At least three insurers have now stopped offering some annuities in New York to comply with the state’s new regulations on the sales of the products, according to news reports.
Lincoln Financial and Penn Mutual Life Insurance suspended sales of some annuities in August to comply with New York State Department of Financial Services’ Regulation 187, which went into effect Aug. 1, InvestmentNews writes.
The rule requires financial entities selling annuities to take into account their clients’ best interest first, add new disclosures and implement training programs on selling the product.
Previously, InvestmentNews reported that Jackson National Life, the No. 3 annuity provider in New York, suspended sales of fee-based annuities in the state on Aug. 12.
Lincoln Financial, which is the No. 8 annuity provider in the state and No. 4 in the country, according to the National Association of Insurance Commissioners, suspended sales of fee-based annuities on Aug. 12 in light of the new rule and plans to extend the suspension to insurance products Feb. 1, according to InvestmentNews. As with Jackson National, Lincoln Financial expects the suspension to be temporary and will continue selling commission-based versions of the product, the publication writes.
"We are reviewing the regulation to analyze how Lincoln, our partners and advisers can best comply with disclosure requirements," Lincoln spokeswoman Amy Norcini tells InvestmentNews.
Penn Mutual, the No. 11 life insurance provider in New York and No. 32 in annuity sales, suspended sales of all annuities in the state effective Aug. 30 and plans to do so for life insurance products after Dec. 31, the publication writes.
But it too plans to restart selling the products eventually, with spokeswoman Lauren Kane telling InvestmentNews that the New York rule didn’t influence its decision.
"Like any business decision of this significance, we evaluated multiple factors to come to this conclusion, and we look forward to resuming sales in the future," she tells the publication.