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Annuity issuers could get a big new opportunity this year: Federal regulators could bless use of indexed annuities and variable annuities as "qualified longevity annuity contracts" and "qualified default investment alternatives" for retirement plans.
Insurance regulation specialists at a Deloitte strategy center talk about the possibility in an insurance sector outlook report.
What it means: Advisors could soon be able to offer new tools to clients who want to generate guaranteed lifetime income in retirement, and clients may come into advisors' offices with more lifetime income arrangements in effect in an employer-sponsored retirement plan or in their own personal portfolios.
QDIAs: The Deloitte team noted that the U.S. Department of Labor's Employee Benefits Security Administration posted an advisory opinion on use of annuities as retirement plan QDIAs in September 2025.
An EBSA official told AllianceBernstein, which is part of Equitable, that a retirement plan fiduciary could use a variable annuity contract as a QDIA if the contract provides a guaranteed lifetime income stream.
"The DOL emphasized its approach to be 'sufficiently flexible to accommodate future innovation and developments in retirement products,'" the Deloitte team said. "The DOL will continue to take the stance that features common to variable annuity contracts will be accepted as a qualified default investment alternative as long as other conditions of the regulation are satisfied."
EBSA officials are already coordinating with officials at the U.S. Treasury Department and the U.S. Securities and Exchange Commission on other matters, and they likely will coordinate on helping plans use annuities as QDIAs, according to the Deloitte team.
QLACS: The Deloitte team also sees wheels moving in connection with QLACs, which are relatively low-cost arrangements that can help retirement savers insure against longevity risk by paying to create a lifetime income stream that starts sometime between ages 70 1/2 and 85.
"Formal efforts will allow indexed and variable annuity contracts with guaranteed lifetime income benefits eligible to be treated as qualified longevity annuity contracts," the Deloitte team predicted.
The Deloitte team also predicted that the state insurance regulators will update private rules and set new rules for insurers' use of artificial intelligence systems, private credit and reinsurance, because of rapid growth in insurer use of those tools.
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