A federal judge officially killed the Department of Labor’s Retirement Security Rule on Tuesday.
District Judge Reed O’Connor acquiesced to the request from both the DOL and the group of trade groups suing to stop the rule.
“Today’s decision rightly vacates and sets aside the 2024 Rule, which exceeded the DOL’s statutory authority and was arbitrary and capricious,” the Securities Industry and Financial Markets Association and Financial Services Institute said in a joint statement. “The order ensures that financial advisors can continue to provide the services best suited for each individual client. The 2024 rule was materially indistinguishable from a 2016 DOL rule that was struck down by the Fifth Circuit in 2018.”
Since 2015, the DOL has made multiple efforts to expand the definition of “fiduciary” under the Employee Retirement Income Security Act of 1974, aiming to require that financial professionals who give retirement advice — including brokers, agents and insurance sellers — put clients’ best interests first.
So far, the industry is undefeated in opposing such efforts.
“Today’s court ruling is a major win for every American saving for retirement,” said Finseca CEO Marc Cadin. “The Fiduciary Rule placed barriers to Americans trying to save for retirement. Removing this regulation makes it easier for retirement savers to access the sound professional advice that creates results.”
Finseca, the American Council of Life Insurers and others recently met with DOL Secretary Lori Chavez-DeRemer and Assistant Secretary Daniel Aronowitz to discuss the future rule.
“Overall, I was extremely impressed with the DOL’s leadership,” Cadin said in an email to members. “They asked terrific questions, listened to our perspective, and were extremely committed to promoting lifetime income solutions like annuities that so many Americans rely on and so many more need.”
In April 2016, the DOL finalized a broad fiduciary rule set to apply in 2017, but that rule was vacated in 2018 by a federal appeals court, which said the agency had exceeded its authority.
In April 2024, under a new administration, the DOL issued another rule — dubbed the Retirement Security Rule — again expanding the fiduciary definition to include many more retirement-investment advisors and amending prohibited-transaction exemptions.
The rule was slated to take effect in September 2024. However, legal challenges quickly followed. In July 2024, a federal judge issued a nationwide stay, blocking implementation while the lawsuit proceeded.
In 2025, favorable economic conditions, along with aging demographics and more advisors selling annuities, led to record-breaking individual annuity sales in 2025. Banks and broker-dealers did especially well, a new survey finds.
Higher interest rates allowed insurance companies to offer attractive crediting rates on accumulation products and payout rates on guaranteed income products, a major factor in sales.
According to Saltzman Associates’ inaugural annuity market year in review, which looked at institutional distribution, nearly all product lines experienced growth, with registered index-linked annuities seeing the largest growth rate in 2025 at 17%.
LIMRA’s Retail Annuity Sales Survey, which represents 92% of the U.S. market, shows total U.S. annuity sales marked a new record in 2025 – increasing 6% to $461.3 billion. LIMRA data reveals that RILA sales also set new annual sales records in 2025, increasing 20% year over year to $79.6 billion.
The Salzman report is based on data from 32 banks and broker-dealers, representing nearly $90 billion in annuity premium in 2025. This review focuses on annuity distribution channels across banks, independent broker-dealers, regional and national broker-dealers, as well as wirehouses.
The bank channel
With the favorable interest rate environment in 2025, fixed-rate deferred annuities continued to make up an overwhelming majority of bank annuity sales.
“Bank customers tend to be more conservative. With an average guaranteed return rate of just under 5% on three-to-five-year duration FRDs continue to be attractive to these consumers,” said Todd Giesing, vice president with Saltzman Associates and author of the report. LIMRA data show FRD sales improving 5% year over year to $160.6 billion.
Fixed indexed annuities did not fare as well in 2025. Given the strong risk-free rates in fixed-rate deferred products, it appears bank advisors and investors favored fixed-rate guarantees over the higher earning potential of FIA products. FIA sales in banks declined 2% in 2025.
Overall, FIA sales, according to LIMRA, were $128.2 billion in 2025, 1% higher than 2024 results.
The banks saw an increase in both traditional variable annuity and RILA sales. Traditional VA sales increased 19%, while RILA sales increased 33%. Registered annuity product sales, however, are still a small portion of banks’ overall annuity production, with both product lines only accounting for 13% of overall annuity sales.
Independent BDs record big sales
Of all the annuity channels, independent BDs have the largest menu of annuity products. Annuity sales in this channel skew more heavily to registered products, and 2025 results did not depart from that trend. Only one-quarter of the channel’s 2025 sales were in non-registered fixed products, with the remainder in traditional VA and RILA products.
Notably, over half of total annuity sales in this channel went to RILA products in 2025. RILA sales increased 10% in 2025 as the balance of growth potential and downside protection continues to resonate with advisors and investors. Traditional VA products continued to rise with sales increasing 5% for 2025.
“Frankly, I thought RILA sales would plateau at some point, but they continue to grow. This product is now a teenager, marking its 16th year in the market, yet we are still seeing more carriers entering the market and product sales continuing to climb,” Giesing said.
Fixed annuity sellers saw mixed results in the independent channel. Despite continued attractive crediting rates, FIA sales were down 7% in 2025.
Income annuities sales were down 34%, with other flexible income solutions, such as guaranteed living benefits on other product chassis, being more attractive as a solution for guaranteed income.
Regional/national BDs show mixed results
FIA sales saw a slight slowdown in this channel in 2025, likely as RILA popularity and value proposition outweighed FIA’s principal protection feature. Sales of FIA products in this channel were down 3% compared to 2024.
“Similar to other channels, income annuities experienced challenges in 2025. Sales were down nearly a third from 2024, as the focus on guaranteed income took a back seat to protection and flexibility.” Giesing said.
RILA sales continued to shine in this channel, with sales experiencing the largest percentage increase of any product type. Traditional variable annuity sales saw modest growth in 2025, increasing 3%. In 2025, just over one-fifth of sales in this channel were traditional VA products.
Wirehouse sales grow faster
When compared to other channels, wirehouses had a more balanced sales mix across annuity product types. Sales in the wirehouse channel experienced the highest growth among all channels, with total sales increasing by 18% in 2025.
Consistent with the other channels, RILA sales experienced the highest growth rate. While wirehouses also have competing alternative products to RILAs (such as structured notes) sales of RILAs increased 37% in 2025.
Traditional VA sales remain a staple for this channel, accounting for a 30% market share in 2025. With strong equity market performance in 2025, sales increased 28%.
FRDs saw modest growth at wirehouses in 2025, as attractive crediting rates during the year were an alternative to other fixed-income options available. Sales of FRD products accounted for a third of annuity sales in this channel. Wirehouse FIA sales also increased during 2025, making it the only institutional channel seeing growth in this category. Sales were up an impressive 17%, likely as higher interest rates supported strong guaranteed income solutions in this product line.
Income annuities were challenged in this channel as sales declined 10% in 2025.
Continued growth projected for 2026
Looking ahead to the coming year, Giesing said economic factors are the biggest drivers in annuity sales. “Over the last several years, we’ve seen a favorable environment with elevated interest rates leading to strong returns without much downside risk.”
“If we see declining interest rates or volatility in the equity markets, this likely will negatively impact annuity sales,” he said.
The “money in motion” phenomenon is another major influence on the individual annuity market. Over the past five years, more than $600 billion has been sold in fixed-rate deferred annuities across the industry.
Many of these products have terms of five years or less, meaning that both advisors and investors will need to consider future solutions as contracts mature.
“While some of this money is expected to move into non-annuity investment options, much of it—particularly from nonqualified fixed-rate deferred annuities sold in recent years—will likely shift to new annuity products to retain tax-deferred benefits,” Giesing notes.
“We expect the momentum in the institutional annuity markets to persist throughout 2026. I think 2026 could be another record-breaking year for annuities,” Giesing said.
Only 38% of affluent investors are comfortable with artificial intelligence, according to Cerulli Edge-U.S. Retail Investor Edition.
This comes at a time when, as Cerulli pointed out, AI is used by provider firms as a back-end function for client meetings or for review of documents.
And a Million Dollar Round Table survey found AI is becoming more popular with Americans in both personal and professional settings – including financial advising.
In fact, the MDRT survey noted that 70.8% of U.S. consumers who have an advisor think that advisors should use AI for at least one professional purpose. And using AI for smaller tasks is the safest way for advisors to avoid concern among clients.
Americans’ comfort level with AI
The MDRT survey also pointed out that Americans are the most comfortable with advisors using AI to automate tasks, such as conducting research, developing meeting summaries, etc., with 54.4% of Americans saying they agree they’re comfortable with it, including 70.7% of Americans with advisors.
On the other hand, MDRT found many Americans are not comfortable with advisors using AI for tasks that require more personal information. Across generations, 41.9% of Americans said that they are not comfortable with advisors using AI to provide tailored financial advice, although women and men do not agree on the subject.
Expanding the use of AI
But there is potential to expand the use of AI to include investment analysis, financial planning and asset mapping, Cerulli said. As providers increasingly look to AI for these functions, they must also work to assuage clients’ concerns about AI as part of their advisor relationships.
Affluent investors’ comfort level
As mentioned earlier, the Cerulli report said that only 38% of affluent investors are at least somewhat comfortable with AI technology. This percentage is roughly equal to the 39% who said the same in 2024, Cerulli pointed out. While younger investors are the most supportive of AI in their financial relationships — more than 60% of those under age 50 said they are comfortable — that level of support drops sharply among those investors who are in their 50s (to 42%), and the number is down to 16% among those who are age 70 and older.
“There seems to be little doubt that AI has the potential to make the financial services industry significantly more efficient,” said John McKenna, research analyst at Cerulli. “Currently, the emphasis is on non-value-added tasks, such as client meeting setup, note-taking and document review. However, broader adoption across the advisor-client relationship may be in the works,” he added.
Reasons for the low levels of comfort
Why do so many affluent investors have such low levels of comfort with AI? “The reason for the low levels of comfort is very similar to why comfort with online-only investment advice is so low,” explained McKenna. “It is that people place more trust in a human financial advisor than in outsourcing it to pure technology. AI is still very nascent, so there are a lot of concerns regarding its accuracy in delivering information, as well as how it may be used in a financial advice relationship.”
“When people pay for a financial advisor,” McKenna continued, “they are looking for a person on the other end of the table to talk to and get advice from that is tailored to their situation, something that is not readily replaced by an online-only service, let alone one powered by artificial intelligence.”
Helping AI play a role in business operations
What steps can financial advisors take with their affluent clients to help AI play a role in their business operations? “Advisors are increasingly adopting artificial intelligence tools into their practice, especially regarding note-taking and automating back-office tasks like client scheduling or document summary,” McKenna said. “By automating more of these tasks, it should help them scale their operations more efficiently and spend more time interacting with and helping their clients,” he added.
Florida’s recent tort reforms were designed to reduce lawsuit incentives and the additional costs that arise when claim payouts increase because of societal and legal pressures.
“They’re meaningful because they target the main factors driving higher claim costs—attorney-fee leverage, bad-faith exposure, and long-tail litigation timelines,” said Jay Robinson, division leader for the Southeast at World Insurance Associates.
However, the reforms still preserve the ability to seek compensation for legitimate claims.
“The tradeoff is that some claimants may face higher friction (and less attorney appetite) for smaller or more disputed claims,” Robinson added.
Why Florida enacted tort reforms
Not only do excess tort costs drive higher insurance and healthcare costs, they also discourage economic development. The reforms in Florida aim to address these issues by reducing unnecessary litigation and balancing the justice system.
The most significant outcome is a reset of litigation leverage — particularly through limits on property insurance disputes and tighter standards and timelines in negligence cases.
“Hopefully, this will translate into fewer opportunistic suits, faster claim resolution incentives, and better predictability for carriers and reinsurers. The impact of those changes won’t happen overnight, though. They will take time,” Robinson explained.
These reforms address the costs and long-term risks that come with litigation.
“For property, they’ve reduced incentives tied to the assignment of benefits and one-way attorney fees, which were associated with elevated claim litigation. For casualty, the changes are expected to lower the frequency and severity of large verdicts,” Robinson said.
This would ultimately improve underwriting results, reduce reinsurance pressure, attract capacity back to the state, and support a moderation in rate filings. Florida homeowners pay an average of $5,838 per year for full-service premiums, 142% higher than the national average, according to Bankrate.com.
While early indicators cited by industry groups suggest litigation volume has fallen and some insurers have pursued rate decreases, it’s important to separate litigation-driven changes from catastrophe-driven loss trends, such as hurricanes or inflation in labor and materials.
“The most noticeable impact on claim severity will initially appear in liability lines, as verdicts and settlements adjust, and in property, as fewer claims escalate into attorney-driven disputes,” Robinson explained.
When it comes to premiums, catastrophe exposure still dominates pricing, so tort reform is not a “quick fix.” However, by reducing litigation and frictional costs while improving carrier profitability, reforms can slow the pace of increases.
They can also encourage more competition and availability while stabilizing reinsurance costs that ultimately affect retail rates.
Translating legal changes into practical guidance
The goal of advisors is to translate “legal-system” changes into practical insurance implications.
“That includes explaining how reforms may affect claim handling timelines, documentation expectations, settlement dynamics, and premium and availability trends. Communication with clients that sets expectations around the changes will always be important,” Robinson said.
Benefits to clarify with clients include potentially fewer lawsuits, more predictable outcomes, improved carrier stability, and moderation of litigation-driven costs. The challenges? Clients may hear conflicting media narratives. Savings may take time, and catastrophe risk and inflation could overwhelm any litigation savings.
“Using plain-language and anecdotal examples is a good idea. It helps to share examples specific to the client’s industry,” Robinson explained.
Advisors should also anticipate and prepare for questions, such as:
Will my premiums go down—and when?
Does this change how quickly my claim will be paid or settled?
Will it affect my right to sue or recover damages?
What should I do differently after a loss?
While answering them, focus on providing balanced, practical guidance. Additionally, remind clients that while reforms are intended to reduce litigation pressures and support a more stable insurance marketplace, they’re only one part of a much broader set of factors that influence insurance costs and availability.
Despite several high-profile lawsuits and continued market turbulence, indexed life insurance remains the preferred product for consumers.
Indexed life sales for the fourth quarter were $918.9 million, up 20% compared with the previous quarter, and up 6.2% compared to the record set in Q4 2025, Wink Inc. reported in its Sales & Market Report. Total 2025 indexed life sales were $3.2 billion.
Indexed life sales set both a quarter and yearly record, Wink found. Transamerica Life’s Financial Foundation IUL II, an indexed universal life product, was the No. 1 selling product for all life sales, for all channels combined, for the third consecutive quarter, Wink said.
“Indexed life sales have been setting records since a lull in 2020,” said Sheryl J. Moore, CEO of both Moore Market Intelligence and Wink Inc. “I am intrigued on how recent litigation will impact sales, going forward.”
IUL sellers are currently facing a wave of legal challenges centered on allegations of misleading marketing and unrealistic performance illustrations. In February, Pacific Life agreed to a $58.3 million settlement to resolve a lawsuit claiming it used deceptive illustrations to sell policies, shortly followed by a private settlement with NASCAR champion Kyle Busch, who alleged losses of over $8.5 million.
Meanwhile, National Life Group is defending a renewed lawsuit in Vermont where plaintiffs label its proprietary indices a “fraudulent sham” for using back-tested data that fails to match real-world 0% returns.
All life insurance sales for the fourth quarter were over $3.2 billion, up 14.9% compared to the previous quarter and up 3.2% compared to the same period last year. Total 2025 sales of all life insurance were $11.7 billion. All life sales include fixed universal life, indexed UL, variable UL, indexed whole life, whole life and term life product sales.
Courtesy of Wink, Inc.
Massachusetts Mutual Life Companies ranked as No. 1 in overall for all life sales, with a market share of 6.8%, Wink reported.
Wink’s full life insurance breakdown for Q4 and the full year, by product category:
All universal life sales for the fourth quarter were over $1.3 billion, up 20.9% compared to the previous quarter and up 5.2% compared to the same period last year. Total 2025 sales of all universal life products were $4.8 billion. All universal life sales include fixed UL, indexed UL, and variable UL product sales.
Noteworthy highlights for all universal life sales in the fourth quarter included Pacific Life Companies ranking as No. 1 in overall sales for all universal life sales, with a market share of 12.5%.
Courtesy of Wink, Inc.
Non-variable universal life sales for the fourth quarter were $1 billion, up 20.3% when compared to the previous quarter and up 5.6% compared to the same period last year. Total 2025 non-variable UL sales were $3.5 billion. Non-variable universal life sales include both fixed UL and indexed UL product sales.
Noteworthy highlights for total non-variable universal life sales in the fourth quarter included National Life Group retaining the No. 1 overall sales ranking for non-variable universal life sales, with a market share of 14%.
Courtesy of Wink, Inc.
Fixed universal life sales for the fourth quarter were $88 million, up 21.2% compared to the previous quarter and down 0.6% compared to the same period last year. Total 2025 fixed UL sales were $309.8 million.
Items of interest in the fixed UL market included Nationwide retaining its No. 1 ranking in fixed universal life sales, with a 18.4% market share; Prudential, Pacific Life Companies, John Hancock, and Thrivent Financial completed the top five, respectively.
Pacific Life’s PL Promise GUL was the No. 1 selling fixed universal life insurance product, for all channels combined, for the quarter. The top primary pricing objective, with a no-lapse guarantee, captured 34.1% of sales. The average fixed UL target premium for the quarter was $8,765, an increase of more than 19% from the prior quarter.
Courtesy of Wink, Inc.
Indexed life sales for the fourth quarter were $918.9 million, while total 2025 indexed life sales were $3.2 billion. The record-setting year for indexed life sales topped the prior 2024 record by 8.1%. Indexed life sales include both indexed UL and indexed whole life.
Items of interest in the indexed life market included National Life Group retaining its No. 1 ranking in indexed life sales, with a 15.3% market share; Pacific Life Companies, Transamerica, John Hancock and Nationwide rounded out the top five, respectively.
Transamerica Life’s Financial Foundation IUL II was the No. 1 selling indexed life insurance product, for all channels combined, for the fifth consecutive quarter. The top primary pricing objective for sales in the quarter was cash accumulation, capturing 73.8% of sales. The average indexed life target premium for the quarter was $13,293, an increase of nearly 7% from the prior quarter.
Courtesy of Wink, Inc.
Variable universal life sales for the fourth quarter were $391 million, up 22.4% compared with the previous quarter and up 4.3% compared to the same period last year. Since Wink began tracking sales of these products in 2024, it was a record-setting quarter for variable universal life sales, topping the prior 4th quarter, 2024 record by 4.3%.
Total 2025 variable UL sales were $1.2 billion. It was also a record-setting year for variable universal life sales, topping the prior 2024 record by 5.3%.
Items of interest in the variable universal life market included Prudential retaining the No. 1 ranking in variable universal life sales, with a 28.1% market share; John Hancock, Pacific Life Companies, Nationwide and Lincoln National Life completed the top five, respectively.
Pruco Life’s Prudential FlexGuard Life IVUL was the No. 1 selling variable universal life product, for all channels combined for the quarter. The top primary pricing objective for sales this quarter was cash accumulation, capturing 76.6% of sales. The average variable universal life target premium for the quarter was $25,659, an increase of nearly 14% from the prior quarter.
“No doubt that variable UL sales will be down in 2026,” explained Moore. “Volatility in the markets usually translates to declining sales of both variable annuities and variable UL.”
Courtesy of Wink, Inc.
Whole life fourth quarter sales were over $1.2 billion, up 17.4% compared with the previous quarter, and up 6.1% compared to the same period last year. Total 2025 whole life sales were $4.5 billion. Items of interest in the whole life market included the top primary pricing objective of final expense, capturing 70.2% of sales. The average premium per whole life policy for the quarter was $4,786, an increase of more than 20% from the prior quarter.
Courtesy of Wink, Inc.
Term life fourth quarter sales were $565.2 million, down 1.6% compared with the previous quarter and down 6.4% compared to the same period last year. Total 2025 term life sales were $2.3 billion.
Items of interest in the term life market include Pacific Life Companies ranking as No. 1 in term life sales, with a 5.5% market share. Prudential, Corebridge Financial, Protective Life Companies and National Life Group completed the top five, respectively.
Pacific Life’s Promise Term 20 was the No. 1 selling term life insurance product, for all channels combined, for the quarter. The average annual term life premium per policy reported for the quarter was $2,678, an increase of more than 20% from the previous quarter.
Courtesy of Wink, Inc.
Wink now reports sales on all annuity lines of business, as well as all life insurance product lines.
A panel of insurance and legal leaders says artificial intelligence is rapidly transforming the life and annuities industry, but continued success will depend on thoughtful governance, compliance oversight and intentional use.
Andrew Payne, vice president and general counsel at CreativeOne, said many advisors are using AI tools for client note-taking, summarization, search functions and marketing drafts.
“We’ve been telling folks for years that it’s great to document your conversations, and great to follow up with your clients on those notes,” Payne explained. “Now we’ve got easy tools that do it for you. So, I think people are starting to come around and doing this as a real compliance helper, as opposed to this thing that could potentially run afoul of compliance.”
Develop the input
Payne cited the Geoff Woods book, The AI-Driven Leader: Harnessing AI to Make Faster, Smarter Decisions, as a good source for learning how to develop good AI inputs.
“The real thing that we should be trying to learn is how to use this tool, and really developing that input,” he said. “If I would give anyone one recommendation, it’s to start working on that as a skill. About how to use … your inputs into the model to get the best output.”
Jackie Boehm is senior vice president of project management and IT strategy at American Equity. Don’t try to start from scratch, she advised.
“I think it’s starting already approved content,” Boehm said. “What do you have that’s already content approved, marketing approved and then build upon it for your personalization.”
AI initiatives increasingly focus on identifying workflow pain points and measuring productivity gains through defined pilot programs, she explained.
For beginners, their introduction to AI is generally via use as a supercharged Google, noted Chris Fuhrer, vice president of distribution for Southwest Annuities Marketing.
“Both understanding what its capabilities are but taking the time to give it the right amount of context, that was the game changer for me,” Fuhrer said. “That’s when it started to really click for me.”
Smaller companies competing with AI
Newer insurance entrants in the life and annuity market are increasingly using artificial intelligence to streamline underwriting and compliance reviews, taking advantage of modern technology infrastructures that avoid the legacy systems common at older firms, the panel noted.
Unlike long-established insurers that often operate on decades-old technology platforms, many newer entrants have built their systems around current digital tools. That allows them to incorporate AI earlier in the process, particularly for initial underwriting reviews and suitability checks.
Compliance is more cost-effective as well, noted Trish Carreiro, chair of the Privacy, Cybersecurity and AI practice at Carlton Fields.
“I think one piece of this is to remember the role that technology can play and allowing you to do more work than you otherwise could,” she said. “You can use technology to oversee technology as well. And that is increasingly common, and I think, a definite force multiplier.”
Even with automation, however, humans remain involved in key decisions.
“We are still seeing reviews get to humans at some point,” Fuhrer said. “But there are fixed parameters that they can earmark and go from there.”
The panel also drew comparisons to earlier regulatory shifts in the industry, including the implementation of best-interest standards for annuity sales that forced insurers and intermediaries to develop new governance frameworks.
At the time, companies rushed to build compliance guardrails and oversight systems to meet regulatory expectations. Experts say AI tools today serve a similar role by embedding rules and controls that guide how financial professionals interact with technology.
Marketing concerns
Increasingly, AI is part of marketing campaigns, another area of concern for insurers – and compliance departments.
AI-generated advertising copy for annuity products must comply with existing regulatory standards, including suitability, disclosure and prohibited language rules. Panelists also cautioned against overreliance on AI-generated imagery or messaging that could erode consumer trust.
There are software programs out that will flag problematic marketing copy, Payne explained, such as showing a pot of gold, or the word “guarantee” in a misleading way.
“Those will become more and more sophisticated,” he added. “Just as you can build out marketing development, you can build in compliance to it.”
‘The most intentionally’
Despite the risks, the experts said AI adoption is inevitable — including potential future applications in product selection tools, suitability analysis and client modeling — so long as human oversight remains central.
The panel’s advice for firms just starting out: begin with education, identify business pain points, build structured evaluation frameworks and develop stronger prompt-writing skills before expanding into broader use cases.
“The firms that win won’t be the ones with the most AI,” Bone said. “They’ll be the ones using it the most intentionally.”
Advantage Capital signed an agreement with global investment manager Oaktree Capital Management to provide critical funding support for its financially troubled life insurance subsidiaries.
The firm known as A-Cap announced the deal Friday for Oaktree to acquire a controlling stake in Atlantic Coast Life Insurance Co., while also providing capital to Sentinel Security Life Insurance Co.
Oaktree will fund a “surplus note investment into a newly created captive insurance company,” the new partners explained in a news release.
A-Cap battled state regulators and AM Best in recent years over the financial strength of Atlantic Coast and Sentinel Security. On Jan. 23, AM Best downgraded the financial strength ratings of both insurers. In 2024, A-Cap sued AM Best over a proposed ratings downgrade – a lawsuit later settled.
Kenneth King, chairman and CEO of A-Cap, stressed Oaktree’s “track record of investing alongside insurers, particularly during times of transition.
“Oaktree’s insurance-focused credit expertise and flexible, long-term capital will support disciplined growth of our balance sheet, enhance our asset liability profile, and strengthen our ability to serve our policyholders and distribution partners over the long term,” he added in a news release.
All of the net proceeds from the transactions will be used to “support the growth and long-term objectives of Sentinel and its policyholders,” the release said.
“The company will benefit from our meaningful experience in regulated carve-outs as it works to complete its pre-closing transaction milestones,” said Patrick C. George, senior vice president, global opportunities, at Oaktree. “Following closing, we believe both Atlantic Coast Life and Sentinel will be well positioned to prioritize policyholder protection, financial strength, and sustainable long-term growth.”
Oaktree is a global investment manager specializing in alternative investments, with $223 billion in assets under management as of Dec. 31, 2025. The firm “emphasizes an opportunistic, value-oriented, and risk-controlled approach to investments in credit, equity, and real estate,” the release said.
Financial strength questioned
AM Best said its ratings downgrade is “based on weakness in A-CAP Group’s business profile as manifested in the material decrease in new premium and material increase in surrenders/outflows, as well as reputational damage resulting from publicized regulatory rulings.”
Regulators argued A-Cap used flawed, internal valuations to overstate the worth of high-risk assets, while independent audits valued those same assets at significantly lower amounts. While the states banned the insurers from writing new business, administrative law judges in both states later stayed or overturned these orders.
A-Cap provided information that “demonstrates surrenders and outflows have decreased,” AM Best noted. The insurers’ primary focus is the fixed index annuity market, a “dynamic and credit sensitive sector with strong long-term prospects,” the ratings agency added.
AM Best downgraded the FSR from B++ (Good) to B (Fair) and the Long-Term Issuer Credit Rating from “bbb” (Good) to “bb+” (Fair) for both A-Cap life insurers.
“The downgrades are also based on a decline in AM Best’s overall assessment of A-CAP Group’s balance sheet strength,” the release added. “AM Best acknowledges A-CAP Group’s pending capital raise, but also recognizes its level of illiquid assets, concentrated reinsurance leverage, which is mitigated through the use of funds held and modified coinsurance agreements, along with a recent decline in its overall capital adequacy ratios that have not fully recovered to historic levels.”
A group of large PHL Variable policyholders, and the Connecticut insurance commissioner both took aim at Nassau Financial Group in separate court filings this week.
Both the policyholders and interim Commissioner Joshua Hershman, serving as the rehabilitator in the proposed liquidation of the financially troubled PHL, are after the same thing: Money.
Hundreds of millions of dollars are at stake as Connecticut regulators navigate the liquidation proposed by Hershman on Dec. 31, 2025. State Superior Court Judge Daniel J. Klau approved rehabilitation for PHL in May 2024.
Since then, Judge Klau has ruled on several twists and turns in the case. Former insurance commissioner Andrew Mais steadfastly pursued a rehabilitation plan before retiring in late November 2025. Hershman abruptly pivoted to liquidation in a Dec. 31 status report.
That ratcheted up the pressure to find an equitable financial solution. Particularly for so-called “over-the-cap” policyholders, who are entitled to death benefits in excess of $300,000, a moratorium was established by a June 2024 court order. That figure mirrors state guaranty association limits.
A group of over-the-cap policyholders filed a motion Tuesday to obtain “relief” allowing the group to pursue “certain claims against Nassau Financial Group (and related subsidiaries), Golden Gate Capital and others … for looting PHL at the expense of the” policyholders.
The group alleged self-dealing, breach of fiduciary duty, fraudulent and negligent misrepresentation, state unfair trade and insurance violations, and civil Racketeer Influenced and Corrupt Organizations Act violations.
‘Facilitate an orderly transition’
Over-the-cap policyholders “will pursue these tort claims on a fully contingent basis that will be accretive to PHL in rehabilitation and facilitate an orderly transition from rehabilitation to liquidation,” their motion reads.
Meanwhile, Hershman filed a status update on Tuesday. In it, he provided more details of claims against Nassau and Golden Gate hinted at in the Dec. 31 report.
Affiliates of Nassau Financial provide administrative services to the rehabilitator under agreements that precede the rehabilitation proceeding. From May 2024 through December 2025, Nassau charged the PHL companies $10.7 million for investment services and $65.6 million for administrative services.
“There are pending disputes between Nassau and the Rehabilitator concerning these arrangements and charges assessed under the agreements,” Hershman wrote. “The Rehabilitator believes that the charges … have been and continue to be materially above market as a result of the allocation of certain expenses to PHL. Nassau disputes this.”
As of the end of 2025, there are about 8,000 active universal life insurance policies, with about 3,200 having death benefits greater than the applicable state guaranty association limits, the status report said.
Of those, 343 of the active over-the-cap UL policies “appear to be owned by institutional investors,” Hershman wrote, which represents 26% of the total outstanding death benefits on the policies.
Additional policyholder claims
In a memorandum supporting their filing, the over-the-cap policyholders also alleged that the court-appointed rehabilitator has failed to aggressively pursue claims against Nassau and Golden Gate despite acknowledging that potential claims against the companies may exist.
They further claim the rehabilitator may have a conflict of interest because some of the transactions now under scrutiny were previously approved by state regulators.
Nassau Financial Group (then Nassau Re) acquired PHL Variable as part of a 2016 purchase of The Phoenix Companies for $217.2 million.
The over-the-cap policyholders say that PHL was weakened through complex reinsurance arrangements involving affiliated entities, including transactions with captive insurers and offshore reinsurers.
“Almost immediately following the acquisition, PHL was systematically gutted by Nassau and its affiliates and rendered hopelessly insolvent,” the policyholders’ memo reads. “Billions in sham, circular, non-arm’s length reinsurance transactions were consummated by and among various PHL and Nassau affiliates and captive insurance companies located in Connecticut, Vermont and the Cayman Islands.”
According to the policyholders, those transactions allowed affiliated companies to replace assets on PHL’s balance sheet with obligations from related entities, while the insurer took credit for billions of dollars in reserve relief.
The policyholders also pointed to litigation in Delaware involving alleged stranger-originated life insurance transactions that they say raised additional concerns about dealings involving Nassau-affiliated entities.
If granted permission to intervene, the policyholders argued that any recoveries could ultimately benefit the rehabilitation estate while allowing policyholders to seek damages for losses above guaranty association limits.
The policyholders asked the court to schedule a hearing on the request as soon as possible.
Advancements in technology are ushering in what experts on a recent InsTech panel have dubbed the “golden age of underwriting,” a period expected to be marked by greater speed, efficiency and managing general agency activity.
“I think now, with the evolution of technology, that we can move into this golden age because the technology allows, especially underwriters, to have systems that they can use and be effective with,” Matthew Twist, chief risk officer and commercial director at Concirrus, said during the webinar.
However, he underscored that the industry hasn’t hit that golden peak just yet, noting that there are still more challenges to address before insurance can get there.
“If we’re going to talk about the golden age of underwriting, we must be realistic about where we are today. And if we’re in an industry where very skilled and capable people are keying in information into a system and then into another system and potentially another system after that, are we really in the golden age? Probably not,” he said.
His fellow panelists agreed and emphasized the need for dialogue between IT and underwriters in the field to ensure technology is not only developed in a meaningful way but also that uptake is encouraged on an individual level.
Underwriting transformed
One of the biggest ways technology can transform underwriting for the better is by making the process faster, smoother and more efficient overall, panelists said.
“Insurance, on the whole, is still quite an admin-heavy industry. Tech is essential for us to free up our time and do exactly what we need to be doing, which is building our client base, building our relationships and fundamentally underwriting,” Lisa Rowe, senior underwriter, financial lines and cyber, Specialty MGA UK, said.
At the same time, she said consultation between tech teams and end users — which she suggested “has been missing a lot of the time” — is crucial for implementation and adoption.
“I’m sure we’ve all been in a position where a new tech stack has been implemented and we’re going into it saying, ‘This doesn’t really do what I need it to do.’ I think embracing technology but also consulting with the end user is going to bring forward a more golden age, as it were,” she said.
Rowe acknowledged, however, that underwriters can also do a better job of adapting to new technologies and strategies.
“I think it’s a two-pronged conversation. Some of us can adapt to change a little bit more readily than others; some underwriters are still quite old school — they like paper. So, there’s a bit of a shift needed to a degree from the individuals,” she said.
Some of this is already happening, as business user engagements are “at an all-time high,” according to Robin Merttens, chairman and co-founder, InsTech.
“I’ve not seen this level of genuine interest from underwriters, brokers or accounting teams. That’s partly because there’s a sort of age profile — the tech savviness is improving, so that people know what tech can do, they’re using it more in their personal lives and they get involved,” Merttens said.
More tech-driven MGA activity
Merttens also pointed to the potential for greater MGA activity resulting from innovators taking advantage of the tech momentum to build a fully digital, AI-enabled business.
Twist agreed, noting that it could be “quite an appealing option” for an entrepreneurial underwriter stuck in “more of a legacy setup.”
“We see a massive rise in the MGA market, in the London market specifically and across the US. And, arguably, in the next three to five years, these are the companies that will be successful because they’re set up for success immediately,” Twist said.
Piers Williams, CRO, Diesta, added that the delegated market has been growing consistently year on year, creating ripe conditions for MGA growth.
“If we look at also the cycles that we often see in insurance, we’ve seen a lot of those mid and larger-sized MGAs be consolidated over the last few years… We are certainly seeing there is this new wave of startup MGAs looking at these very specific or far more tailored and customer-centric products in the market, using technology to back up those offerings, both from an underwriting side and also right across that organization’s architecture and utilization of technology,” Williams said.
No gold medal yet
While prospects are improving, Rowe agreed with Twist’s point that the insurance industry hasn’t reached its golden age of technology just yet and still must contend with managing risks alongside benefits.
“There’s a way to go, but we are moving forward in a positive light in terms of our adoption of tech and AI. The golden age of underwriting is coming. It’s going to take a concerted effort for us all to work together to achieve that, but we’re in an increasingly competitive environment and adopting, as opposed to running away from, these types of tech enablements will be the decisive factor for success,” Rowe said.
InsTech is a UK-based global data insights company and insurance community founded in 1971
Concirrus is an AI-powered underwriting platform founded in 2012.
Diesta is an AI-driven insurtech startup founded in 2022 that specializes in automation of premium reconciliation and distribution.
Specialty MGA UK is part of the MNK Group, a global reinsurer founded in 2009.
Younger generations are going through serious health issues earlier in life, with substantial implications for employer-sponsored health plans. That was the word from UnitedHealthcare and Health Action Council, which published a white paper on their findings.
The report pointed out that costs for employer-sponsored health care benefits are rising more quickly than general inflation and wage growth, affecting employers and their employees. For example, the report said, KFF’s 2025 Employer Health Benefits Survey reports a 6% increase in per-employee benefit costs in 2025, with a projected 6.5% rise in 2026. These trends reflect the continued affordability pressures facing the American health system.
“Employers are seeing health issues show up earlier and feeling the cost impact sooner,” said Patty Starr, president and CEO of Health Action Council. “This report gives plan sponsors the transparency and insight they need to spot health problems earlier, help people stay on top of basic and preventive care, and help them stay healthier while keeping benefits affordable.”
Main takeaways from the report
One of the main takeaways of the report is that health risks and health care costs are showing up earlier than many employers expect, putting added pressure on employer‑sponsored health plans, said Craig Kurtzweil, chief data analytics officer for UnitedHealthcare Employer & Individual. “Costs for employer‑sponsored health care benefits continue to rise faster than general inflation and wage growth, affecting both employers and their employees,” he added.
That cost pressure is being driven in part by an increase in serious, high‑cost health events, Kurtzweil explained. Conditions such as heart attacks, strokes, complex surgeries and illnesses such as cancer or genetic disorders are becoming more common across the workforce. In fact, Kurtzweil said, “these major health events are now about twice as frequent as they were five years ago, and average monthly claims tied to them have increased nearly 40% since 2020.”
At the same time, the report points to a clear generational shift. Although millennials and Generation Z still have lower overall health care claims than those of older generations, costs for these younger generations are rising at a much faster pace, Kurtzweil added. Between 2023 and 2025, their year‑over‑year growth rate was nearly double that of baby boomers. “The data shows younger adults are developing chronic conditions such as diabetes, obesity and high blood pressure earlier in life and are less likely to engage in regular primary care, which increases the likelihood that health issues become more serious and more costly over time,” he said.
Taken together, Kurtzweil said, these trends suggest that some longstanding assumptions about how age, risk and cost show up in employer health plans are shifting. “For employers, and for the agents and advisors who support them, the report underscores the importance of paying closer attention to emerging risks earlier and across a broader portion of the workforce,” he added.
Using the report’s data
Employers can play an important role by using insights about their workforce to shape benefits and engagement strategies more intentionally, Kurtzweil said.
To start, the data can help employers better understand the specific health risks within their employee population and focus on earlier intervention. “Encouraging preventive care and consistent use of primary care is especially important,” Kurtzweil pointed out. “The report finds that people who regularly see a primary care provider have 27% lower claims for major health events, along with fewer emergency room visits and hospital admissions.”
Beyond primary care, Kurtzweil said, employers can also look at benefit design that makes care easier to understand and easier to access. Plans that offer clearer upfront costs and simpler navigation can help employees make more informed decisions about where to go for care and when.
Finally, Kurtzweil said, the report highlights how evidence‑based programs such as metabolic health support, lifestyle coaching and weight management can help reinforce care outside the doctor’s office when paired with strong primary care engagement. “Using data to identify early warning signs, including gaps in preventive care or early indicators of chronic conditions, can help employers step in sooner, before those issues turn into higher‑cost health events,” he added.
Overall, Kurtzweil said, “the report shows that when employers act on these insights and focus on early engagement, preventive care, and primary care access, they can help support better employee health while helping to manage long‑term health care costs.”
Access the white paper (pdf) for strategies to help improve workforce health engagement and affordability.
