Jackson National Life Insurance Co.'s temporary halt on tax-free exchanges of variable annuities is in effect until Dec. 16 — but it turns out not everyone is subject to the suspension.
Advisers with Jackson's network of broker-dealers, National Planning Holdings Inc., can continue to make 1035 exchanges into Jackson's variable annuities with living benefits. Four broker-dealers comprise NPH: Invest Financial Corp., Investment Centers of America Inc., National Planning Corp. and SII Investments Inc.
Jackson spokeswoman Melissa Hernandez confirmed that the suspension doesn't apply to the four firms, but declined to comment further.
The ban — which applies to all other distributors of Jackson's annuities —
began Oct. 25 and will run until Dec. 16. Jackson, which today reported making $15.5 billion in variable annuity sales during the first nine months of the year, up slightly from $15.3 billion last year, initially put the suspension in place because the demand for its variable annuities with living benefits was too high.
Jackson was the top seller of variable annuities for the year through the second quarter, according to Limra. The insurer historically has offered advisers a wide array of underlying investments for the VA at a time when many of its competitors turned toward more conservative options.
Representatives affected by the ban were less than thrilled to hear about how the restrictions would apply to distributors.
“These days it's so important that advisers have trust and confidence in their vendors,” said Mitchell Kauffman, managing director of Kauffman Wealth Services “This sends a very discouraging message about Jackson's integrity and how they treat the advisers who do business with them.”
Naturally, advisers who are with the insurer are pleased that business can continue as usual.
“We were pleasantly surprised to find that they weren't restricting us,” said Thomas Fross, founder of Fross and Fross Wealth Management, a firm that's affiliated with SII. His firm's work with annuities comes more from rollover activity than 1035 exchanges, but he was nonetheless pleased that his practice would be unaffected by the suspension.
”We get no pressure to write Jackson's products, and we wouldn't know from day-to-day activities that we're owned by them,” Mr. Fross said. “But at times like this, the advantage of being owned by a larger insurer come through.”
