Ohio National to end Variable Annuity brokerage arrangements

Oct 2, 2018

  1. DHK
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    DHK "YOU CAN'T HANDLE THE TRUTH!"

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    Ohio National to end brokerage arrangements, eliminate adviser compensation on variable annuities=5d861dbdde84793d5e5190bd5c88ad35b9c71d8af50d76a50b2ac9e243d5f801%40investmentnews

    [quote]
    In what is believed to be a first-of-its-kind move among insurers, Ohio National Financial Services Inc. has informed broker-dealers that sell its variable annuities that [B]it will terminate servicing agreements and cut off trail commissions by mid-December,[/B] setting the stage for a showdown with some of the largest brokerage firms in the country.

    Ohio National sent a letter to its broker-dealer partners on Sept. 28 to "provide notice of termination of any and all servicing agreements" in place between the two entities and their affiliates. The termination, which takes effect Dec. 12, means that "all individual annuity sales compensation will cease at that time," according to the letter, which was obtained by [I]InvestmentNews[/I].

    [...]
    Angela Meehan, an Ohio National spokeswoman, said the firm "will continue to service and support our existing contract owners" and that the firm's new strategy of focusing on its life insurance and disability income insurance is "consistent with our fiduciary duty to policyholder members."

    "The steps we are taking allow for advisers to continue to serve our contract owners," she added.

    Advisers, however, questioned what those steps are, and called on regulators to look into Ohio National's move to terminate servicing agreements and adviser compensation. If regulators don't take action, they said, it could set a bad precedent for other insurers.[/quote]

    Just... wow.
     
    DHK, Oct 2, 2018
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  2. Tahoe Ray
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    Tahoe Ray Guru

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    Those reps right now:



    This is pretty crazy.
     
  3. jasperjohns
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    jasperjohns Super Genius

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    WHAT!?!?! That is crazy. And of all the companies to do that Ohio National? I always worry that the fixed indexed carriers will pull this one day as well.
     
  4. Golfnut2112
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    Golfnut2112 Guru

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    I just received an e-mail from Ohio National. They stated the article had a lot of misinformation and while they are ending the selling agreements for new business they are continuing to have servicing agreements for the existing book so you will be able to service your clients.
     
  5. DHK
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    DHK "YOU CAN'T HANDLE THE TRUTH!"

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    I sincerely hope so!
     
    DHK, Oct 3, 2018
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  6. VolAgent
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    Yet it never addressed trail commissions...
     
  7. Sheryl J Moore
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    Sheryl J Moore New Member

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    I have the aforementioned letter in my hands, and it appears that would be a gross misstatement. Their clarification essentially states that they are going to continue letting the reps service the business, period. So, "we will let you service the business, we just aren't going to pay you for it?" sjm
     
  8. VolAgent
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    That is how it read to me. They felt the need to address this, yet completely ignored the compensation portion? I would say that was intentional.

    I've always thought well of Ohio National, but to me this is dirty. Either they are screwing the reps or they are screwing the policyholders, and my guess is the policyholders. The reason I say policyholders is that they fully intend for the reps to roll the business once they realized they will no longer get trail commissions.

    Hopefully I am wrong.
     
  9. Sheryl J Moore
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    Sheryl J Moore New Member

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    Interestingly, the career agents are not receiving the same treatment. sjm
     
  10. bmarsh
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    bmarsh Super Genius

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    Let’s see how fast their life premium dries up from ripping off agents.
     
    bmarsh, Oct 3, 2018
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