Re-Thinking Fixed Index Annuities

Fixed index annuities are terrific products. The potential for market-linked returns, coupled with principal protection, form the basis for a powerful set of features and benefits. The market has responded -- sales of FIAs have grown to more than $25 billion per year since their creation in 1995. But long-time producers of FIAs will recall that the product has always had its detractors and that the FIA industry has seen its fair share of bad press. Some of that criticism was deserved, but much of it has been due to fundamental misunderstandings related to how the product works and what it is designed to do. Moreover, the regulatory environment for FIA sales has become increasingly challenging since the NASD's Notice to Members 05-50 in August 2005 (the NASD is now FINRA), which required that member firms put special procedures in place concerning FIA sales, and the Securities and Exchange Commission's recent enactment of Rule 151A, which treats FIAs as securities, rather than as annuity contracts for purposes of securities regulation and producer licensing.

Re-Thinking Fixed Index Annuities
Source: Producers Web