Message from the BISA President:

Following extensive discussion and research, the Bank Insurance & Securities Association (BISA) is pleased to present a collection of articles addressing several of the key, important elements of variable annuity (VA) sales. The collection provides insight and guidance to our members on important topics related to VAs. Our goal is to provide sound, objective guidance regarding the sale and suitability determination of VAs.

BISA General Counsel John Hartigan and Legislative, Regulatory & Compliance Committee Chairman Dick Starr took the lead in this effort, with input and insights provided by BISA Director Marc Vosen.

VAs are complex, and they are becoming more complex by the day. Sales practices and suitability determination are challenging factors for the bank broker-dealer distribution channel. New features that address emerging needs can bring added costs, and evaluating the cost/benefit requires extensive training, new sales skills and expanded documentation.

Regulatory scrutiny of VAs has increased along with increases in VA sales as baby boomers address their retirement income needs. "Lifetime Income" will continue to be a key need of retiring baby boomers and the single, biggest challenge for advisors. Creative income and growth products will be essential in meeting the retirement income challenge as life expectancy continues to increase. As the demographics shift, the challenge of providing for "living a long life" will further displace the competing challenge of providing for "dying too soon."

The benefit of the tax-deferred status of VAs has significantly changed along with lower tax rates and the shift to defined contribution retirement plans. At the same time, demand for today's new living benefit guarantees has potentially altered the priority of annuitization and tax deferral to investors. Sales practices and suitability determination will continue to change along with these factors.

The BISA has assembled these articles to provide some common guidance and best practices for our members and to demonstrate to regulators that we are encouraging and implementing the dynamic practices they oversee.

On behalf of the BISA executive team, staff and board, I hope you will find these articles on variable annuities very helpful and informative. The BISA focuses on serving its members in two key areas: (1) providing our members with the knowledge and support to grow their businesses through enhanced productivity, professionalism and service to their customers; and, (2) helping to ensure a healthy regulatory environment that compliments future growth.

As always, we value your feedback on how we can best serve our dynamic and growing industry.

Sincerely,

Rob Comfort
President