Variable annuities should be considered a vehicle for retirement savings as part of public policy, a comment letter from a trade group suggests.
The Federal Insurance Office should tell consumers they are at the risk of outliving their assets and provide them some education on the financial strategies that can provide guaranteed lifetime income, the Insured Retirement Institute (IRI) stated today in a letter in response to the request for comment on its upcoming report to Congress on “How to Modernize and Improve the System of Insurance Regulation in the United States.”
The IRI’s CEO Cathy Weatherford, former head of the NAIC, told FIO Director Micahel McRaith that there is a concerning lack of savings among consumers in their financial preparedness for retirement, a concern that many have in the life insurance and annuities industry have stressed over the past years.
As part of this effort, although not necessarily within the FIO’s purview, other agencies should step up with actions as well, the IRI stated. The FIO is part of the Treasury Department, and was created in the Dodd Frank Wall Street reform legislation of 2010. See more here.
Specifically, the IRI told the FIO that Congress should pass the Lifetime Income Disclosure Act to assure workers receive adequate information about their retirement lifetime income needs and the Securities & Exchange Commission (SEC) “should adopt a variable annuity summary prospectus and other summary disclosures providing more user friendly consumer information and encouraging greater use of guaranteed lifetime income products.”
The IRI also pushed for the FIO’s recommendation to Congress of adoption of legislation on reciprocity and uniformity in the agent licensing process and uniform and transparent producer examination standards.
The IRI also told the FIO that any resolution authority should maintain the current prioritization of policyholder claims and the current status of separate account assets that apply to annuity products.
All responses are due Dec. 19th before midnight and letters are starting to come in to the Federal Register docket now at a faster rate.
You can review them here.
The full text of the IRI letter can be accessed here.