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Retirement Security Presentation 

The Federal Advisory

Committee on Insurance 

Public Meeting

Alane Dent

Vice President, Federal Relations—Taxes & Retirement Security

Jim Szostek

Vice President Taxes & Retirement Security

February 10, 2015
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Agenda 

 The Changing U.S. Retirement Landscape 

 Guaranteed Lifetime Income Products --

Annuities 

 Administration’s Initiative on Lifetime Income 

 Regulation of Annuity Products 
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An Aging Population 

Number of People Age 65 and Older in the U.S.

Source: LIMRA, 2011
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Assets in Private DB vs. DC Plans

Year Assets in Defined 

Benefit Plans 

Assets in Defined 

Contribution Plans 

1970 82.8% 17.2% 

2013 37.9% 62.1% 

From: U.S. Federal Reserve Flow of Funds.
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Life Insurers Hold $4.3 Trillion 

in Long-term Savings 

1 in every 6 dollars 

 Life Insurers: $1.2 trillion (20% of DC plans) 

 Life Insurers: $790 billion (1.2% of IRAs) 

 Life and Individual Annuities ($2.3 trillion) 
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Distribution of Life Insurer Premiums 

by Line of Business* 

Year Life Insurance Annuities 

1970 85.4% 14.6% 

2013 31.2% 68.8% 

*Only annuities and life insurance are considered. Excludes accident

and health.

ACLI tabulations of NAIC data.
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“People always live for ever when there

 is an annuity to be paid them.”

--Jane Austen, Sense and Sensibility
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Annuity Owners Are Middle Income 

 8 in 10 (80%) of annuity owners have 

income below $100,000

 35% have income below $50,000

 only 7% have income greater than 

$200,000

Source: 2013 Gallup Organization Survey (conducted with Matthew Greenwald & Associates)
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 65% are retired

 the average age of an annuity owner is 70

 51% of annuity owners are women

Source: 2013 Gallup Organization Survey (conducted with Matthew Greenwald & Associates)

Annuity Owners Are Older 
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 82% say annuities are safe and an important source

of retirement security

 90% say an annuity is an effective way to save for 

retirement

 84% say they intend to use the annuity for retirement 

income

 87% say they intend to use the annuity as a financial 

cushion for living beyond life expectancy

 79% say they intend to use the annuity to avoid being

a financial burden on children

 

Source: 2013 Gallup Organization Survey (conducted with Matthew Greenwald & Associates)

Annuity Owners Feel 

Financially Prepared 
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Administration’s Lifetime Income 

Initiatives 

Treasury 

 Qualified Longevity Annuity Rule (July 2014)

 Target Date Funds with Lifetime Income Features 

(Notice 2014-66)

 

Department of Labor 

 Lifetime Income Illustrations on Benefit 

Statements (Agenda July 2015)

 Annuity Selection Rule (Agenda October 2015)
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Regulation of Annuity Products 

National Association of Insurance Commissioners

Voluntary organization of state insurance Commissioners dedicated to coordination 

and collaboration across the state and with federal and international regulators -- No 

statutory authority for enforcement

State Insurance Departments

Financial Regulation

Statutory Accounting Principles

Risk Based Capital Standards

Exams and Audits

Company Licensing

Consumer Protection

Senior Credentials

Disclosure and Suitability

Replacement Regulations

Product Regulation Market Conduct

Securities and Exchange Commission / FINRA

Variable Products are treated as Securities. Requires prospectus and can only be 

sold by agents/brokers with appropriate licenses
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