Annuity FYI Visitor Blog

Fidelity Investment Life Insurance Company and its subsidiary, Empire Fidelity Investments Life Insurance Company have maintained their A+ financial strength rating with A.M. Best.  This information is from a press release by A.M. Best.  The superior strength rating and good issuer credit ratings are great news and mean that the company has continued earnings growth over the past five years, through a tumultuous market.

This is how A.M. Best says that Fidelity held strong in the industry:  “strong risk-adjusted capitalization, generally positive statutory and GAAP earnings, its focus on high credit quality and liquidity within its investment portfolio, prudent enterprise risk management practices and the competitive advantages it is afforded in marketing its life insurance and variable annuity products through the name recognition and branding of Fidelity Investments.”  Some moderate investment approaches helped Fidelity do better than its peers selling similar products.

Symetra Life Insurance Company is the latest provider of annuities to upgrade its options, according to “Symetra enhances its Freedom Income Annuity offering” on IFA web news.  With the Freedom Income Annuity offering, purchasers previously had to start their payments at age 70 when using tax-deferred money.  You are now able to use either qualified or non-qualified money and choose the age at which your payments will begin.  Purchasers can start payments up to the age of 94.  Like other annuities, you can still choose whether you will receive payments over a specified period of time or receive lifetime guaranteed income.  Symetra Life Insurance Company is based in Bellevue, Washington.

In “NAIC backs bill to reverse SEC’s Rule 151A annuities regulation” by Keith Martin, he states that the National Association of Insurance Commissioners does not agree with the Securities and Exchange Commission’s rule classifying indexed annuities as securities.  The article, from IFA web news, says that the NAIC supports the proposed Indexed Annuities and Insurance Products Classifications Act of 2009.  Two Representatives brought this Act about to overturn Rule 151A and resolve some issues unclear from the Securities Act of 1933.

The backing from NAIC’s CEO Therese Vaughan represents insurance regulators from the entire United States and its territories.  They believe that Rule 151A is needless and that it actually takes away from both the NAIC and the states’ work updating indexed annuities when issues arise.  Vaughan said that “Rule 151A ignores the fact that, at their core, indexed annuities are insurance products that guarantee purchasers’ principal and a minimum rate of return.”  She and the NAIC think that state regulators should maintain their ability to monitor indexed annuities and that there are many vague points that will hurt consumers’ security.

The Retirement Security Needs Lifetime Pay Act, or H.R. 2748, was introduced this week by Rep. Earl Pomeroy (D-N.D.) and Rep. Ginny Brown-Waite (R-FL).  This news comes from “Bill would let seniors take retirement funds through annuity” by Darla Mercado of InvestmentNews.  Basically, retirees could use part of their retirement savings to invest in an annuity with a significant tax benefit.  The Internal Revenue Code would be changed so that 50% of a non-qualified lifetime annuity would not be subject to taxes.  This benefit is good for up to $10,000 yearly income.  Since lifetime annuities are the only financial product that provide guaranteed lifetime income, they are crucial to retirement planning.  The proposed bill will now go to the House Ways and Means Committee and hopefully be passed into law.

American General Life Companies has brought back their Horizon Index Annuity, as stated in the company’s press release.  At the beginning of June it was reintroduced with higher premium bonuses and increased marketing for what AGLC believes is a crucial feature.  The overall benefits of an index annuity are that an investor has the potential to gain money based on the stock and bond market performance without losing their principal and they can take advantage of tax-deferred growth.  This last point is especially helpful for investors who have maxed out their 401(k) contributions.

The following improvements are what AGLC wants to highlight.  For their nine-year index annuity the bonus has doubled, going up to 4% from 2%.  There has also been a significant increase in the twelve-year annuity bonus, going up to 5% from 3%.  AGLC also wants to bring attention back to their “two-year, point-to-point crediting methodology”.  There is a 20 percent cap on this currently which really adds a lot of value and great opportunites to investors in today’s markets.  AGLC has brought back this index annuity because they believe it can be the best product for many current investors.