Jackson, the nation’s second-largest seller of individual annuities, halted sales shortly after the ruling and other insurers are reportedly planning to follow suit.
Some of Jackson’s fee-based products are made available to fiduciary advisors via DPL Financial Partners platform, said Lau.
“Advisors are, at least temporarily, winding up with fewer products—it’s really business as usual, just with fewer choices,” said Lau. “Jackson is a good partner of ours and we hate to see them out of the market, but we have 14 different carrier partners."
Berkowitz emphasized that the halted annuity sales are only a temporary measure.
Jackson National, the IRI, other annuity providers and other industry groups are currently engaging in talks with New York's Department of FInancial Services as well as other regulators to clarify the new rules.
"We don't anticipate this to be a long-term temporary situation," Berkowitz said. "We have reasons to believe this will be cleared up in the long term."
The rule is notable because it not only expands fiduciary requirements to include insurance brokers, but also encompasses all annuity and life insurance products. Individuals selling annuities or insurance products may not call themselves “financial planners” or “financial advisors” under the new rules unless they provide non-insurance financial services to their clients and have secured the licenses necessary to carry these titles.
In the case of a client dispute, failure to prove a recommendation is made in a client’s best interest would lead to a refund. Insurers must collect 13 specific pieces of personal information for each client before recommending a product, including age, income, goals and risk tolerance.
New York’s rule also requires advisors to discuss the negative elements, like surrender charges, of recommended insurance products.
Lau noted that New York’s stringent insurance rules had already led to fewer competitors and products in the marketplace.