Indian billionaire investor Rakesh Jhunjhunwala says he's very upbeat about his country's growth potential after the country underwent a massive banking crisis and the rollout...Asia Economyread more
Stocks in Asia mostly recovered in Tuesday afternoon trade as investors cheered a reprieve in U.S.-China trade tensions surrounding Chinese telecommunications giant Huawei.Asia Marketsread more
The issue of corporate debt has surfaced as companies continue to use the low rates the Fed has provided to lever up their balance sheets.The Fedread more
The U.S. government on Monday temporarily eased some trade restrictions imposed recently on China's Huawei, a move that sought to minimize disruption for the telecom company's...Technologyread more
Most U.S. hedge funds aren't expecting another big stock market sell-off as more firms curb bets on volatility, according to Nomura.Marketsread more
Mall owners are increasingly building out food halls with local chef-driven eateries, sushi bars and premium coffee shops.Retailread more
While Trump's lawyers had argued that the committee's subpoena did not have a legitimate legislative purpose — and was therefore invalid — Mehta took a broader view.Politicsread more
See which stocks are posting big moves after the bell on Monday, May 20.Market Insiderread more
A record 257.4 million travelers are expected to opt for U.S. airlines for travel this summer, the 10th consecutive annual increase, a trade group forecast on Tuesday.Airlinesread more
Binny Bansal, co-founder of Indian e-commerce giant Flipkart, says there are three traits that led to the business landing a record-breaking sale to retail giant Walmart.Entrepreneursread more
Silicon Valley argues that Wall Street focuses too much on near-term profits — but investors have embraced money-losing biotech IPOs.Marketsread more
U.S. annuities sales are booming months after the demise of a regulation that targeted the product, which had required that brokers put customers' interests ahead of their own compensation.
Several U.S. insurers reported surging annuities sales when outlining third-quarter results in recent weeks. American International Group's individual retirement business posted $3.6 billion in annuities sales, a 65 percent jump from the year-ago period. Lincoln National and Brighthouse Financial detailed gains of 61 percent and 43 percent, respectively.
The companies can thank the end of a Department of Labor regulation known as the fiduciary rule. Announced during the Obama administration, the rule required brokers to act in clients' "best interest" when offering retirement advice, and inform them about commissions and other incentives they received for selling products like annuities.
Total annuity sales were $59.5 billion during the quarter ending April 30, according to Limra Secure Retirement Institute. Sales had not been as high since early 2015, just before the rule was being put in place.
But the rule effectively died in June, when the Trump administration declined to pursue a U.S. Supreme Court appeal that might have kept it alive. While the U.S. Securities and Exchange Commission and state regulators are working on their own versions, consumer advocates say they do not expect investors to be as protected, particularly when high-fee annuities are involved.
"It still permits egregious products and egregious sales," said Barbara Roper, director of investor protection at the Consumer Federation of America, about the most recent draft of a National Association of Insurance Commissioners (NAIC) proposal.
In the most basic annuity, a customer gives a lump sum of cash to an insurer and receives a payment each month over a set number of years, sometimes for life.
Consumers can benefit from that kind of steady income during retirement, but problems often arise with complex products, like fixed-indexed or variable annuities, Roper said. Investors often do not understand the risks and costs, which can be hidden in the fine print, she said.
Fees for complicated annuities can be 4 percent to 9 percent of the principal, industry sources said.
The SEC is working on an investor protection rule it calls "Regulation Best Interest," while the NAIC plans to meet on Thursday in San Francisco to smooth out differences among state regulators for a proposed model rule that other states could later choose to adopt.
New York moved ahead of other states in June by issuing a regulation that requires insurance agents and brokers to act in consumers' best interest when selling annuities and life insurance. Although the New York State Department of Financial Services wants others to adopt the rule, which becomes effective in August 2019, the NAIC opposed some of the language.
Iowa Insurance Commissioner Doug Ommen expressed concern about using the term "best interest" because it could trigger litigation against insurers and agents, according to minutes of an August meeting.
The NAIC's most recent draft of the rule would require insurers and agents to "act in the interests of the consumer" without placing their own financial interests first. It would not require them to recommend the best-priced products.
Birny Birnbaum, executive director of the Center of Economic Justice, said the draft does not go far enough. "There is nothing in the proposal that forces the consumers' interest ahead of the insurers' interest," he said.