ATTORNEY NEWSLETTER
Prudential, Jackson National, and the future of the annuity
As the Department of Labor requires more insurance brokers to act as fiduciaries, and as FINRA continues its investigation into variable annuities, it’s clear that the increased scrutiny is having a bit of a shriveling effect on the market for annuities. The pushback against brokers being legally required to act in the best interest of their clients is certainly a troubling sign for investors, and the FINRA investigation into an already dubious product is forcing major annuity providers to rethink their role in the market. For some, like Prudential, this means backing all the way out. The company has announced that it will no longer offer any annuity products on the open market, but instead will limit their sales to existing clients. For others, like John Hancock, the shift has forced them to retool their products, rethink their sales strategy, and hopefully to begin selling products that can offer better value and less risk.
Before the last few decades, annuities were very simple products: give a lump sum up front, get a trickle of income, plus investment returns, for your retirement. However, more modern varieties, such as variable, indexed, and other exotic annuities, have changed the landscape and given annuities a bad name. Our San Francisco annuity fraud attorneys have observed that these products are often sold as to seniors with the promise of guaranteed market rate returns, something that any financial advisor knows is impossible. In fact, these policies are designed to help annuity companies make more money, by allowing them to invest in less stable markets, take their cut off the top, and pass the risk onto the policyholder.
It’s issues like these that are leading to the increased regulatory attention on annuities, and the subsequent reduction of the market. It stands to reason that if the policy offers more risk than reward to the consumer than it shouldn’t be a profitable product, but the secrecy and misleading sales of these products has long obscured their underlying faults. Annuities are also considered to have some of the most complicated policies, making it difficult for brokers, let alone their clients, to fully understand what is happening with their money.
Some of the major annuity and life insurance providers are:
- Aviva/Athene/Accordia Life Insurance Company
- Transamerica Life Insurance Company
- John Hancock Life Insurance Company
- Bankers Life Insurance and Casualty company
- Massachusetts Mutual Life Insurance Company
- Midland Life Insurance Company
- North American Company for Life and Health Insurance
- Pacific Life Insurance Company
- Prudential Life Insurance Company
- Genworth Life Insurance Company
- ING USA Annuity and Life Insurance Company
- Lincoln Benefit Life Company
- Metlife/Metropolitan Life Insurance Company
- Unum Life Insurance Company of America
- Voya/Reliastar Life Insurance Company
If you or a loved one is having trouble with an annuity or life insurance policy, contact the Evans Law Firm at (415) 441-8669, or by email at info@evanslaw.com. Our San Francisco Annuity Fraud attorneys have experience with helping seniors and retirees navigate the complex issues that arise from annuity investments, as well as conducting cases against multinational insurance companies and negotiating equitable settlements.
