Happy Thanksgiving – Celebrating With an Eye Toward the Season Ahead
Happy Thanksgiving from all of us at InsuranceNewsNet. Not to sound too corny, but we’re thankful you value this site enough to visit.
As we take this break, we’ll also be thinking about what’s to come over the next few months and in 2010. These are historic times that will yield a definite pre- and post-Great Recession world.
Here are two key items coming up:
HEALTH REFORM: A given, obviously. And, yes, even our eyes glaze over at the words but things are moving fast although it might not seem like it. Deals are being made behind the scenes and bargaining chips are crossing the table. Count on the public option being one of them. It might not disappear but the government plan will be dull of tooth when finally unleashed on the world. Many health and benefits producers we talk to are not worried. They know they are the trusted advisors their clients need. Confusing federal bureaucracy? Bring it on. Clarity is their business.
FIDUCIARY RESPONSIBILITY: Many of the developments in legislative and regulatory reform have trapdoors for insurance producers – and have advocates very concerned. There is the Investor Protection Act, which Rep. Paul Kanjorski, D-Pa., proposed. It would hold insurance producers who sold variable annuities to the same standard as the federally regulated registered investment advisor. Some fear that insurance producers would no longer be allowed to tailor a solution for a client, but would have to present a variety of options equally for clients to consider. That’s all well and good for investment advisors, but as we said earlier, clarity is the producer’s business. In the bewildering world of financial products, a producer shows a hectic business owner or busy family breadwinner the way to protect the people and livelihood they value.
That’s one item on the legislative side. There’s also the Office for Insurance, or whatever the latest name is. This office, proposed by Kanjorski and others, would finally bring a national stature to insurance, proponents say. Opponents say the pre-emption power and other aspects of this new bureaucracy crack the door to federal regulation. Again, some say that is a good thing, but others say that changes the close-to-the-consumer nature of insurance sales.
The regulatory side is also interesting. Rule 151A will probably rattle around for a while. The latest on the Securities and Exchange Commission’s bid to regulate indexed annuities is Old Mutual’s motion in the lawsuit that got the rule kicked back to the SEC. The SEC has dithered on technicalities the court required and now judges are considering other options, including shelving it altogether.
SOURCE OF FUNDS: But other regulatory movements are under foot. One that has some wholesalers concerned is source of funds, which the federal regulators and the National Association of Insurance Commissioners are discussing. The concern is that the standard would mean if a client bought a annuity with funds from an investment or a reverse mortgage, the producer would have to be licensed in the field from which the funding came. This is another area creating a lot of noise behind the scenes.
We don’t mention these things to cloud your Thanksgiving. This industry has much to be thankful for. Sales in many areas are slowing growing (some meteorically, actually) and companies are regaining their health. Producers are still the bedrock advisors for clients – Come what may.
