Insurance companies face many challenges as active providers of products and services in the retirement market. A number of these challenges arise in connection with the living benefit features of variable annuity contracts. Insurance companies must manage the market and hedging risks associated with these features. They also must address plan sponsor and plan participant concerns about the complexity and cost of products that incorporate the features, the portability issues associated with the features when plan sponsors change service providers or plan participants change employers and the risks of relying on the financial ability of a single insurance company to support guarantees over a period of many decades. Insurance companies that issue newer hybrid products, such as contingent annuities, which link insurance guarantees to separate mutual fund or managed accounts, must structure their relationships with account managers to ensure adherence to asset allocation restrictions that support the insurance guarantees. These products have raised difficult questions concerning their status under the federal securities laws and state insurance laws. Other, newer innovative products and features will invariably raise similar questions. In addition, because they provide insurance products and recordkeeping, administrative and other services to retirement plans, insurance companies regularly confront complex ERISA fiduciary, prohibited transaction and disclosure requirements.

We help by advising and assisting in connection with: 

  • Retirement income product design, disclosure, distribution, marketing and regulatory issues, including those presented by living benefit features.
  • Structuring registered and unregistered lifetime income guarantees.
  • Developing products and services and drafting and evaluating agreements with plan service providers that satisfy ERISA fiduciary, prohibited transaction and disclosure requirements and achieve risk management objectives.
  • Compliance with product feature, investment, reserve, form filing and various approval requirements under state insurance laws.
  • Determining the availability of state guarantee fund coverage for lifetime income products.
  • Negotiating and structuring joint ventures between insurers and other financial firms in connection with lifetime guarantees, including guarantees that wrap managed accounts.
  • Structuring activities to avoid insurance company registration under the Investment Advisers Act or coming within the ERISA definition of fiduciary.
  • ERISA and other issues arising in connection with the sale of individual variable annuity contracts to retirement plans.
  • Establishment and operation of unregistered and registered separate accounts, and offerings of unregistered group insurance contracts and registered variable life and annuity contracts, including those that provide income guarantees.
  • Developing (i) materials to enable plan sponsors to engage in a prudent process in selecting service providers and (ii) educational materials for plan participants consistent with ERISA’s non-fiduciary educational guidelines.
  • Plan sponsor, participant and plan service provider disclosure rules.
  • Procedures and practices for distribution of and rollovers to related products (e.g., IRAs) consistent with ERISA’s fiduciary and prohibited transaction rules.
  • Exempt and registered offerings of general account products, including lifetime income guarantees, equity-indexed annuities and fixed annuities with market value adjustment features.
  • Producer and agency licensing, compensation and other distribution-related issues under insurance and securities laws.
  • Insurance company compliance with Securities Exchange Act Release 8389 to avoid registration as a broker-dealer.
  • Reinsurance and hedging activities with respect to lifetime income products.
  • Formation and structuring of financing arrangements and vehicles, including onshore and offshore special purpose insurers, protected cell insurers and captives.
  • Requests for SEC no-action relief, IRS private letter rulings and DOL advisory opinions and applications for SEC exemptive orders.
  • Responses to inquiries from and inspections by the SEC, DOL, FINRA and other regulators.