credit Suisse shall not be liable for the results obtained by using, investing in, or trading the Accumulation Protector PlusSM Annuity. Credit Suisse has not created, published or approved this document and accepts no responsibility or liability for its contents or use. Obligations to make payments under the Accumulation Protector PlusSM Annuity are solely the obligation of Atlantic Coast Life Insurance Company or Sentinel Security Life Insurance Company and are not the responsibility of Credit Suisse.
There is currently no universal definition or exhaustive list defining the issues or factors that are covered by the concept of “ESG” (Environmental, Social, Governance). Credit Suisse’s view of ESG is based solely on Credit Suisse’s current opinions, assumptions, and interpretations, which may evolve over time and are subject to change.
MSCI Indices are the exclusive property of MSCI Inc. (“MSCI”). MSCI and the MSCI index names are service mark(s) of MSCI or its affiliates and have been licensed for use for certain purposes by Credit Suisse. The financial product referred to herein is not sponsored, endorsed, or promoted by MSCI, and MSCI bears no liability with respect to such financial product. The annuity contract or other governing disclosure document contains a more detailed description of the limited relationship MSCI has with Credit Suisse and any related financial product. No purchaser, seller or holder of this financial product, or any other person or entity, should use or refer to any MSCI trade name, trademark or service mark to sponsor, endorse, market or promote this financial product without first contacting MSCI to determine whether MSCI’s permission is required. Under no circumstances may any person or entity claim any affiliation with MSCI without the prior written permission of MSCI.
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About A-CAP
A-CAP is a holding company owning multiple insurance and financial businesses on its unique and synergistic platform. These businesses include primary insurance carriers, an SEC registered investment adviser, reinsurance vehicles, and marketing organizations. With broad knowledge across the insurance and investment sectors, A-CAP’s management team has diverse experience and provides comprehensive services to policyholders, insurance company clients and capital partners. Launched in 2013, A-CAP is a privately held company with offices located in New York, Charleston, Chicago, and Salt Lake City. For more information, visit www.acap.com.
About AmeriLife
AmeriLife’s strength is its mission: to provide insurance and retirement solutions to help people live longer, healthier lives. In doing so, AmeriLife has become recognized as the leader in developing, marketing, and distributing life and health insurance, annuities and retirement planning solutions to enhance the lives of pre-retirees and retirees across the United States. For more than 50 years, AmeriLife has partnered with top insurance carriers to provide value and quality to customers served through a distribution network of over 300,000 insurance agents and advisors and more than 100 marketing organizations and insurance agency locations nationwide. For more information, visit AmeriLife.com, and follow AmeriLife on Facebook and LinkedIn.
About Credit Suisse
Credit Suisse is one of the world’s leading financial services providers. The bank’s strategy builds on its core strengths: its position as a leading wealth manager, its specialist investment banking and asset management capabilities and its strong presence in its home market of Switzerland. Credit Suisse seeks to follow a balanced approach to wealth management, aiming to capitalize on both the large pool of wealth within mature markets as well as the significant growth in wealth in Asia Pacific and other emerging markets, while also serving key developed markets with an emphasis on Switzerland. The bank employs more than 50,000 people. The registered shares (CSGN) of Credit Suisse Group AG, are listed in Switzerland and, in the form of American Depositary Shares (CS), in New York. Further information about Credit Suisse can be found at www.credit-suisse.com.
Contact Details
AmeriLife
Jeff Maldonado
+1 321-297-1112
jmaldonado@amerilife.com
A-CAP
Kristen Jensen
+1 914-393-5472
kjensen@acap.com
Company Website
View source version on newsdirect.com: https://newsdirect.com/news/a-cap-and-amerilife-enhance-app-annuity-with-addition-of-esg-macro-5-index-from-credit-suisse-572117742
IN THIS STORY
MSCI
Did you know the following Labor Day fun facts?
The first U.S. Labor Day celebration was held on Sept. 5, 1882 in New York City.
In 1894, Congress passed legislation and President Grover Cleveland signed into law a bill making the first Monday in September the official Labor Day federal holiday.
Labor Day recognizes the contributions of the more than 164 million men and women in the U. S. workforce.
The Life and Annuity Shop Staff honors and remembers the heroes who sacrificed in the service and protection of our country.
In observance of Memorial Day, The Life and Annuity Shop offices will close at 1:00 PM Eastern on Friday, May 27th and will reopen Tuesday, May 31st.
The Life and Annuity Shop, LLC.’s office will be closed Monday, December 26th, 2022 and Monday, January 2nd, 2023. Regular business hours will resume following the new year holiday, on January 3rd, 2023.
On November 11, 2021, we pause to reflect on the history of this great Nation and honor all those who fought to defend it. Originally called “Armistice Day” and intended to celebrate the end of World War I, “the war to end all wars,” Veterans Day allows us to give thanks to veterans past and present, men and women from all walks of life and all ethnicities, who stood up and said, “Send me.” We recognize your sacrifices, your sense of duty and your love for this country.
Did you know the following Labor Day fun facts?
The first U.S. Labor Day celebration was held on Sept. 5, 1882 in New York City.
In 1894, Congress passed legislation and President Grover Cleveland signed into law a bill making the first Monday in September the official Labor Day federal holiday.
Labor Day recognizes the contributions of the more than 164 million men and women in the U. S. workforce.
Our office will be closing early at 2pm Tuesday July 6th, 2021 due to Tropical Storm Elsa. We will evaluate our ability to re-open on Wednesday July 7th, 2021 early Wednesday Morning as the safety of our staff is our highest priority.
4th of July Hours Announcement
In observance of Independence Day, The Life and Annuity Shop will be closed Monday, July 5, 2021. We will resume normal business operations Tuesday, July 6th, at 8:15am Eastern.
The Life and Annuity Shop Staff honors and remembers the heroes who sacrificed in the service and protection of our country.
In observance of Memorial Day, our offices will be closed Monday, May 31st.
We will resume normal business hours Tuesday, June 1st.
Our office will be closing early at 3pm Wednesday November 11, 2020 due to Tropical Storm ETA. We will evaluate our ability to re-open on Thursday early Thursday Morning as the safety of our staff is our highest priority.
July 21, 2020
Dear Valued Agents,
We are writing to let you know that The Life and Annuity Shop’s network environment was hit with a highly sophisticated virus injected from outside sources that has disrupted access to our computer systems. As soon as we discovered the incident, we immediately implemented our emergency response protocols and disconnected outside access to our network to contain the potential threat and protect data. We have initiated a comprehensive response plan and activated key partners to help us navigate and respond to the impacts of the virus.
Please be assured, our teams are working diligently to restore our systems as quickly as possible. We have also hired independent computer forensic firms to conduct an investigation and determine how this occurred, what we can do to prevent a similar attack in the future, and to confirm that no protected health information was impacted. As of now, there is no evidence to suggest that PHI, PII or HIPAA-related data maintained through our systems has been compromised.
We are still in the early stages of the investigation with limited information, however we are committed to open communication and will continue to provide updates as we progress through the restoration process. At The Life and Annuity Shop we pride ourselves on providing outstanding service, and are deeply sorry for the frustration and inconvenience this has caused you.
The Life and annuity shop’s computer network issues that have affected our email, phones and other systems that we reported on Friday 7/17/20 are not completely restored. We have made the decision to close early again today 7/20/20 to allow IT to continue fix the issues.
We greatly apologize for this inconvenience to you. We didn’t make this decision lightly. We now expect to be back up and running on Tuesday 7/21/20 for normal business hours.
The Life and annuity shop’s computer network is experiencing issues that have affected our email, phones and other systems. We have made the decision to close early today 7/17/20 at 10:30am EST to allow IT to fix the issues.
We greatly apologize for this inconvenience to you. We didn’t make this decision lightly. We expect to be back up and running on Monday 7/20/20 for normal business hours.
The Life and Annuity Shop Staff honors and remembers the heroes who sacrificed in the service and protection of our country.
In observance of Memorial Day, our offices will be closed Monday, May 25th.
We will resume normal business hours Tuesday, May 26th.
Impress/Reassure Clients During Pandemic
By Bryce Sanders – InsuranceNewsNet – March 27, 2020
You sell insurance. The stock market has been falling. People around the nation are uneasy and confused. That little voice says “Not my problem.” Wrong. Your clients’ problems are your problems; you care about your clients. How can you be there for your clients? How should you build good will? How might you become their trusted agent going forward? Don’t just tell clients “I have no idea what’ll happen, I just wanted to call.” If you arm yourself with some answers (talk about this with your GM) and prepare an intelligent script, you can have some “If so, then …” answers. “If this happens, our analysts think this will happen.” You aren’t going to be doing a lot of prospecting during this crisis. Beyond being in bad taste, it’s been outlawed in places like New York State during its state of emergency. You might not be writing a whole lot of business, but you are making effective use of your time, and your clients will be impressed. Show them that you can be a good person and a friend, getting in touch with people you know near and far. Your clients know you can’t accurately predict the future, but they’ll certainly appreciate you showing an interest in them … and discussing some possible solutions.
READ COMPLETE ARTICLE
Work from home transition
We continue to actively monitor the spread of COVID-19 and we successfully have 60% of our employees working from the safety of their homes. As we make the final push to get our remaining employees to work from home, we will be transitioning our remaining employees today 3/25/20 and tomorrow 3/26/20. By the close of business Thursday 3/26/20, everyone in our office will be working from home. We have business continuity plans to ensure a normal business operations but today and tomorrow we may experience a disruption in our normal operations. We appreciate your understanding patience during these unprecedented times. Our plan is to be back to normal operations Friday 3/27/20.
Annuity Telephonic Sales Utilizing Electronic Application (eApp)
These volatile times are a great reminder of the benefits provided with fixed annuities. If clients want a fixed/indexed annuity but do not want to meet in person, then we have a great solution! Take advantage of the carriers E-app solutions. These solutions are accessed via the carrier websites. If you use an E-app Solution, you can take the app over the phone with the client. All signatures and acknowledgments are done electronically. You do not need to physically meet with the client! We are happy to answer any questions. However, we are preparing a summary of our carrier partners E-app solutions and policies. We are creating a dedicated page to this topic and will share shortly.
We will continue to assess the situation and share more information as it becomes available. Please visit www.annuity1.com for the latest updates.
We will continue to be here to support you in these trying times.
Stay safe and Healthy!
Neal Lapierre
President
The Life and Annuity Shop, LLC.
At The Life and Annuity Shop, LLC., the safety, health and well-being of our community, agent partners, and associates is our top priority. Like you, we are closely monitoring the quickly developing effects of the Coronavirus (COVID-19) pandemic, and adapting the way we do business accordingly.
As COVID-19 continues to evolve and spread throughout the country, we are taking the necessary precautions to protect our employees, which has included mobilizing members of our office-based team to work-from-home. Please know that our core focus is, and always has been, to provide the highest level of service to our valued agent partners.
Although any disruption to business should be minimal with this transition, we wanted you aware of this change in our business operations, should our response times be a little longer than usual.
We are all in this together. We will continue to monitor the COVID-19 situation and will follow guidance from public health officials and government agencies to continue to support our agent partners and communities.
For more information about COVD-19 and what you can do to keep healthy and safe, visit the Centers for Disease Control website at www.cdc.gov or your local health department’s website.
Sincerely,
Neal Lapierre
President
Treasury Secretary Steve Mnuchin announced Tuesday that individuals would be allowed to defer up to $1 million in tax payments for up to 90 days. He also said the administration was considering sending checks to Americans.
“We encourage those Americans who can file their taxes to continue to file their taxes on April 15, because for many Americans, you will get tax refunds,” he said Tuesday in a news conference.
If you owe a payment to the IRS, you can defer up to $1 million as an individual, Mnuchin said. “The reason we’re doing $1 million is that covers lots of pass-throughs and small businesses and $10 million to corporations — interest free and penalty free for 90 days,” he said.
“All you have to do is file your taxes; you’ll automatically not get charged interest and penalties.”
Click HERE to read the full story via ThinkAdvisor
The past few weeks of dramatic news might sound eerily similar to the 2008 crash, but there are some key differences for annuities, as well as some positive similarities.
Click HERE to read the full story via INN
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Sheryl Moore, CEO of Wink, also said although this crisis has many similarities to the recession, the underlying financials are fundamentally different. Back then, FIA sales were so strong that some carriers had to stop selling for a while.
“That was a little different because capital was tight at the time,” Moore said. “There were huge capital constraints that really prevented companies from issuing much annuity business. And that’s not really an issue at this time, at least not yet.”
But one of the unusual features of this crash is a plummet not only in equities markets, but also in bond prices. That is odd because of the increased demand. So, that is creating a unique pressure on carriers that need safe investments to support reserves.
Moore said she is seeing many similarities to the last crash, such as the rate cuts.
“It’s very similar to 2008 from a product standpoint,” Moore said. “I’ve had companies dropping rates twice in the same day, over the past two weeks.”
Dear Valued Producer,
I wanted to make sure all of you are aware of the dramatic recent changes in the financial markets, especially the bond market. The yield on the 10 year treasury has been declining for the last month but the decreases in yields have really accelerated over the past 5 days.
• On February 6, 2020 the yield on the 10 year treasury was 1.66%
• Today March 6, 2020 at 9:26am the yield on the 10 year treasury was 0.70%
• So over the last 30 days the yield on the 10 year treasury have dropped 96 bps!
• As a result investment yields on the insurance carrier’s portfolios are dropping and therefore they have lowered their new money rates and more importantly more Interest rate decreases are coming.
So I would strongly recommend that you meet with your clients and potential clients to advise them what is happening. Also encourage them to lock in the current rates now as it looks like interest rates will continue to go lower. Waiting will only end up costing them more money.
Please call us at (888) 661-1999 to discuss current annuity offerings available and upcoming interest rate decreases so you are aware of the time frames involved.
Below is a chart showing the decline in yield on the 10 year treasury over the last 30 days.
Neal Lapierre
President
The Life And Annuity Shop, LLC
AM Best Assigns Credit Ratings to Oceanview Life and Annuity Company and Oceanview Reinsurance Ltd.
Originally Posted On Businesswire.com
OLDWICK, N.J.–(BUSINESS WIRE)–AM Best has assigned a Financial Strength Rating of A- (Excellent) and a Long-Term Issuer Credit Rating (Long-Term ICR) of “a-” to Oceanview Life and Annuity Company (Oceanview Life) (Denver, CO) and its reinsurer affiliate, Oceanview Reinsurance Ltd. (Oceanview Re) (Bermuda). The outlook assigned to these Credit Ratings (ratings) is stable. Both companies are ultimately owned by Oceanview Holdings Ltd.
The ratings of Oceanview Life reflect its balance sheet strength, which AM Best categorizes as strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).
The ratings of Oceanview Re reflect its balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate ERM.
The ratings of Oceanview Life and Oceanview Re are anchored in the strength and quality of their balance sheets and overall liquidity sources. As a new company formation, AM Best requires a level of conservatism to be built into initial capital levels, and comfort is taken in the two companies’ material level of initial capital, which is approximately $100 million for each entity on day one. Further supporting the balance sheet assessments is the material committed equity capital to the ownership structure totaling $1 billion. Finally, AM Best’s final balance sheet assessment is further supported by additional capital and liquidity alternatives available to the company. AM Best also has assessed the quality of management to be experienced in the intended areas of focus. With respect to Oceanview Re, 100% of its capital qualifies as Tier 1 under Bermuda Solvency II equivalent regulatory system.
Additionally, AM Best stress tests of the companies also demonstrate a sufficient capital buffer to cover higher than projected asset impairments and excessive growth. The company also will apply to have access to Federal Home Loan Banks, further enhancing its liquidity profile.
Partially offsetting these positives is the concentrated asset allocation strategy and competitive product space in which Oceanview Life will be competing. AM Best therefore re-emphasizes the importance of a capital buffer, and additional equity commitments, from the start. Although concentrated, AM Best expects asset quality to be rated 100% investment grade. Products will include a portfolio of fixed annuity solutions, distributed through a diverse but untested network, which will place the companies in a highly competitive space from which to execute on its strategy.
This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media – Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.
AM Best is a global credit rating agency, news publisher and data provider specializing in the insurance industry. The company does business in more than 100 countries. Headquartered in Oldwick, NJ, AM Best has offices in cities around the world, including London, Amsterdam, Dubai, Hong Kong,Singapore and Mexico City. For more information, visit www.ambest.com.
Copyright © 2019 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
OLDWICK, N.J.–(BUSINESS WIRE)–AM Best has upgraded the Financial Strength Rating to B+ (Good) from B (Fair) and the Long-Term Issuer Credit Rating to “bbb-” from “bb+” of Equitable Life & Casualty Insurance Company (Equitable) (Salt Lake City, UT). The outlook of these Credit Ratings (ratings) has been revised to stable from positive.
The ratings reflect Equitable’s balance sheet strength, which AM Best categorizes as adequate, as well as its adequate operating performance, limited business profile and marginal enterprise risk management (ERM).
The ratings upgrade was based on Equitable’s improved operating performance. Over the last two years, the company delivered improving operating performance through profitable risk revenue development, which was driven by better underwriting scrutiny and increased investment returns. The impact of these adjustments resulted in a strong positive shift in Equitable’s operating gains through the second quarter of 2019.
The company’s balance sheet was strengthened by a significant capital infusion, providing the basis for the execution of its planned business expansion strategy. The improvement in balance sheet strength reflected the application of additional financial commitments to increasing the scale of the organization’s overall operations with particular focus on its annuity business…
The Life and Annuity Shop, LLC. Wishes everyone a safe and happy Independence Day!
In observance of this holiday, our offices will be closed on July 4th and 5th.
The Life and Annuity Shop Staff honors and remembers the heroes who sacrificed in the service and protection of our country.
In observance of Memorial Day, our offices will be closed Monday, May 25th.
We will resume normal business hours Tuesday, May 26th.
OLDWICK, N.J.–(BUSINESS WIRE)–AM Best has upgraded the Financial Strength Rating (FSR) to B+ (Good) from B (Fair) and the Long-Term Issuer Credit Ratings (Long-Term ICR) to “bbb-” from “bb+” of Nassau Life Insurance Company and PHL Variable Insurance Company, collectively known as Nassau Insurance Group. Concurrently, AM Best has upgraded the FSR to B+ (Good) from B (Fair) and the Long-Term ICRs to “bbb-” from “bb+” of Nassau Life and Annuity Company, Nassau Life Insurance Company of Kansas (Overland Park, KS) and Constitution Life Insurance Company (Houston, TX). In addition, AM Best has upgraded the Long-Term ICR to “b+” from “b” of The Nassau Companies of New York, Inc. (Nassau of NY) and upgraded its existing Long-Term Issue Credit Ratings (Long-Term IRs). The outlook of these Credit Ratings (ratings) remains stable. All companies are headquartered in Hartford, CT, unless otherwise specified. (See below for a detailed listing of the Long-Term IRs.)
The ratings of Nassau Insurance Group reflect its balance sheet strength, which AM Best categorizes as adequate, as well as its marginal operating performance, neutral business profile and appropriate enterprise risk management (ERM). The rating upgrades reflect the group’s improved ERM capabilities including improved internal controls as demonstrated by the recent remediation of all remaining material weaknesses inherited at the time of the acquisition of Nassau of NY. Nassau Insurance Group also maintains a formal risk appetite statement with defined risk tolerances and limits. Stress testing and sensitivity analysis under multiple scenarios also are performed.
The group continues to maintain a strong level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), as well as improved liquidity, with the addition of access to a Federal Home Loan Bank credit facility, access to approximately $140 million in cash and short-term investments at Nassau of New York and increased dividend capacity at Nassau Life Insurance Company, as well as access to committed capital from the group’s ultimate parent.
While liquidity has improved at PHL Variable Insurance Company, it has experienced significant losses in recent periods primarily due to increasing mortality in its universal life insurance line of business, and additional capital contributions likely will be needed over the near term. In addition, operating results for the overall Nassau Insurance Group have fluctuated over the past several years in part due to costs associated with the resolution of all material legacy litigation, as well as increased mortality in its universal life insurance block and several one-time events. Furthermore, premiums had been declining for a number of years due to a focus on improving capitalization and liquidity while developing a suite of new products for the marketplace. AM Best notes that premiums have increased over the most-recent period primarily due to an increase in annuity sales. AM Best expects a general improvement in the company’s operating performance over the medium term, as management continues to focus on streamlining operations and investing in growth as it re-enters the marketplace with new products.
The following Long-Term IRs have been upgraded with stable outlooks:
The Nassau Companies of New York, Inc.—
–to “b+” from “b” on $300 million 7.45% senior unsecured notes, due 2032 (approximately $253 million outstanding)
Nassau Life Insurance Company—
–to “bb-” from “b+” on $175 million 7.15% surplus notes, due 2034 (approximately $126 million outstanding)
This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media – Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.
AM Best is a global rating agency and information provider with a unique focus on the insurance industry. Visit www.ambest.com for more information.
Copyright © 2019 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
Oldwick – AM Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating (FSR) of B+ (Good) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “bbb-” of Investors Heritage Life Insurance Company (IHLIC) (Frankfort, KY), which is subsidiary of Aquarian Investors Heritage Holdings LLC (Aquarian).
The ratings reflect IHLIC’s balance sheet strength, which AM Best categorizes as strong, as well as its marginal operating performance, limited business profile and appropriate enterprise risk management (ERM).
The positive outlooks reflect an improved balance sheet assessment, which AM Best characterizes as strong due to improved risk-adjusted capitalization levels, as measured by Best’s Capital Adequacy Ratio (BCAR), reduced reinsurance leverage, and a reduction in investment risk due to decreased exposure to NAIC Class 2 bonds and reduced equity allocations. The company’s risk-adjusted capitalization levels improved due to the gain on the sale of affiliated stock of Investors Heritage Capital Corporation (IHCC) in conjunction with its acquisition by Aquarian in 2018, as well as an additional capital contribution made by Aquarian in the same year. IHCC also reduced its reinsurance leverage significantly by recapturing business from an unrated reinsurer.
Operating performance has been marginal historically due to lack of premium growth and low return metrics, but IHLIC has reported significant growth in its premiums last year due to the launch of a new multi-year guaranteed fixed deferred annuity product and has reversed a trend of declining premiums from 2013-2017.
However, operating performance remains constrained given sales acquisition costs and narrow spreads on its recently introduced fixed annuity product given high crediting rates.
While the company’s business profile is assessed as limited given its historical focus as a preneed and final expense writer with high geographic concentration, it is evolving as it migrates toward annuity products and expands geographically. IHLIC’s ERM is considered to be appropriate and has improved under its new ownership structure.
This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media – Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.
AM Best is a global rating agency and information provider with a unique focus on the insurance industry.
Investors Heritage Life Insurance Company – HERITAGE BUILDER ANNUITY
On January 26th the Heritage Builder 3, 5 and 7-year annuity rates will be reduced as follows:
3 Year 2.90%
5 Year 3.50%
7 Year 3.60%
The current rate will be honored on all applications dated on or before January 25th and received, in good order, in the home office by February 8th.
Current Interest Rates: IHLIC Heritage Builder Rates 12-1-18
Click here for the original Field Announcement
Originally received via email on Thu 9/27/2018 10:46 PM
Dear Valued Agents,
As you know, just over 18 months ago Bankers Life Insurance Company became part of Global Bankers Insurance Group (Global Bankers), an international family of insurance and reinsurance companies focused on life insurance and annuities. We discussed this relationship and its potential to grow our organization as well as to create strategic and operational efficiencies to bring BLIC to the next level in terms of superior technology, improved product offerings and premier customer service.
Bankers Life Insurance is one of many insurance entities under Global Bankers, which manages a diverse portfolio of insurance companies in the U.S. and abroad. In order to take advantage of higher ratings, a diverse product portfolio and more efficient processes, we will be consolidating all future annuity sales into Global Bankers’ flagship company, Colorado Bankers Life Insurance Company (CBLife). CBLife has invested a tremendous amount of time and resources in perfecting a state-of-the-art digital platform featuring enhancements such as policy eDelivery and eApplications. We feel trying to replicate this effort across multiple companies is not prudent.
Therefore, at this time we will suspend all new sales of BLIC products effective October 1, 2018. As in the past with similar situations, we will honor all annuity applications in the pipeline. However, BLIC will accept no new business annuity applications after October 1st.
Please note: There will be no interruption in service to your clients and/or contract owners. The customer service quality they are accustomed to receiving will continue uninterrupted.
For more than 40 years Bankers Life Insurance Company has provided quality deferred and immediate annuity products, services and support to our policyholders across America. You have been an integral part of our history. On behalf of every member of the BLIC team, I wish to thank you for your loyalty and all that you have done to make what Bankers Life Insurance Company is today.
Sincerely,
John Muscolino
NEW YORK–(BUSINESS WIRE)–A-CAP and Saybrus Partners today announced the launch of Retirement Plus Multiplier Annuity, a single premium fixed indexed annuity. The annuity is the latest addition to a wide breadth of products issued by two of A-CAP’s insurance subsidiaries, Sentinel Security Life Insurance Company and Atlantic Coast Life Insurance Company. The product is available through Saybrus Partners and a select group of independent distributors. Annuity holders will have exclusive access to the Goldman Sachs Motif Aging of America Dynamic Balance Index (“Thematic Index”).
The Retirement Plus Multiplier Annuity features four crediting strategies, a fixed interest account, principal protection from loss, and a choice of accumulation or income enhancing benefits to create a customized solution for retirees’ individual goals. The uniqueness of the Retirement Plus Multiplier Annuity, which is the first of its kind, is its exclusive access to the Thematic Index. The Thematic Index provides exposure to equities and fixed income, with targeted exposure to companies in the healthcare and real estate sectors that may benefit from the growth in the older population in the United States.
The Thematic Index coupled with the A-CAP insurance platform and the Retirement Plus Multiplier Annuity will allow seniors to grow their retirement returns based on a unique formula tailored to the needs of the aging senior market.
“Client financial needs in retirement are a delicate balance of opportunity and risk,” said Doug George, Head of Life and Annuity for A-CAP. “Our team has been working hard to bring to market a compelling planning vehicle that offers clients a way to reap the rewards of long-term growth trends while achieving a level of security and reliability for their hard-earned savings. Retirement Plus Multiplier Annuity delivers on those objectives in a package that can be customized based on the client’s personal goals and priorities. This launch marks a pivotal moment for the retirement industry.”
Additionally, annuity holders will have the unique flexibility to tailor their contract by choosing from a Growth Benefit or Income Multiplier Benefit. The Growth Benefit provides enhanced crediting rates on the annuity’s indexed accounts, improving the contract’s ability to participate in positive market performance. The Income Multiplier Benefit provides a Guaranteed Lifetime Withdrawal Benefit (GLWB) that offers an income enhancing bonus of up to 60+ percent of the contract’s accumulation value depending on when the client will need income.
“Baby Boomers are reshaping the face of retirement in many ways,” said Andrew Sheen, Managing Director, Product Development for Saybrus Partners. “The impressive size and lifestyle focus of this group is driving expansion and demand for new offerings in sectors like healthcare and real estate. With the unique index crediting strategies offered within Retirement Plus Multiplier Annuity, contract holders can participate in the potential growth of the companies that serve their own demographic.”
To learn more about Retirement Plus Multiplier Annuity and the Goldman Sachs Motif Aging of America Dynamic Balance Index crediting strategy, agents and financial advisors can visit www.sslco.com/content/rpm and www.aclico.com/Annuities.html, or contact Saybrus Partners at 888-794-4447.
ABOUT A-CAP
A-CAP is a holding company owning multiple insurance and financial businesses on its unique and synergistic platform. These businesses include primary insurance carriers, an SEC registered investment adviser, an administrative services provider, reinsurance vehicles, and marketing organizations. With broad knowledge across the insurance and investment sectors, A-CAP’s management team has diverse experience and provides comprehensive services to policyholders, insurance company clients and capital partners. Launched in 2013, A-CAP is a privately held company with offices located in New York, Charleston, Chicago, Salt Lake City and Omaha. For more information, visit www.acap.com.
Guarantees are based on the claims-paying ability of Sentinel Security Life and Atlantic Coast Life.
ABOUT SAYBRUS PARTNERS
Saybrus Partners represents the life and annuity portfolios of select carriers in key channels including independent marketing organizations, insurance agents, broker dealers and financial institutions. Saybrus Partners offers solutions-based sales support and strategies for income planning and other retirement needs, as well as simplified issue life insurance.
It is a subsidiary of Nassau Re. For more information, visit www.saybruspartners.com and www.nsre.com.
Saybrus does not provide tax or legal advice. In California dba Saybrus Partners Insurance Agency, CA license #0G81229.
GOLDMAN SACHS
This fixed indexed annuity is not sponsored, endorsed, sold, guaranteed, underwritten, distributed or promoted by Goldman Sachs & Co. LLC or any of its affiliates with the exception of any endorsement, sales, distribution or promotion of this product that may occur through its affiliates that are licensed insurance agencies (excluding such affiliates, individually and collectively, “Goldman Sachs”). Goldman Sachs makes no representation or warranty, express or implied, regarding the suitability of annuities for your financial situation generally, or fixed indexed annuities or the investment strategy underlying this fixed indexed annuity particularly, the ability of the Goldman Sachs Motif Aging of America Dynamic Balance Index to perform as intended, the merit (if any) of obtaining exposure to the Goldman Sachs Motif Aging of America Dynamic Balance Index or the suitability of purchasing or holding interests in this fixed indexed annuity. Goldman Sachs does not have any obligation to take the needs of the holders of this fixed indexed annuity into consideration in determining, composing or calculating the Goldman Sachs Motif Aging of America Dynamic Balance Index. GOLDMAN SACHS DOES NOT GUARANTEE THE ACCURACY AND/OR COMPLETENESS OF THE GOLDMAN SACHS MOTIF AGING OF AMERICA DYNAMIC BALANCE INDEX OR OF THE METHODOLOGY UNDERLYING THE INDEX, THE CALCULATION OF THE INDEX OR ANY DATA SUPPLIED BY IT FOR USE IN CONNECTION WITH THIS FIXED INDEXED ANNUITY. GOLDMAN SACHS EXPRESSLY DISCLAIMS ALL LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT OR CONSEQUENTIAL DAMAGE EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.
The Goldman Sachs Motif Aging of America Dynamic Balance Index (the “Index”) is a Goldman Sachs owned index. “Motif” is a registered trademark of Motif Investing, Inc. (“Motif Investing”) and has been licensed for use by Motif Capital Management Inc. (“Motif Capital”) and sublicensed for certain purposes by Goldman Sachs. The Index and the FIA is not sponsored, endorsed, sold or promoted by Motif Investing, Motif Capital or their respective affiliates or make any representation regarding the advisability of investing in the Index or the FIA. Motif Capital’s only relationship to Goldman Sachs with respect to the Index is the licensing of the Motif trademark.
MOTIF CAPITAL DOES NOT GUARANTEE THE ADEQUACY, ACCURACY, TIMELINESS AND/OR THE COMPLETENESS OF THE INDEX OR ANY DATA RELATED THERETO OR ANY COMMUNICATION, INCLUDING BUT NOT LIMITED TO, ORAL OR WRITTEN COMMUNICATION (INCLUDING ELECTRONIC COMMUNICATIONS) WITH RESPECT THERETO. MOTIF CAPITAL SHALL NOT BE SUBJECT TO ANY DAMAGES OR LIABILITY FOR ANY ERRORS, OMISSIONS, OR DELAYS THEREIN. MOTIF CAPITAL MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES, OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE OR AS TO RESULTS TO BE OBTAINED BY INVESTOR‘S IN THE INDEX OR FIA, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE INDEX OR WITH RESPECT TO ANY DATA RELATED THERETO. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT WHATSOEVER SHALL MOTIF CAPITAL BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES INCLUDING BUT NOT LIMITED TO, LOSS OF PROFITS, TRADING LOSSES, LOST TIME OR GOODWILL, EVEN IF THEY HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, WHETHER IN CONTRACT, TORT, STRICT LIABILITY, OR OTHERWISE.
A-CAP
Kristen King, 914-393-5472
kristenking@a-capholdings.com
The 5th Circuit Court of Appeals issued a mandate Thursday making its March 15 decision to strike down the regulation effective
By Mark Schoeff – InvestmentNews – June 21, 2018
After a long delay, the U.S. Fifth Circuit Court of Appeals confirmed Thursday a March decision to strike down the Labor Department’s fiduciary rule.
The court issued a mandate making effective the March 15 split decision that vacated the DOL regulation. The court majority held that the agency exceeded its authority in promulgating the rule, which would have required brokers to act in the best interests of their clients in retirement accounts.
In the mandate, the court also said the Labor Department has to pay the financial industry plaintiffs the costs related to the appeal.
“It is ordered and adjudged that the judgment of the District Court is reversed, and vacate the fiduciary rule in toto,” the mandate states. “It is further ordered that appellees pay to appellants the costs on appeal to be taxed by the clerk of this court.”
The 5th Circuit overturned a decision by a Dallas federal court that had upheld the DOL rule, representing the first win by industry opponents in several lawsuits that were filed against the measure.
The mandate was supposed to have been filed May 7. It was delayed for several weeks, as AARP and three states tried to intervene in the case to defend the rule after the Department of Justice, acting on behalf of the DOL, declined to appeal the March 15 decision.
The Securities and Exchange Commission is now firmly in the lead on the effort to reform investment advice standards. The agency’s proposal, which would subject brokers to a best interest standard, is open for public comment until Aug. 7.
Americans seem more comfortable with market volatility, but recoil at the thought of a downturn that could devastate their retirement savings, a new survey has found.
Can these contradictory strands really exist at the same time?
“Yes, people can be both,” said Paul Kelash, vice president of Consumers Insights for Allianz, which published the 2018 Market Perceptions Study.
“It is 100 percent true, especially for baby boomers that are close to or entering retirement,” said Scott Bishop, executive vice president, financial planning, at STA Wealth Management in Houston.
Survey Findings
The Allianz study also found that:
• 35 percent of Americans said they are comfortable with market conditions and ready to invest – up from 26 percent in 2015.
• 37 percent admit that recent volatility is making them anxious about their nest egg, (New question in this year’s survey.)
• 57 percent are willing to give up potential gains for a product that protects a portion of their retirement savings – up from 48 percent in 2015.
• 67 percent said they would feel better about their retirement savings if they knew some of it was protected from market loss.
“Volatility matters, and while we see some increasing comfort with volatility, it is driving a simmering anxiety in many Americans,” Kelash said.
VOLATILITY INDEX RISES
The nervousness is reflected in the CBOE Volatility Index, or VIX, a measure of market volatility, which is higher this year than last.
In February, VIX spiked 115 percent in one day due a market selloff, though the index has since returned to levels closer to long-term norms.
Market watchers say it’s not unusual for anxiety to peak in anticipation of a market drop following a period of long economic expansion – yet the expansion keeps on rolling with few immediate signs of slowing down.
Financial planner Steve Branton with Mosaic Financial Partners in San Francisco even has an expression for it.
He likens the contradictions to a “barbell” syndrome.
That’s where the client, looking to capture gains before the window closes and the market falls, has too much exposure to individual stocks, but also keeps a cash hoard as a hedge against collapse.
“The person is in the middle and on either side are uneven elements,” he said.
FEAR AND GREED
Bishop uses the popular fear-and-greed analogy.
Greed makes investors not want to miss out on a “hot” market and overstay their market welcome, but fear makes them not want to lose out in a “cold” market so they sell too low or at the wrong time.
Anxiety just below the surface is very real and the preference for a balanced financial product was even more pronounced for wealthier Americans, the Allianz survey found.
• 78 percent of respondents with $200,000 or more in investable assets said it is important have some of their savings in a product that protects from market loss.
• 68 percent said they are willing to give up some potential gains for a product that protects a portion of their retirement savings.
PRODUCT CATEGORY ON A ROLL
The divide may explain the recent success of a new product category known as buffered or index-linked annuities.
These annuities are built to offer some protection from downturns in exchange for limits on the gains.
“As market volatility becomes a more constant part of our financial landscape, Americans are recognizing the value of options that provide both opportunity and a level of protection,” Kelash said.
Some index-linked annuities come with a buffered structure where the insurer takes on a percent of market loss before the client assumes the rest.
Others work in the opposite way where investors hold the risk up to a threshold before the insurance company assumes the loss beyond the threshold.
Sales of index-linked VAs rose 25 percent last year to $9.2 billion compared with 2016.
https://insurancenewsnet.com/innarticle/consumers-comfortable-yet-terrified-of-risk
SEC fiduciary rule … is not a fiduciary rule
By Kenneth Corbin – FinancialPlanning – April 20, 2018
For years, the common shorthand in describing any SEC move to set new regulations for brokers was a “uniform fiduciary standard” that would “harmonize” the rules for broker-dealers and investment advisors.
Nearly a decade after the debate began in earnest, the SEC on Wednesday issued a set of proposed rules that would neither impose a fiduciary standard on brokers nor fully align the standards for all wealth managers serving retail clients.
Instead, the SEC is backing a standard that would require brokers to put their clients’ interests ahead of their own, giving it a name that some investor advocates say is fundamentally misleading.
“I think what we see here falls well short of where we need to be to really get to a best interest standard,” says Knut Rostad, president of the Institute for the Fiduciary Standard.
The SEC voted to begin consideration on what it’s calling Regulation Best Interest, which would require brokers to make disclosures about conflicts of interest, take on a client-care obligation and set policies and procedures to keep conflicts of interest in check.
The commission is accepting comments on the proposal for 90 days.
It’s in the final component of the best interest proposal concerning conflict policies and mitigation that some consumer advocates see the greatest shortfall. Though the rule would require brokers to “disclose and mitigate” conflicts, if not eliminate them altogether, it still sounds only like a slightly more muscular version of the current suitability standard that governs brokers, according to Andrew Stoltmann, an attorney and president of the Public Investors Arbitration Bar Association.
“Right now, this standard shades far left towards the suitability standard, and is light years away from the fiduciary standard,” Stoltmann says in an interview, adding the current proposal is “somewhat disappointing.”
RIAs are still bound by their longstanding fiduciary obligation, though Stoltmann worries that that standard could get watered down in light of the interpretive guidance for advisors that the SEC is considering as part of the proposals put forward yesterday.
“I think it’s clear that an RIA can’t recommend a proprietary product,” Stoltmann says. “The question I have is whether the SEC when it’s proposing parameters will say it’s okay for a fiduciary to do certain activities ― like recommending proprietary funds ― so long as the conflicts are disclosed.”
Others are more sympathetic to the brokerage model and take issue with a characterization that equates commissions with pernicious conflicts. When most brokers evaluate whether a product or strategy is suitable for their client, they weigh much the same information as a fiduciary advisor, including the cost of the product and a client’s risk tolerance and investment objectives, among other factors, according to Brendan McGarry, a financial-services attorney with the firm Kaufman
Dolowich & Voluck.
“The considerations are largely the same,” McGarry says in an interview. “I would argue that if you really look at the analysis that goes into determining if something is suitable or in the best interest or what goes into the fiduciary responsibility, when you break it down they’re really not all that different.”
Rostad, who says that “the immutable law is conflicts of interest are inherently harmful,” probably wouldn’t buy that.
Though Rostad grants that the SEC’s proposal was a “step forward” for improving investor protections, the best interest standard leaves much to be desired, given that the ambiguity over the term “mitigate” leaves open room for continued conflicts of interest, he says.
“Unless the best interest standard is truly is very, very akin to the fiduciary standard, then it is potentially ― probably ― misleading,” Rostad says. “There’s no such thing as three-quarters of a best-interest standard. You’ve either made it or you haven’t. This is pass-fail.”
So if the new broker standard isn’t a fiduciary standard, and it’s not as stringent as the rules governing the advisor camp, the SEC could have gone the other way, and acknowledged that brokers and advisors operate on separate tracks.
“If we’re not going to make material changes, let’s call it what it is ― and it is a broker standard,” Rostad says. “Never mind harmonization. Let’s go back to demarcation, and that is to separate them.”
Thanks in large part to the Department of Labor’s fiduciary proposal, that term ― “fiduciary” ― has gained currency among investors. But even as the SEC’s proposal seeks to elevate standards of care, by conferring on brokers a best-interest label, it could chip away at what had been a point of distinction for RIAs, according to Stoltmann.
“Under Regulation Best Interest, were seeing those lines blurred and crossed,” he says. “Think about that ― the average retail stock broker can say, ‘Well, yeah, a fiduciary has to act in your best interest, but so do I. Here’s the SEC saying it.’ And unless the client is a securities attorney, they’re going to say that sounds about right to me. So it sows the seeds of confusion.”
https://www.financial-planning.com/news/sec-proposal-leaves-big-gaps-in-broker-advisors-standards
The Department of Labor fiduciary rule does not exist anymore after a late-Thursday court ruling. That court decision opens the door for the Securities and Exchange Commission and state insurance departments to take over rulemaking.
The Fifth Circuit Court of Appeals’ 2-1 decision stunned the industry and has many asking the same question this morning: What now?
Click HERE to read the full story via INN; subscription required.
Gibson Dunn: No ‘Circuit Split’ on DOL Rule; Decision Applies Nationwide
Gibson Dunn, the law firm that successfully argued to vacate the Labor Department’s fiduciary rule before the U.S. Court of Appeals for the 5th Circuit, says the 2-to-1 decision in favor of industry opponents of the rule applies “nationwide.”
Citing the Administrative Procedure Act, the law that governs federal agency rule making, and Black’s Law Dictionary, attorneys for the firm said the ruling has the effect of the removing the fiduciary rule from the books.
Click HERE to read the original story via ThinkAdvisor.
“Under the APA, ‘vacatur’ is a remedy by which courts ‘set aside agency action’ that is arbitrary and capricious or otherwise outside of the agency’s statutory authority,” wrote attorneys for Gibson Dunn, including Eugene Scalia, in a client update.
The consequence of the 5th Circuit’s decision is to delete the fiduciary rule. “Because the effect of vacatur is, in essence, to remove a regulation from the books, its effect is nationwide,” wrote Mr. Scalia and a team of Gibson Dunn attorneys.
Since the decision was released last week, some attorneys in press reports have speculated that the fiduciary rule is still in effect. Other reports have suggested the decision may only impact investment and insurance providers and distributions within states under the 5thCircuit’s jurisdiction.
But the impact of the decision is not as ambiguous as some reports claim, according to Gibson Dunn.
By May 7, when the 5th Circuit is scheduled to issue a final order under the Federal Rules of Appellate Procedure, the fiduciary rule will effectively be erased from the Federal Register, “without geographical limitation,” the attorneys say.
Gibson Dunn’s client update also sets out to clarify the existence of a so-called circuit split over the fiduciary rule.
Days before the 5th Circuit released its ruling, the 10th Circuit Court of Appeals issued a more narrow ruling upholding the fiduciary rule’s treatment of fixed indexed annuities.
But the 10th Circuit decision did not address the larger question of the Labor Department’s authority to write the fiduciary rule as it did.
“Because the 5th Circuit vacated the rule on grounds the 10th Circuit did not address, no ‘circuit conflict’ is presented by the two decisions,” say the Gibson Dunn team.
The question of whether a circuit conflict, or split, exists has ramifications on a potential Supreme Court review of the fiduciary rule case.
“We commented on the scope of the 10th Circuit decision to correct apparent misperceptions about it,” said Jason Mendro, a partner at Gibson Dunn, in an email. “We had seen commentary incorrectly suggesting that it conflicts with the 5th Circuit’s decision, so we wanted to clarify that it does not.”
The odds of a Supreme Court review of any case are “always very low,” said Mr. Mendro, who was part of the litigation team that appealed to the 5th Circuit. According to the Supreme Court’s website, up to 8,000 petitions for review are requested each term. The High Court typically grants full review in about 1 percent of cases.
“The absence of a circuit split further reduces the likelihood of such review,” added Mr. Mendro.
Last November, oral arguments before the D.C. Circuit Court of Appeals were delayed in a case brought by the National Association for Fixed Annuities.
NAFA was granted a delay of its hearing until after the 5th Circuit issued its decision. The original hearing in the D.C. Circuit had been scheduled for December 8, 2017.
Now that the 5th Circuit has vacated the fiduciary rule in its entirety, NAFA can be expected to drop its appeal, removing the potential for a split with the D.C. Circuit.
“When the (5th Circuit) court issues the mandate, vacatur will become effective, and the appellants (NAFA) in the D.C. Circuit case will have obtained the full measure of relief they sought in their appeal,” explained Mr. Mendro. “They should, therefore, dismiss their appeal.”
The U.S. Court of Appeals for the 5th Circuit voted 2-1 Thursday to vacate the Labor Department’s fiduciary rule.
The nine plaintiffs in the 5th Circuit case included the U.S. Chamber of Commerce, the Securities Industry and Financial Markets Association and the Financial Services Institute.
The ruling comes one day after Labor won a case in federal court brought against its fiduciary rule by Market Synergy Group, an insurance distributor.
The appeals court struck down the entirety of the fiduciary rule.
Click HERE to read the original story via ThinkAdvisor.
Labor’s next move is to decide whether to ask the full appeals court to rehear the dispute, or take the case to the U.S. Supreme Court.
The U.S. Court of Appeals for the D.C. Circuit still has an active case. That court will not be bound by how the 5th Circuit ruled.
In a joint statement, FSI, SIFMA and Chamber said that “the court has ruled on the side of America’s retirement savers, preserving access to affordable financial advice. Our organizations have long supported the development of a best interest standard of care and the Securities and Exchange Commission should now take the lead on a clear, consistent, and workable standard that does not limit choice for investors.”
According to the 5th Circuit ruling, Labor’s “new definition dispenses with the ‘regular basis’ and ‘primary basis’ criteria used in the regulation for the past 40 years. Consequently, it encompasses virtually all financial and insurance professionals who do business with ERISA plans and IRA holders. Stockbrokers and insurance salespeople, for instance, are exposed to regulations including the prohibited transaction rules. The newcomers are thus barred, without an exemption, from being paid whatever transaction-based commissions and brokerage fees have been standard in their industry segments because those types of compensation are now deemed a conflict of interest.”
Judge Says Rule Has ‘Woke’ Financial Services
Judge Edith Jones, who wrote the decision for the majority, stated that “DOL has made no secret of its intent to transform the trillion-dollar market for IRA investments, annuities and insurance products, and to regulate in a new way the thousands of people and organizations working in that market.”
Large portions of the financial services and insurance industries, Jones wrote, “have been ‘woke’ by the Fiduciary Rule and BIC Exemption. DOL utilized two transformative devices: it reinterpreted the 40-year-old term ‘investment advice fiduciary’ and exploited an exemption provision into a comprehensive regulatory framework.”
The court wrote in the ruling that President Donald Trump has directed Labor “to re-examine the Fiduciary Rule and prepare an updated economic and legal analysis” of its provisions, noting that the effective date of some provisions has been extended to July 1, 2019.
“The case, however, is not moot,” the ruling states. The fiduciary rule, the court said, “has already spawned significant market consequences, including the withdrawal of several major companies, including MetLife, AIG and Merrill Lynch from some segments of the brokerage and retirement investor market. Companies like Edward Jones and State Farm have limited the investment products that can be sold to retirement investors.”
The ruling continued: “Confusion abounds — how, for instance, does a company wishing to comply with the BICE exemption document and prove that its salesman fostered the ‘best interests’ of the individual retirement investor client? The technological costs and difficulty of compliance compound the inherent complexity of the new regulations.”
Labor’s rule also “contradicts the text of the ‘investment advice fiduciary’ provision and contemporary understandings of its language,” the ruling states.
Dissenting Judge Says DOL Acting ‘Within Its Authority’
The judge voting in favor of Labor’s fiduciary rule, Chief Judge Carl Stewart, wrote in his dissent, that: “I conclude that the DOL acted well within the confines set by Congress in implementing the challenged regulatory package, and said package should be maintained so long as the agency’s interpretation is reasonable.”
“DOL has acted within its delegated authority to regulate financial service providers in the retirement investment industry — which it has done since ERISA was enacted — and has utilized its broad exemption authority to create conditional exemptions on new investment-advice fiduciaries,” Stewart wrote. “That the DOL has extended its regulatory reach to cover more investment-advice fiduciaries and to impose additional conditions on conflicted transactions neither requires nor lends to the panel majority’s conclusion that it has acted contrary to Congress’ directive.”
Micah Hauptman, financial services counsel for the Consumer Federation of America, told ThinkAdvisor that the “case was wrongly decided. The industry opponents went forum shopping and finally found a court that was willing to buy in to their bogus arguments. This is a sad day for retirement savers.”
The opinion, Hauptman added, “is extreme by any measure. It strikes at the essence of the DOL’s authority to protect retirement savers under ERISA. It’s not only an attack on the rule, it’s an attack on the agency.”
— Mike Scarcella contributed reporting.
FOR IMMEDIATE RELEASE
OLDWICK – NOVEMBER 01, 2017
A.M. Best has upgraded the Financial Strength Rating (FSR) to B++ (Good) from B+ (Good) and has upgraded the Long-Term Issuer Credit Rating (Long-Term ICR) to “bbb+” from “bbb-” for Guaranty Income Life Insurance Company (Guaranty) (Baton Rouge, LA). The outlook of these Credit Ratings (ratings) is stable.
The rating upgrades reflect the strong operating improvements over the last several years, including premium growth in its key Annuicare product, improved risk-adjusted capitalization, significant distribution expansion and stable operating profile with favorable operating returns. The rating upgrades also acknowledge Guaranty’s new parent, Kuvare Holdings LP, and the explicit financial support it provides to Guaranty, along with Kuvare Holdings LP’s expertise and the potential for additional financial flexibility as Guaranty expands its business profile.
Offsetting rating factors include execution risk as Guaranty enters new annuity markets and the impact of new business strain on operating results. Additionally, Guaranty’s reserve book is heavily weighted in interest sensitive reserves with a concentrated product profile. In A.M. Best’s view, risk-adjusted capitalization is qualitatively diminished due to a high percentage of surplus notes and deferred tax assets. Finally, the investment portfolio, despite some improvement in diversification, has a high concentration of non-agency residential mortgage-backed securities that A.M Best deems as higher risk relative to traditional prime agency-backed securities.
Positive rating action could occur if Guaranty were to see a trend of profitable premium growth leading to an organic increase in risk-adjusted capital. Negative rating action could occur if the quality of Guaranty’s capital were to deteriorate or if operating performance underperforms and leads to excessive underwriting losses on core product lines. A negative rating action also could occur if there was a material decline in risk-adjusted capital.
This press release relates to Credit Ratings that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media – Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.
A.M. Best is the world’s oldest and most authoritative insurance rating and information source
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