The National Association for Fixed Annuities is on the front lines of industry battles over regulation, compliance, suitability, image and information. Executive Director Kim O’Brien responds to inaccurate and biased articles in the media and speaks at conferences, all in an effort to get the appropriate message in front of people, an issue that every panel member agreed was vital.
O’Brien says a phenomenon she’s seen recently is a wave of news stories about the benefits of income – singlepremium immediate – annuities. She responded to one of the stories by writing and informing the reporter that, “Fixed deferred annuities are SPIAs that haven’t been SPIA’d yet.” And they haven’t been SPIA’d, to use O’Brien’s unique phrasing, because the annuity owners have chosen not to take the income stream yet. A difference not readily apparent to the untrained eye or well sleuthed by mainstream reporters.
She points to a 2005 Gallup survey of nonqualified annuity holders as an example of the message being lost. In that survey, 94 percent of annuity owners were happy with their product. “So that belies everything you read in the mainstream media about happiness or suitability of sales,” O’Brien says. “Most of these sales are suitable with happy clientele. We need to work harder at getting our message out.”
NAFA has taken an extra step and hired a public relations firm, which happens to be helmed by an ex-commissioner of insurance. NAFA is taking the initiative on its own on this front, but O’Brien says it is necessary because it is time for the industry to go on the offensive after being on the defensive since Notice to Members 05- 50 shook the industry to its core.
Another initiative NAFA is anxious to pursue in 2008 involves technology. O’Brien says it is important to move the seller or the seller’s office to technology. “Getting the technological platform for suitability disclosure is a very strong initiative. The banks have been doing it for years and years, but the independent distribution channel has yet to move toward toward that technological platform.”