BISA Magazine - Quarter 3, 2017 - 20

FEATURE STORY
Reprinted with permission of
LIMRA Secure Retirement
Institute (the retirement research
arm of LIMRA).

Meanwhile, "Independent [insurance]
agents fixed sales continue to decline,
driven by declining indexed annuity
sales. Indexed annuities make up over
80 percent of independent agents'
fixed annuity sales," LIMRA added.
Independent insurance agents, the
leading channel, accounted for $9.1
billion in fixed annuity (all kinds -
not just FIAs) sales in Q1 2017, compared with $6.8 billion for banks, the
second leading distribution channel.
They were trailed by full-service
national B/Ds ($3.9 billion), career
insurance agents ($3.3 billion), independent B/Ds ($2.6 billion), "Other"
($1.4 billion) and direct response
($0.4 billion).
Meanwhile, InsuranceNewsNet reported in April that American Equity opted
last year "to dial back on FIA sales
through the independent [insurance]
agent channel ... American Equity
executives said that the company's liability risk associated with distributing
FIAs through IMOs and independent

agents was too high."1 By comparison,
the potential liability for carriers is
much lower in the bank channel under
the DOL's fiduciary duty rule.
Todd Giesing, director of annuities,
LIMRA, explains: The IMO world is
experiencing more disruption from the
DOL rule as compared to other channels because IMOs are not listed as
financial institutions. This means they
can't get the best interest contract (BIC)
exemption if and when DOL is fully
implemented in 2018. "That could hurt
[the IMOs] in 2018 if the BIC is instituted," Giesing told us.
"The DOL picture is still murky," says
Renee Montz, American Equity's executive vice president and general counsel,
when asked about the current state of
the fiduciary rule.
The rule probably won't be thrown
out completely, she says, but at the
end of 2018 the rule will look different
from what was implemented on June
9, 2017. Parts of it may be repealed, or
the class-action lawsuit issue may be

1. Cyril Tuohy, "Allianz Life Widens FIA Lead Over American Equity," InsuranceNewsNet, April 20, 2017.

20
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Table of Contents for the Digital Edition of BISA Magazine - Quarter 3, 2017