With sales of annuities exploding to record levels, it’s probably no surprise that in the first nine months of 2024 total annuity sales increased 23% to $331.2 billion, and are on pace for another record-breaking year, according to LIMRA’s U.S. Individual Annuity Sales Survey.
Total U.S. annuity sales reached a record-high $385.4 billion in 2023, ballooning 23% year over year, according to LIMRA’s U.S. Individual Annuity Sales Survey. Insurers last year paid out $104 billion in annuity benefits, the most ever, and a nearly 10% increase over 2022 benefits.
“Annuities have been available for more than a century, though in many ways you could say they are finally being understood as a retirement product for most everyone,” said David Chavern, president, and CEO of the American Council for Life Insurers. “For example, research shows that people retiring with $250,000 or less would most benefit from annuitizing higher portions of their retirement savings, if not all of it.”
Interestingly, ACLI data show life insurance purchases and in-force coverage increased in 2023 to record levels, while life insurance death benefit payments decreased nearly 3 percent to $89 billion.
Traditional pensions ‘declining’
“Traditional pensions that guarantee retirees income for life are declining. Couple that with the Peak 65 era we are in today with 11,200 on average daily reaching age 65 and it is clear why Americans are dedicating more of their savings to annuities. They want guaranteed sources of retirement income,” Chavern said.
LIMRA announced Thursday that total retail life insurance new annualized premiums jumped 6% to $3.9 billion in the third quarter 2024. The number of policies sold in the third quarter was level with the same period in 2023. Year to date (YTD), new premiums topped $11.6 billion, up 1% over the prior year’s results.
“Following solid third-quarter results and strong preliminary October sales figures, LIMRA expects 2024 will mark the fourth year of record-high new premium collected for the industry,” said John Carroll, senior vice president and head of Life & Annuities, LIMRA and LOMA. “Barring an unforeseen economic downturn, LIMRA is forecasting life sales to grow in 2025.”
VUL new premium rises
Variable universal life (VUL) new premium totaled $668 million in the third quarter, 41% higher than third quarter 2023. Accumulation-focused products drove much of the sales this quarter, prompted by the continued growth in the equity markets. The number of policies sold rose 3% in the quarter. Year-to-date, VUL new premium jumped 17% to $1.6 billion and policy count increased 4%. In the third quarter, VUL held 17% of the total U.S. individual life insurance market.
Whole Life new premium totaled $1.3 billion in the third quarter, down 3% from the prior year’s results. The number of whole life policies sold slipped 1%. YTD, whole life new premium dropped 6% to $4.3 billion. Policy count fell 4% compared with the same period in 2023.
“Whole life sales continue to struggle under higher interest rates as consumers move to products with potentially better returns,” said Karen Terry, assistant vice president, head of LIMRA’s insurance product research. “Should the yield curve return to normal next year, we expect WL sales to improve in 2025.”
In the third quarter, whole life new premium represented 34% of the total life insurance market.
Term life sales also tumbled slightly in the third quarter, LIMRA said. In the third quarter, term life new premium totaled $727 million, down 1% year over year. Policy count also fell 1%, compared with third quarter 2023. The number of policies sold increased 1% in the first nine months of 2024. Term life new premium represented 19% of total sales in the third quarter.
Anthem Blue Cross Blue Shield is backing down from a plan that would have set limits on the amount of time it would pay for anesthesia in certain surgeries.
In November, Anthem had told health care providers that its plans in Connecticut, New York and Missouri would no longer pay for anesthesia care if the surgery or procedure were to go beyond a specified time limit, regardless of how long the surgical procedure took. The change was to take effect Feb. 1, 2025. At the time of its announcement, Anthem said the change is part of an effort to make health care more affordable by reducing overbilling for anesthesia.
Exceptions were to be made for surgeries on patients under the age of 22 and for anesthesia administered in maternity-related care.
After an association of medical professionals went public with their concerns about the plan, a spokesperson for Elevance Health, Anthem’s parent company, told InsuranceNewsNet the insurer has “decided to not proceed with this policy change.”
“There has been significant widespread misinformation about an update to our anesthesia policy,” said Janey Kiryluik, staff vice president, corporate communications, with Elevance Health.
“To be clear, it never was and never will be the policy of Anthem Blue Cross Blue Shield to not pay for medically necessary anesthesia services. The proposed update to the policy was only designed to clarify the appropriateness of anesthesia consistent with well-established clinical guidelines.”
The American Society of Anesthesiologists, which represents 59,000 members, had called on Anthem to reverse this policy, calling it “another example of insurers putting profits over patients.”
In a news release, the ASA said payment for anesthesia services is based on several factors, including the exact amount of time for anesthesiologists to deliver care preoperatively, during the operation, and when transitioning the patient to the recovery unit afterward. With this new policy, Anthem would have pre-determined the time allowed for anesthesia care during a surgery or procedure. If an anesthesiologist submitted a bill where the actual time of care was longer than Anthem’s limit, Anthem would then have denied payment for the anesthesiologist’s care, according to the ASA. “With this new policy, Anthem will not pay anesthesiologists for delivering safe and effective anesthesia care to patients who may need extra attention because their surgery is difficult, unusual or because a complication arises,” the association had said.
ASA had urged people concerned about Anthem’s proposal to contact their state insurance commissioner or state legislator.
As one of the largest healthcare insurers in the United States, UnitedHealthcare and late CEO Brian Thompson are defendants in numerous lawsuits. But one in particular, filed in U.S. District Court for Minnesota, is notable in light of the brazen Wednesday morning shooting death of Thompson in downtown Manhattan.
Thompson joined UnitedHealth Group in 2004 and was named CEO for UnitedHealthcare in April 2021. A few months prior to that, on Jan. 6, 2021, UnitedHealth announced its largest acquisition ever: Change Healthcare, a health technology company, for $13 billion.
Change operated a clearinghouse, processing health insurance claims and moving data from entity to entity. According to a UnitedHealth estimate, more than half of American medical insurance claims “pass through (or touch)” Change’s systems.
DOJ on alert
On Feb. 24, 2022, the Department of Justice sued to block the Change acquisition on antitrust grounds, arguing UnitedHealth would gain access to sensitive data that it could wield against its competitors. UnitedHealth prevailed and the Change acquisition was finalized.
Throughout the dispute, UnitedHealth executives insisted that the company had “internal firewalls that prevent the sharing of competitively sensitive information across business units,” plaintiffs say.
Shares soared from about $350 per share when the Change acquisition was announced to more than $500 per share in February 2024, when Change networks fell victim to a systemwide cyberattack.
By that point, UnitedHealth executives were already keeping secrets from investors, plaintiffs allege in the Minnesota class-action lawsuit. On Oct. 10, 2023, UnitedHealth received notice that the DOJ had launched a “non-public antitrust investigation into the company,” the lawsuit states.
“Concealing this material information from investors and the public, UnitedHealth chairman Stephen J. Hemsley and several other senior executives immediately took action – selling more than $100 million of their own UnitedHealth stock at artificially inflated prices as the market and other investors remained unaware of the new federal antitrust investigation,” the lawsuit claims.
When the Wall Street Journal exposed the investigation in a Feb. 27, 2024 article, the price of UnitedHealth stock declined over $27 per share, falling from $525.32 per share on Feb. 26, 2024 to $498.28 on Feb. 28, 2024, the lawsuit notes.
In response, Sen. Elizabeth Warren, D-Mass., was among lawmakers from both parties to call for investigations of UnitedHealth.
“Because UnitedHealth has bought up every link in the healthcare chain, it’s in a position to jack up prices, squeeze competitors, hide revenues, and pressure doctors to put profits ahead of patients. UnitedHealth is a monopoly on steroids,” Warren said in a statement.
New report alleges improper payments
The class-action lawsuit was initially filed on May 14 with the City of Hollywood Firefighters’ Pension Fund as the lead plaintiff. It has since been amended twice, most recently last week.
On Oct. 24, 2024, the Office of Inspector General released a new report titled: “Medicare Advantage: Questionable Use of Health Risk Assessments Continues To Drive Up Payments to Plans by Billions.”
The government watchdog found that UnitedHealth reaped $3.2 billion in extra federal payments in 2023 for diagnoses from in-home health risk assessments (HRAs) and HRA-linked chart reviews. According to the report, UnitedHealth accepted these payments even though the patients did not receive any additional treatment or medical services following the new diagnoses, the lawsuit noted.
The lawsuit class includes any owners of UnitedHealth Group shares between Sept. 22, 2021 and Feb. 27, 2024. During this time, Thompson sold over 31% of his UnitedHealth shares for proceeds of over $15 million, the lawsuit says.
“Throughout the Class Period, UnitedHealth leveraged its monopolistic power to crush competition, manipulate government officials, and force others in the healthcare industry to cede to its demands. In the process, UnitedHealth unlawfully obtained billions of dollars of revenue from the federal government, healthcare providers, and its own members,” the lawsuit states.
On Wednesday, Magistrate Judge David T. Schultz signed an order giving UnitedHealth, and Hemsley and Thompson, until March 1, 2025 to respond to the amended complaint.
Several California teacher lawsuits over in-plan annuity costs have been consolidated into one case involving rider fees.
The judge is giving participants plenty of leeway for mediation, with a trial dates scheduled for November and December 2026.
The initial lawsuits, filed in the Northern District of California, alleged several violations of the California Education Code and the California Unfair Competition Law. Teachers claimed the cost of the annuities ate into their 403(b) retirement plans.
California teachers do not contribute or receive Social Security funds. According to the California State Teachers’ Retirement System, the largest educator-only pension fund in the world, the average teacher who retired in 2020–21 had 25 years of service and a monthly benefit of $4,813, or $57,756 a year.
The insurers named as defendants are Life Insurance Company of the Southwest (LICS), North American Company for Life and Health Insurance, and Midland National Life Insurance Company.
The cases were filed in 2023. Plaintiffs allege that the insurers are “charging teachers millions of dollars in undisclosed and unauthorized fees on their supplemental retirement savings plans, in violation of” the California laws.
The insurers denied all allegations in the lawsuits, according to court filings. In July, Judge P. Casey Pitts granted a partial summary judgment dismissing several claims central to the lawsuits.
Pitts set a schedule last month that calls for a trial to conclude in mid-December 2026. According to the schedule, the plaintiffs and defendants are to spend the initial months of 2025 in mediation talks.
Marketing to teachers
The initial lawsuit describes robust sales of financial products marketed to California’s more than 300,000 public school teachers. Federal law permits public schools and non-profits to offer employees tax-advantaged employer-sponsored retirement plans known as 403(b) plans. For many years, vendors did not have to fully disclose the fees associated with plan options, the lawsuit states.
“As a result of insurance companies’ aggressive marketing tactics and incomplete disclosures, teachers were often funneled into indexed annuities that came with high fees and low returns while providing huge profits for the insurance companies peddling them,” the LICS complaint says.
In 2002, the California Legislature passed a bill that included the creation of the website 403bcompare.com. The impartial website provides full product and fee information to help employees decide.
The plaintiffs alleged that Life Insurance Company of the Southwest is a habitual violator of the disclosure law. They claim the insurer’s fees average over 3.4% per year since 2019—and that its sales agents are among the highest paid, earning commissions between 8% and 10%.
“All of which have resulted in Defendant’s customers seeing some of the state’s lowest returns on their investments,” the lawsuit states. “Fees this high are disastrous for teachers trying to save for retirement, cutting their nest egg nearly in half by the time of their retirement.”
Partial summary judgment
Plaintiffs claimed that the use of participation rates, caps, and spreads unfairly masked the true cost of the annuity products. Most plaintiffs purchased the LICS’s SecurePlus fixed indexed annuity, which yielded far less return than advertised due to these adjustments, the lawsuit explains.
Judge Pitts rejected these claims and sided with the insurer.
“Parameters like cap, spread, and participation rates are a key feature of deferred indexed annuities, and it is hard to see how a customer could make an informed decision about purchasing a deferred indexed annuity without understanding what those rates were and how they were likely to change,” Pitts writes. “But because the statutory text of [California law] does not impose such a requirement, plaintiffs’ policy arguments must be directed to the California Legislature.”
But the judge allowed a claim of “undisclosed rider fees” to proceed. Plaintiff Danielle Krimbow paid for a guaranteed lifetime income rider and claimed that the plan’s 403bCompare.com listing stated that the rider fee would range from 0.65% to 0.75% of the account balance, the complaint says.
However, the insurer actually charged a fee of 0.90% for the rider.
“If a fee is not disclosed on 403bCompare.com, a vendor may not charge it,” Pitts writes. “If [the plaintiff] paid a fee that LICS was not entitled to charge, this is an economic injury that provides standing to pursue her … claim whether or not the fee was disclosed elsewhere.”
The lawsuit was consolidated with two similar claims:
Plaintiff Barry Blisten claims North American charged a 1.5% “strategy fee” rider, a fee that “was not disclosed on 403bCompare.com,” court documents say.
Plaintiff Veronica L. Taylor claims that Midland National offered the “Retire X-Cel Rider,” a guaranteed minimum withdrawal benefit. “This rider, which carried an annual charge of 0.95%, was in no way disclosed on the website,” court documents say.
Utah Insurance Commissioner Jonathan T. Pike signed an order Monday barring Sentinel Security Life Insurance Co. from writing new business in the state after Dec. 31.
The insurer is in such poor shape financially, Utah regulators say, that it is using new premium to meet ongoing financial obligations as they come due.
The order also covers two associated reinsurance companies: Haymarket Insurance Co. and Jazz Reinsurance Co. The three companies share the same Salt Lake City address and are owned by Advantage Capital Partners, known as A-Cap.
According to Utah examiners, the three insurers “are in a Hazardous Financial Condition and that such condition presents an immediate and significant danger to the public health, safety, or welfare, and that immediate action is necessary and in the public interest.”
A spokesperson for A-Cap released this statement Wednesday:
“A-CAP vigorously disputes the flawed valuation conducted by an unqualified firm. A-CAP stands by its valuation work, which was validated by two highly qualified and independent valuation firms, and is challenging the Order to protect its policyholders, its investors, and the interests of the broader aviation leasing industry participants.”
It has been a difficult year for the group’s insurers.
According to reporting by Semafor, A-Cap sold blocks of life policies to 777’s reinsurance arm, while separately loaning hundreds of millions to 777 Partners itself and various portfolio companies.
In a May lawsuit, Leadenhall Capital Partners, a London-based asset manager, claimed that it provided 777 Partners with more than $600 million in financing. Leadenhall said it later learned that roughly $350 million in assets serving as collateral for the loans either were not in 777’s control or had already been pledged to other lenders.
A-Cap is also named as a defendant, with the firm telling the New York Times that the claims are “baseless.”
Also in May, Sentinel Security and Atlantic Coast Life Insurance, another A-Cap insurer, sued to prevent AM Best from downgrading their financial strength ratings from B++ to B-. That lawsuit was later settled.
Examination irregularities
Pike ordered a “full-scope financial examination” of the insurance companies covering the years 2020 through 2023, the order states. An independent contractor performed the examination and found several problems, the order says:
More than 10% of the companies’ investments are in a single entity in violation of Utah code.
The companies’ risk-based capital ratio, a key indicator of financial health, has declined.
The companies’ investment portfolios included “a disproportionately large number of high-risk investments.”
The companies hold investments in more than thirty loans or loan packages.
The examiner hired Harvest Investments to value assets held by the A-Cap insurers, the order states. Harvest reviewed three specific loans or loan packages to Flair Airlines, PAC Wagon/Phoenix Aviation, and JARM.
All were deemed by Harvest to be worth well less than the internal valuations assigned by the insurers. Relying on the Harvest valuations, Utah examiners adjusted the “capital and surplus” of the three insurers to:
Sentinel Security: from $130,478,003 to ($143,106,666) Haymarket: from $63,471,407 to ($239,660,592) Jazz Re: from $3,083,242 to ($138,740,748)
“With negative capital and surplus in the hundreds of millions of dollars, the Companies’ admitted assets are less than their liabilities; and the Companies are using funds from new premiums and/or liquidating investments other than the impaired investments to pay their obligations as they become due,” the order says.
Small annuity player
During the third quarter, Sentinel Security had a market share of 0.39% in a $115 billion annuity market, according to Wink’s Sales & Market Report.
“This puts Sentinel Security Life in a precarious position,” said Sheryl Moore, CEO of Wink, Inc. and Moore Market Intelligence. “I’m curious to see what is in store for their contract holders.”
The examination of the A-Cap insurers “is ongoing,” Utah officials say.
UnitedHealthcare CEO Brian Thompson was shot and killed in midtown Manhattan on Wednesday morning, according to media reports.
The New York Times reports that Thompson was on his way to the UnitedHealthcare’s annual investor conference being held in the New York Hilton Hotel ballroom in Midtown Manhattan. The attack took place at about 6:45 a.m. as Thompson walked on Sixth Avenue near 54th Street.
A gunman waited for about 10 minutes before Thompson’s arrival, before opening fire from 20 feet away shooting multiple times, striking Thompson in the chest, according to a CNN report.
Thompson, 50, was named CEO for UnitedHealthcare in April 2021. Prior to taking that role, he served as CEO of UnitedHealthcare government programs, including Medicare & Retirement and Community & State. Before leading government programs, Thompson served as CEO of UnitedHealthcare Medicare & Retirement.
Thompson joined UnitedHealth Group in 2004 and has held numerous leadership positions including chief financial officer for UnitedHealthcare’s Employer & Individual, Community & State and Medicare & Retirement businesses. In addition, Thompson has served as the financial controller for UnitedHealthcare’s Employer & Individual business and a director in Corporate Development.
New York’s police commissioner, Jessica Tisch, and Jeffrey Maddrey, chief of department, will hold a news conference at 1 Police Plaza at 11:30 a.m., the police said.
While a recent study credits employers for helping improve workers’ financial health this year, financial advisors also can assist clients in improving their financial stability, according to Marci Stewart, director of Client Experience at Schwab Workplace Financial Services.
“While the markets have generally performed well this year, inflation and economic conditions have continued to put pressure on workers’ finances at elevated levels,” said Lee McAdoo, managing director of Schwab Retirement Plan Services. “In the face of external economic factors, employers are supporting their employees with a combination of direct financial assistance and accompanying resources to help them manage financial stress and overall well-being.”
Sixty-four percent of the workers surveyed said their employers have taken action to help them manage financial stress, compared to 52% who said the same last year, according to Charles Schwab’s 2024 401(k) Participant Study. The table below shows the various actions taken by employers:
Source: Charles Schwab
Despite those steps, many continue to feel stressed.
While more workers are feeling good about their financial health (24%) compared to last year (20%), many continue to feel stressed, according to the survey. About half of those surveyed said their financial health has not changed, and one in five said it has worsened. Gen Z (37%) and Millennials (35%) are more likely than Gen X (28%) and Boomers (21%) to say that their financial health has improved.
The potential of SECURE 2.0
As workers make use of the resources offered to help manage their financial wellness, the survey noted that nearly one in three of them (32%) would like help in understanding how new regulatory and legislative changes, like the SECURE 2.0 Act, affect their retirement plan.
SECURE 2.0 provides many changes that could help strengthen the retirement system and enhance Americans’ financial readiness for retirement. The law builds on an earlier piece of legislation that increased the age when retirees must take required minimum distributions (RMDs) and allowed workplace saving plans to offer annuities, capping years of discussions that were aimed at bolstering retirement savings through employer plans and Individual Retirement Accounts (IRAs).
As employers have started to adopt SECURE 2.0 provisions, more workers have become attuned to the benefits that could help them manage their finances, the survey pointed out. The most pronounced interest of workers attempting to achieve financial stability is in the federal government’s plan to make matching contributions to workers’ retirement accounts, based on their income.
SECURE 2.0 has great potential to help participants prepare better for retirement, said Stewart, in explaining some of the key benefits of SECURE 2.0.
According to Stewart, some of the sections that 401(k) savers are the most interested in creating financial stability include:
The “Savers Match” government matching contribution to an IRA or a 401(k) plan
Easier 401(k) withdrawals for emergency expenses
Employer contributions as Roth
The ability to set up an emergency savings account at work
The increased contribution maximum for those who are ages 60 – 63
Helping clients understand SECURE 2.0
So, what can registered investment advisors do to help their clients understand the provisions of SECURE 2.0 that would help them move closer to achieving their retirement goals?
“Our survey shows that awareness of SECURE 2.0 is up, but there may be a gap in knowledge about how the provisions can support individuals’ retirement goals,” Stewart said. “Financial advisors can have personalized discussions with their clients based on their financial needs and determine which SECURE 2.0 provisions may be offered through their clients’ workplace plans.
For example, Stewart pointed out, advisors might provide more education and guidance around the increased 401(k) catch-up contribution maximum for workers ages 60 – 63, which could help eligible participants increase their 401(k) savings levels.
The online survey of 1,000 U.S. 401(k) plan participants was conducted by Logica Research between April 17 and May 3, 2024. Survey respondents were actively employed by companies with at least 25 employees, were 401(k) plan participants and were 21-70 years old. To analyze Gen Z results against other generations, an additional 100 plan participants aged 21 to 27 completed the survey. Survey respondents include participants served by approximately 15 retirement plan providers.
Excitement and conjecture are echoing in the halls of power in Washington as the new presidential term begins. The administration’s plans for the financial services sector over the next four years will soon be revealed with the announcement of key appointments across financial regulatory organizations. During a recent debate on Capitol Hill, politicians and industry insiders discussed the consequences.
Quick nominations and confirmations are crucial, according to Kevin Edgar, former chief counsel on the house committee on financial services and a parter of government policy at the Washington D. C law firm BakerHostetler. “The earlier you can get someone nominated, the earlier you can get them confirmed, and then the earlier they can get to work,” he said.
In contrast to lengthier procedures in earlier transitions, Edgar emphasized the new administration’s vigorous drive to fill important positions in the financial sector. For instance, Jay Clayton was legally nominated on Inauguration Day but was not appointed SEC Chair during President Trump’s first term until January 4, 2017. We might see their names much sooner this time, he said.
Reasons for urgency
The need to assess the regulatory environment of the previous four years, establish new goals, and deal with impending legislative deadlines are some of the reasons for the urgency. Interest has been aroused by the appointment of Treasury Secretary nominee Scott Besson, whose relationship with the president is still unknown.
“It’s uncertain what their relationship is,” Edgar said. “But this choice will undoubtedly influence subsequent nominations, especially for independent agencies like the SEC, CFPB, and FDIC.”
Former congressman Peter Roskam, and leader of the federal policy team at BakerHostetler, called attention to a notable change in the president’s appointment-making process, including those for positions impacting the financial sector.
“Unlike his first term, these are individuals with whom the president has personal connections and confidence,” he said. Given the president’s background in finance, Roskam pointed out that this change may affect the focus of financial policy.
Growing populist attitudes
The dynamics of the GOP are changing at the legislative level. Edgar brought attention to the party’s growing populist attitudes, which may have an impact on financial supervision. “The GOP is no longer just the Wall Street Journal editorial page,” he said. This attitude might encourage support for local firms and community banks while raising questions about big financial institutions.
Addressing regulatory priorities and vacancies impacting the financial sector will be crucial in the coming months. Given the commission’s vacancies and Gary Gensler’s imminent resignation as SEC Chair, nominations will be made right away. According to Edgar, acting chairs often refocus agency priorities. According to him, “An acting chair can redirect staff to projects or provide clearer guidance,” underscoring the possibility of a policy change.
Furthermore, the Congressional Review Act (CRA) is a potent instrument for repealing late-term rules from the previous government. Edgar, who previously oversaw CRA motions, highlighted the importance of the procedure: “If Congress disapproves a rule, agencies must propose a substantially different version—no minor tweaks allowed.”
Edgar also mentioned the new administration’s possible financial sector regulatory relief, especially for small enterprises. “There will be a focus on modernizing securities laws to facilitate capital formation for small companies,” he said. He did, however, stress that crucial protections, like as laws against money laundering, will not change. “Rules that preserve financial system integrity aren’t on the chopping block.”
‘Tax Armageddon’
“Tax Armageddon,” the impending expiration of important tax laws in 2025, heightens the necessity of Treasury appointments. Roskam emphasized the administration’s pressure to take decisive action by highlighting campaign pledges to refrain from taxing Social Security, tips, and other items. Edgar foresaw a busy Senate Finance Committee: “You want core cabinet members confirmed in that first week to address pressing tax and financial issues.”
Edgar warned against being overconfident, even though the policies of the new administration might present chances for development. He cautioned, “Letters will come,” alluding to possible investigations by congressional oversight organizations. Aggressive supervision will continue under leaders like Rep. Maxine Waters and Sen. Elizabeth Warren, the next ranking member of the Banking Committee. “There will be dueling oversight—examining both the private sector and the administration’s actions.”
The Financial Stability Oversight Council’s (FSOC) contentious designation of non-bank businesses as systemically important may be revisited by lawmakers in addition to ongoing probes. Edgar proposed that this strategy be put on hold. “This administration is unlikely to favor adding more government oversight onto businesses,” he said.
The financial services industry is at a turning point. Oversight and scrutiny will continue even when legislative goals and regulatory recalibrations may create opportunities. “It’s not open field running.” Edgar summed up the sector’s issue in this way: “The industry must remain vigilant against inquiries and regulatory pivots.”
Stakeholders in the financial services industry will have to negotiate a changing environment characterized by opportunity, oversight, and reform as the Senate gets ready for a frenzy of confirmation hearings and legislative activity in the next year. The scramble to adapt is already underway for both corporate executives and Washington insiders.
Medicaid expenditures continue to rise as a percentage of total state spending, and much of that goes toward long-term care.
In some states, Medicaid spending already has reached 40% of total state spending. A study conducted for the Minnesota Department of Human Services projected Medicaid expenditures for long-term care would increase 70% between 2023 and 2035.
With an increasing number of Americans needing care, states are looking at how they can mitigate these costs without any significant federal action. Roger Moore, policy director with the National Association of Insurance and Financial Advisors, gave a rundown of how the states are looking at funding long-term care during NAIFA’s Peak 65 Impact Day.
Washington state’s long-term care program
Washington state enacted the nation’s first state-run, statewide long-term care benefit program, known as WA Cares. WA Cares provides a lifetime maximum benefit of $36,500, adjusted annually for inflation, which will be available beginning July 2026.
WA Cares is funded by a mandatory 0.58% payroll tax from all workers in the state, which began in July 2023, with certain exemptions allowed. A worker in Washington must contribute to the fund for 10 years before accessing WA Cares benefits.
In 2024, the state legislature passed a bill that would enable those who contribute to WA Cares but move out of state to access benefits.
In November, voters were given the opportunity to vote on Ballot Initiative 2124, which would have given workers the option to opt out of the mandatory payroll tax that funds WA Cares, which supporters of Washington Cares said would have led to the demise of the program. The initiative did not pass.
California looks at feasibility
In 2023, California’s Long-Term Care Insurance Taskforce considered the feasibility of establishing a program similar to WA Cares. The taskforce provided benefit options ranging from $36,000 to $144,000, with contribution rates between 0.6% and 3%.
The panel submitted findings to the California Department of Insurance in December 2023, although lawmakers have yet to come to a decision.
Minnesota eyes solutions
In 2023, Minnesota’s LTSS Funding and Services Initiative Study offered three possible solutions to address the state’s long-term care needs: care navigation and support services, a Medicare companion product, and an obligatory state insurance program. Minnesota has not taken any action toward a statewide LTC program.
“Ultimately, the problem is that funding long-term care is a big ask,” Moore said. “If you’re developing these big state programs, there’s concern over whether people want it, whether they will vote for it and how much will it cost.
“States have considered it but except for Washington, we haven’t seen anyone take that big dive yet.”
Indexed life and annuity products are the subject of many regulator meetings and class-action lawsuits. Despite that negative publicity, indexed life and annuity sales are booming.
Wink, Inc. reported third-quarter annuity sales of $115.2 billion, up 6.6% compared to the previous quarter. All annuities include the multi-year guaranteed annuity, traditional fixed annuity, indexed annuity, structured annuity, variable annuity, immediate income and deferred income annuity product lines.
On the life insurance side, indexed products were a lone bright spot, Wink reported. All universal life sales for the third quarter were more than $1.1 billion, down 0.5% compared to the previous quarter. All universal life sales include fixed UL, indexed UL, and variable UL product sales.
The annuity story
Noteworthy highlights for all annuity sales in the third quarter include Athene USA ranking as the No. 1 carrier overall for annuity sales, with a market share of 8.1%. Massachusetts Mutual Life Companies came in second place, while Allianz Life, Corebridge Financial, and Jackson National Life rounded out the top five carriers in the market, respectively.
Courtesy of Wink, Inc.
Total third-quarter sales for all deferred annuities were $110.9 billion, up 6% compared to the previous quarter and up 40% compared to the same period last year. All deferred annuities include the multi-year guaranteed annuity, traditional fixed, indexed annuity, structured annuity and variable annuity product lines.
Noteworthy highlights for all deferred annuity sales in the third quarter include Athene USA ranking as the No. 1 carrier overall for deferred annuity sales, with a market share of 8.4%. Massachusetts Mutual Life Companies continued in the second-ranked position, while Allianz Life, Corebridge Financial, and Equitable Financial completed the top five carriers in the market, respectively. Massachusetts Mutual Life’s Stable Voyage 3-Year, a MYG annuity, was the No. 1 selling deferred annuity, for all channels combined, in overall sales for the second consecutive quarter.
Courtesy of Wink, Inc.
Total third quarter non-variable deferred annuity sales were $79.7 billion, up 8.2% compared to the previous quarter and up 45.5% compared to the same period last year. Non-variable deferred annuities include the MYG annuity, traditional fixed annuity, and indexed annuity product lines.
Noteworthy highlights for non-variable deferred annuity sales in the third quarter include Athene USA ranking as the No. 1 carrier overall for non-variable deferred annuity sales, with a market share of 11.3%. Massachusetts Mutual Life Companies continued in the second-ranked position, while Corebridge Financial, Allianz Life, and Global Atlantic Financial Group completed the top five carriers in the market, respectively.
Massachusetts Mutual Life’s Stable Voyage 3-Year, a MYG annuity was the No. 1 selling non-variable deferred annuity for the quarter, for all channels combined, in overall sales for the second consecutive quarter.
Courtesy of Wink, Inc.
Total third-quarter variable deferred annuity sales were $31.2 billion, up 0.7% compared to the previous quarter and up 27.7% compared to the same period last year. Variable deferred annuities include structured annuity and variable annuity product lines.
Noteworthy highlights for variable deferred annuity sales in the third quarter include Equitable Financial ranking as the No. 1 carrier overall for variable deferred annuity sales, with a market share of 18.3%. Jackson National Life continued in the second-place position, as Lincoln National Life, Allianz Life, and Prudential concluded as the top five carriers in the market, respectively. Equitable Financial’s Structured Capital Strategies Plus 21, a structured annuity, was the No. 1 selling variable deferred annuity, for all channels combined, in overall for the second consecutive quarter.
Courtesy of Wink, Inc.
Total third quarter income annuity sales were $4.3 billion, up 27.4% compared to the previous quarter. Income annuities include immediate income annuity (SPIA) and deferred income annuity product lines.
Noteworthy highlights for income annuity sales in the third quarter include New York Life ranking as the No. 1 carrier overall for income annuity sales, with a market share of 36.1%. Massachusetts Mutual Life Companies moved into second-ranked position, as Nationwide, Western-Southern Life Assurance Company, and Penn Mutual concluded the top five carriers in the market, respectively.
Courtesy of Wink, Inc.
Multi-year guaranteed annuity sales in the third quarter were $42.4 billion, up 3.3% compared to the previous quarter, and up 36.9% compared to the same period, last year. MYGAs have a fixed rate that is guaranteed for more than one year.
Noteworthy highlights for MYGAs in the third quarter include Massachusetts Mutual Life Companies ranking as the No. 1 carrier, with a market share of 14.2%. Athene USA continued in the second-ranked position, while Corebridge Financial, New York Life and Global Atlantic Financial Group rounded out the top five carriers in the market, respectively. Massachusetts Mutual Life’s Stable Voyage 3-Year product was the No. 1 selling multi-year guaranteed annuity, for all channels combined, for the second consecutive quarter.
Courtesy of WInk, Inc.
Traditional fixed annuity sales in the third quarter were $516.7 million, up 2% compared to the previous quarter, and up 4.2% compared to the same period last year. Traditional fixed annuities have a fixed rate that is guaranteed for one year only.
Noteworthy highlights for traditional fixed annuities in the third quarter include Global Atlantic Financial Group ranking as the No. 1 carrier in fixed annuities, with a market share of 15.7%. CNO Companies ranked second, while Modern Woodmen of America, CL Life and EquiTrust completed the top five carriers in the market, respectively. Forethought Life’s ForeCare Fixed Annuity was the No. 1 selling fixed annuity, for all channels combined, for the seventeenth consecutive quarter.
Courtesy of Wink, Inc.
Indexed annuity sales for the third quarter were $36.8 billion; sales were up 14.6% compared to the previous quarter, and up 57.8% compared to the same period last year. Indexed annuities have a floor of no less than zero percent and limited excess interest that is determined by the performance of an external index, such as Standard and Poor’s 500. This was a record-setting quarter for indexed annuity sales, topping the second-quarter 2024 record by 14.6%.
Noteworthy highlights for indexed annuities in the third quarter include Allianz Life ranking as the No. 1 seller of indexed annuities, with a market share of 13%. Sammons Financial Companies ranked second, while Athene USA, Corebridge Financial, and Global Atlantic Financial Group completed the top five carriers in the market, respectively. Allianz Life’s Allianz Benefit Control Annuity was the No. 1 selling indexed annuity, for all channels combined, for the quarter.
Sheryl Moore, CEO of both Wink, Inc., and Moore Market Intelligence, said, “It was another record-setting quarter for indexed annuity sales. Already YTD sales have nearly beat out the full year 2023’s results.”
Courtesy of Wink, Inc.
Structured annuity sales in the third quarter were $16.1 billion, up 2.8% compared to the previous quarter, and up 33.1% compared to the year-ago quarter. Structured annuities have a limited negative floor and limited excess interest that is determined by the performance of an external index or subaccounts. This was a record-setting quarter for structured annuity sales, topping the second quarter 2024 record by 2.8%.
Noteworthy highlights for structured annuities in the third quarter include Equitable Financial ranking as the No. 1 carrier in structured annuity sales, with a market share of 22.5%. Allianz Life ranked second, while Prudential, Brighthouse Financial, and Jackson National Life completed the top five carriers in the market, respectively. Equitable Financial’s Structured Capital Strategies Plus 21 was the No. 1 selling structured annuity, for all channels combined, for the second consecutive quarter.
“Structured annuity sales YTD have already eclipsed total 2023 results,” Moore said. “It appears that VAs are losing market share to their indexed brethren.”
Courtesy of Wink, Inc.
Variable annuity sales in the third quarter were $15.1 billion, down 1.4% compared to the previous quarter, and up 22.3% compared to the same period last year. Variable annuities have no floor, and the potential for gains/losses is determined by the performance of subaccounts that may be invested in an external index, stocks, bonds, commodities, or other investments.
Noteworthy highlights for variable annuities in the third quarter include Jackson National Life ranking as the No. 1 carrier in variable annuities, with a market share of 17.1%. Equitable Financial ranked second, while Nationwide, New York Life, and Lincoln National Life finished as the top five carriers in the market, respectively. Jackson National’s Perspective II Flexible Premium Variable & Fixed Deferred Annuity was the No. 1 selling variable annuity for the twenty-second consecutive quarter, for all channels combined.
“The steady increase in the market has lent to stronger VA sales, but structured annuities will likely continue to rule the variable subset,” explained Moore.
Courtesy of Wink, Inc.
Immediate income annuity (Single Premium Immediate Annuity) sales in the third quarter were $3.1 billion; up 21.8% compared to the previous quarter.
Noteworthy highlights for immediate income annuities in the third quarter include New York Life ranking as the No. 1 carrier in immediate income annuities, with a market share of 32.9%. Massachusetts Mutual Life Companies ranked second, while Nationwide, Western-Southern Life Assurance Company, and Penn Mutual finished as the top five carriers in the market, respectively.
Courtesy of Wink, Inc.
Deferred income annuity sales in the third quarter were $1.2 billion; up 44.6% compared to the previous quarter.
Noteworthy highlights for deferred income annuities in the third quarter include New York Life ranking as the No. 1 carrier in deferred income annuities, with a market share of 44.5%. Massachusetts Mutual Life Companies ranked second, as Western-Southern Life Assurance Company, Integrity Life Companies, and Corebridge Financial finished as the top five carriers in the market, respectively.
Courtesy of Wink, Inc.
The life story
Noteworthy highlights for total all universal life sales in the third quarter included National Life Group ranking as No. 1 in overall sales for all universal life sales, with a market share of 10.9%. Transamerica Life’s Transamerica Financial Foundation IUL was the No. 1 selling product for all universal life sales, for all channels combined, for the third consecutive quarter.
Courtesy of Wink, Inc.
Non-variable universal life sales for the third quarter were $847.8 million; sales remained flat when compared to the previous quarter and up 9.5% compared to the same period last year. Non-variable universal life sales include both indexed UL and fixed UL product sales.
Noteworthy highlights for total non-variable universal life sales in the third quarter included National Life Group retaining the No. 1 overall sales ranking for non-variable universal life sales, with a market share of 14.6%. Transamerica Life’s Transamerica Financial Foundation IUL was the No. 1 selling product for non-variable universal life sales, for all channels combined, for the fourteenth consecutive quarter.
Courtesy of Wink, Inc.
Fixed UL sales for the third quarter were $100 million, down 0.5% compared to the previous quarter and up 15.2% compared to the same period last year.
Items of interest in the fixed UL market included Nationwide retaining their No. 1 ranking in fixed universal life sales, with a 16.7% market share, John Hancock, Pacific Life Companies, Protective Life Companies, and Prudential completed the top five, respectively.
Pacific Life’s Pacific Life Promise GUL was the No. 1 selling fixed universal life insurance product, for all channels combined for the quarter. The top primary pricing objective of No Lapse Guarantee captured 39.5% of sales. The average fixed UL target premium for the quarter was $7,757, an increase of nearly 13% from the prior quarter.
“The second quarter was a strong quarter for life insurance sales,” Moore said, “so sales being flat this quarter isn’t such a surprise.”
Courtesy of Wink, Inc.
Indexed life sales for the third quarter were $748.8 million, up 0.2% compared with the previous quarter, and up 8.9% compared to the same period last year. Indexed life sales include both indexed UL and indexed whole life.
Items of interest in the indexed life market included National Life Group keeping their No. 1 ranking in indexed life sales, with a 16.4% market share, Transamerica, Pacific Life Companies, Nationwide, and Lincoln National Life rounded-out the top five, respectively.
Transamerica Life’s Transamerica Financial Foundation IUL was the No. 1 selling indexed life insurance product, for all channels combined, for the fourteenth consecutive quarter. The top primary pricing objective for sales this quarter was Cash Accumulation, capturing 71.7% of sales. The average indexed life target premium for the quarter was $13,156, an increase of 22% from the prior quarter.
“Indexed life was the only line of business which experienced an increase in sales from last quarter,” commented Moore. “And sales were only up 0.2%.”
Courtesy of Wink, Inc.
Variable Universal Life sales for the third quarter were $284.7 million, down 2.3% compared with the previous quarter.
Items of interest in the variable universal life market included Prudential retaining the No. 1 ranking in variable universal life sales, with a 34.3% market share, Pacific Life Companies, RiverSource Life, John Hancock and Nationwide completed the top five, respectively.
Pruco Life’s VUL Protector was the No. 1 selling variable universal life insurance product, for all channels combined for the third consecutive quarter. The top primary pricing objective for sales this quarter was Cash Accumulation, capturing 54.5% of sales. The average variable universal life target premium for the quarter was $20,001, a decline of nearly 2% from the prior quarter.
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Whole life third quarter sales were $1 billion, down 6.7% compared with the previous quarter, and down 0.8% compared to the same period last year. Items of interest in the whole life market included the top primary pricing objective of final expense capturing 56.1% of sales. The average premium per whole life policy for the quarter was $3,655, an increase of more than 4% from the prior quarter.
Courtesy of Wink, Inc.
Term life third quarter sales were $602.3 million; down 7.4% compared with the previous quarter.
Items of interest in the term life market included Prudential ranking as No. 1 in term life sales, with a 5.4% market share. Pacific Life Companies, Corebridge Financial, Protective Life Companies and Massachusetts Mutual Life Companies rounded the top five, respectively.
Pruco Life’s Term Essential 10 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 $2,412, a decline of more than 19% from the previous quarter.
Courtesy of WInk, Inc.
Wink now reports on all annuity and life insurance lines of business.
