April 2012
Focus On The Basics With Clients
Interest rates are rising fast!
Yes, this is an April Fools' Day joke. I can remember brokers telling me if rates would just get to 6 percent, then they could really sell some fixed annuities. Nowadays the magic number is 3 percent, a far cry from the glory days when 6 percent was the goal.
When you are an expert at selling fixed annuities, you occasionally forget the basic, important reasons why consumers buy them. The biggest reason is the safety of their principal, an extremely important feature in an interest environment where rates are forecasted by many economists and the Federal Reserve to remain low for an extended period and some fixed investments are crediting well below 1 percent.1
Interest rates go up and down but if you focus on the basics — the fundamental concept of protection of principal — it will resonate with your clients who are looking for a safe place for the conservative portion of their portfolio.
We're pleased to introduce a new fixed index annuity to the marketplace, the Index Select Annuity (ISA). Our newest addition provides the highest rate cap offered by Standard Insurance Company and joins a family of annuity products with competitive renewal rate histories.2 The other part just might be more basic: the ISA is a true fixed index annuity that delivers safety of principal. And that is no joke.
Rich Lane
Director, Sales & Marketing
1 March 13, 2012, monetary policy press release from the Board of Governors of the Federal Reserve System, http://www.federalreserve.gov/newsevents/press/monetary/20120313a.htm
2 Historical rates are not indicative of future results.
To Copy Or Not To Copy
Not surprisingly, annuity administration comes with documentation requirements. Most of the time, The Standard is able to accept a copy — whether faxed, submitted electronically or photocopied — of important documents. But there are circumstances where only an original ink document will do.
The 5498 Mailing Is Approaching
For each IRA held by The Standard with reportable contributions for tax year 2011, the Internal Revenue Service requires that Form 5498, IRA Contribution Information, be filed by May 31, 2012.
New Disclosures
New product disclosures will be available in May for The Standard's:
- Secured Rate Annuity
- Principal Growth Annuity
- Flexible Premium Deferred Annuity
- Immediate annuities
Our goal is to update these product disclosures to be consistent with those for our other products. Our updated disclosures, which will require signatures, are now in line with the NAIC Annuity Disclosure Model Regulation.
A 60-day grace period for signing will be allowed during this transition. We will highlight this topic again in our May edition of Annuity News.
Producer Advisories
Please review these recent compliance alerts.
Washington — Rules: 284-17-265 and 284-23-390: Suitability of Annuity Sales
Washington — Rule: 284-17-605: Use of Professional Designations and Senior-Specific Certifications
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