Arrangements with individual broker-dealers "may differ due to a range of factors," she says. "While a vast majority of policies are unaffected, generally the changes made were to older generation products written prior to May 2010."
This, Doxsee explains, is part of a "strategic decision to focus [on] life insurance and disability income insurance." A few weeks earlier, the company announced it would no longer sell new annuity contracts and was laying off some 300 employees.
"It's not just a matter of not getting paid," says Mark Cortazzo, senior partner at MACRO Consulting Group in Parsippany, N.J. "We spend a six-figure sum each year to help clients understand what they own. If the executives at Ohio National want to save money, why don't they forgo their pay?"
Cortazzo pointed out that other companies "that were trying to de-risk their books" have offered clients "reasonable deals. [But] Ohio National isn't acting in the best interests of its policyholders," he contends.
Some caution this could be just the first domino. "Ohio National won't be the last company to do something like this," says Stan "The Annuity Man" Haithcock, of Ponte Vedra Beach, Fla. He adds that it's a shot across the bow for advisors and broker-dealers.
"Carriers view them as not needed in an Amazon direct-to-consumer sales world,” he says.
What happens next is anyone's guess.
"It certainly hurts Ohio National's sales of any other products if those selling them don't know if they'll get paid in the future," says Herbert Daroff, an attorney and certified financial planner at Baystate Financial in Boston. "The best outcome [would be] for another company to come in and buy the block of business. The buyer may not be able to amend the provisions of the contract that caused Ohio National to back out, but the annuities could be rescued."