In late summer, the LIMRA Secure Retirement Institute released several startling facts about the annuities market:

1. Total sales in the second quarter had jumped to a level not seen since the first quarter of 2015—they were nearly $60 billion, a 10% increase from the second quarter a year earlier and 15% more than in the preceding quarter.

2. Of that, fixed annuities were dominant, outpacing sales of variable annuities (VAs) by nearly 27%.

3. Within fixed annuities, fixed-index annuities (FIAs) posted quarterly sales that surpassed the previous record by 12 percentage points—they were nearly $18 billion in the second quarter, a jump of 17% from the corresponding period a year earlier and 21% from the preceding quarter.

4. Perhaps most surprising of all, after 17 consecutive quarters of sales declines, variable annuity sales rose 2% to nearly $26 billion in the quarter.

“This is the first time in more than four years that quarterly VA sales have increased,” says Todd Giesing, the LIMRA Secure Retirement Institute’s annuity research director.

The Effect Of Vacating The DOL Rule

While it’s only a 2% jump in VA sales, the turnaround can at least partially be attributed to the end of the Department of Labor’s fiduciary ruling. The Obama-era ruling, intended to protect consumers by eliminating conflicts of interest among broker-dealers and ensuring full disclosure of fees, was officially “vacated” by an appellate court in June. It had effectively challenged many insurers’ distribution models, favoring fees over commissions, but was widely considered unclear in many aspects.

The impact of its demise can’t be overstated, Giesing insists. “It’s a key component to the rise in sales for both fixed and variable annuities,” he says. The regulation, he goes on, was “lengthy, vague and up for interpretation. … But now that the uncertainty is out, some of the pent-up demand is coming back into the market.”

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