MetLife seeks reduced income-benefits for VAs

MetLife Inc., the top seller of variable annuities, is seeking permission from regulators to sell two new income benefits featuring lower withdrawal percentages for its variable annuity riders. The riders, GMIB Max II and the GMIB Plus IV, were filed with the Securities and Exchange Commission Aug. 17. The GMIB Max II will offer 5.5% income withdrawals, down from the 6% featured in the first iteration of the GMIB Max. The GMIB Plus IV will provide a 4.5% income benefit, down from 5% in the GMIB Plus III. These SEC filings arrive after Steve Kandarian, MetLife's chief executive, said on a second-quarter conference call that the insurer would make changes to its variable annuity features. “Like all of our businesses, we look for balanced growth,” he said. “We wouldn't want any one part of the business to overwhelm other parts.” MetLife had a banner second quarter for variable annuity sales, hitting $6.97 billion and reflecting a 55% increase year over year. Advisers don't believe the tweaks on the features will significantly stem inflows into MetLife's variable annuities; the GMIB Max — which was released in May — attracted a strong following for the 6% income benefit and still will seem attractive, even with a 50-basis-point trim. “I think you'll still see a lot of premium going their way; the changes don't seem significant,” said Tyler Denholm, a senior analyst at ValMark Securities Inc. “We sell a lot of MetLife and had a great year with them, even when the GMIB Max product came out.”