Transamerica/Aegon has announced it will cease sales of fixed annuities through insurance brokers, starting Jan. 1.
The insurer made the announcement in an
Oct. 6 memo, which was obtained by
InvestmentNews. Transamerica cited the “persistently low interest rate environment” and “increasing regulatory challenges in the fixed annuity marketplace.”
Transamerica spokeswoman Cindy Nodorft said the carrier will continue to sell its fixed annuity products through banks and broker-dealers.
Transamerica said it must receive all signed applications and paperwork for 1035 exchanges or rollovers by Nov. 1; Dec. 22 is the last day on which policies can be issued in such cases.
Applications for its Index Advantage annuity must be signed and received by Dec. 13, and if the premium is paid in cash, then the payment must be received by Dec. 22 in order to have the policy issued by that day.
After Dec. 22, new business forms, illustration software support and marketing materials for Index Advantage will no longer be available.
The announcement follows steeply declining fixed annuity sales for the insurer. Back in the first quarter of 2009 — a bumper quarter for all fixed annuity sellers — Transamerica sold about $2.09 billion in fixed annuities, according to data from Beacon Research Publications Inc.
Estimates of overall fixed annuity sales for the industry in that period were $34.7 billion.
Since then, falling interest rates have sent sales into a tailspin. Transamerica had $151.4 million in fixed-annuity sales on the first quarter. The overall industry posted $16 .5 billion in total fixed-annuity sales, according to Beacon Research.
During the second quarter, fixed-annuity sales picked up for the overall industry, reaching an estimated $19.4 billion, but Transamerica continued its decline, falling to $89.6 million.
