Articles
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1 month ago |
retirementincomejournal.com | Kerry Pechter
Two RIJ subscribers have written separate, open letters to the National Association of Insurance Commissioners (NAIC), calling for a faster, more energetic regulatory response to ongoing life/annuity industry practices—especially the use of offshore reinsurance for capital-reduction reasons—that they believe will harm the interests of insurance policyholders and annuity contract owners.
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2 months ago |
retirementincomejournal.com | Kerry Pechter
Last week the Financial Times reported: “Brighthouse Financial is seeking to sell itself, with some of the most prominent private capital managers expected to make bids for the US provider of life insurance and annuities.”Though the report was not confirmed by Brighthouse management, the FT story moved the market. Stock investors seized on the rumor of an acquisition, driving up the price of Brighthouse shares by 20% to $62, its highest level since 2018.
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2 months ago |
retirementincomejournal.com | Kerry Pechter
Lots of new 401(k) annuity products are being pitched to plan sponsors and their advisors these days. There are in-plan and out-of-plan annuities, deferred and immediate annuities, as well as variable, fixed, and fixed indexed annuities. It’s hard to make sense of their differences. Cannex, the annuity data and analysis firm, recently made the selection process a bit more rational.
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2 months ago |
retirementincomejournal.com | Kerry Pechter
Taking a page from the pension risk transfer (PRT) business, Agilis, an actuarial/risk management firm, and Alight, the jumbo-plan 401(k) recordkeeper, have rolled out what appears to be a new way to market annuities to participants in defined contribution plans. Their product is called PensionBuilder (not to be confused with Principal Financial’s Pension Builder 401(k) annuity).
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2 months ago |
retirementincomejournal.com | Kerry Pechter
“Flow reinsurance,” a type of reinsurance that’s increasingly used by U.S. annuity issuers to manage their capital requirements, reminds me of mortgage lenders’ “originate-to-distribute” model that helped lead to the Great Recession of 2008. That may sound like a rash assertion, but those who take an interest in the Bermuda Triangle strategy might want to consider it.
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For more info, go to https://t.co/tlKHEDM2pr, and search for stories about "Bermuda Triangle."
These strategies are sometimes executed by unaffiliated insurers, reinsurers and asset managers. But sometimes they are affiliated, which reduces transparency and makes some people nervous about the quantity and quality of unseen assets backing their liabilities.
Chuck and I talked about my articles on the "Bermuda Triangle Strategy." That's what I call the three-way strategy by which life insurers, partnering with reinsurers and asset management firms, are reducing their capital requirements and increasing their investment returns.