5 Ways Washington Is Choking Your Annuity Business

If you sell or market annuities, you may face a frustrating problem.

This should be the best market for retirement savings products ever. Employment is pretty good. More than 15,000 U.S. adults are turning 50 every weekday. At least about 3,000 of those adults probably earn enough that they should be flooding into the offices of insurance agents asking for retirement planning services.

Meanwhile, most of the news coming out about annuities this week is either bad or (frankly) pretty boring. 

(Related: How DOL Is Changing Sign-On Bonuses and Other Indie BD Procedures)

One reason is that it’s summer. Many advisors and annuity industry luminaries are either networking at conferences or relaxing on beaches.

A second reason is that it’s right before the end of the quarter. Many publicly traded insurers release big, juicy news with their earnings reports, or soon after they release earnings.

A third reason is the U.S. Department of Labor’s fiduciary rule. DOL officials turned part of the annuity world upside down June 9, when much of the rule took effect, and are warning that some of the rest of the annuity world could turn upside down Jan. 1, if they cannot figure out how to keep other provisions and interpretations from taking effect.

Some advisors and insurers like the goals behind the fiduciary rule effort, and some quietly support the rule itself, and how the rule is being implemented. Even the most fervent supporters have to concede, however, that insurers, advisors and others who should be trying to prepare the rapidly aging boomers, and the gray-hair-plucking baby busters, for retirement, are, instead, scouring the DOL website for new regulation drafts, and for bits of subregulatory guidance that might help explain what’s coming next.

Here are five other ideas about forces (or vacuums) in Washington that are choking your annuity business.

Senate Majority Leader Mitch McConnell (Photo: McConnell)

1. Senate leaders took the American Health Care Act into a cave somewhere and started working on it.

Reporters can still attract some readers by reading H.R. 1628, the Affordable Care Act change bill that the House passed in May, and listing some of the things that the bill might do.

Senate Republican leaders have slowly smothered interest in detailed reading of the House bill, however, by sneaking off with the draft and working on their own version. The version that Senate Majority Leader Mitch McConnell and colleagues are, apparently, drafting might be similar to the House bill, or very different.

Sen. Bob Corker, R-Tenn., on Tuesday told MSNBC’s “Morning Joe” that he looks forward to seeing the Senate version draft Thursday.

For now, however, writing detailed articles about what the Senate Affordable Care Act change, repeal or replacement bill might be is like writing about what space aliens might do if and when they come to Earth, given that no one has much more idea what the Senate version might look like than about what space aliens might look like.

(Related: Sanders Signals Backing of Senate Slowdown Over Health Care Bill)

(Photo: Thinkstock)

3. Tax reform is not setting any speed records.

The Trump administration posted a summary of what it would like to do in connection with taxes in late April. In theory, provisions in the summary could help annuity sales, by increasing people’s disposable income, or hurt annuity sales, by weakening the power of federal income tax provisions that support retirements.

Since the tax proposal summary appeared, however, the level of further action in that area has been limited.

(Related: Trump Tax Proposal to Include Estate Tax Repeal)