Investment News‘s Darla Mercado summarizes her interview with the Insured Retirement Institute’s president and chief executive Cathy Weatherford in “Hurdles ahead for VA industry.” With advisers wary of the increased costs associated with variable annuities after the financial crisis and increasing regulations on insurance providers, there may be a challenging road ahead for variable annuities.
Products have been simplified in order to ensure that insurance companies are able to keep the guarantees that clients find valuable with annuities. While prices have increased from the “bargains” consumers were previously receiving, the new prices are fair for both consumers and the insurance companies. The biggest challenges Weatherford sees with advisers will be getting their time and overcoming any skepticism regarding the changes in variable annuities. It is also crucial for insurers and advisers to ensure suitability for the their clients through closely following FINRA’s regulations. In the upcoming year, Weatherford believes that suitability laws, rules, and regulations will be addressed even more on both state and federal levels to ensure the success of the variable annuity industry.