DOL Requests 18 Month Extension

Extension requested for BICE, two other PTEs to July 1, 2019

The Labor Department is proposing to extend the January applicability date of its fiduciary rule by 18 months.

In a filing with the court in the case being brought against Labor by Thrivent Financial for Lutherans, Labor Secretary R. Alexander Acosta told the court that on Wednesday, Labor submitted to the Office of Management and Budget proposed amendments to three exemptions: best-interest contract exemption; class exemption for principal transactions in certain assets between investment advice fiduciaries and employee benefit plans and IRAs; Prohibited Transaction Exemption 84-24 for certain transactions involving insurance agents and brokers, pension consultants, insurance companies, and investment company principal underwriters.

The proposed amendments extend the transition period and delay of applicability from Jan. 1, 2018, to July 1, 2019.

Notification of Labor’s OMB submission becomes publicly available the morning after submission.

Micah Hauptman, financial services counsel at the Consumer Federation of America — a staunch advocate of Labor’s fiduciary rule — told ThinkAdvisor on Wednesday that while specifics of the 18-month delay proposal have yet to be released, as CFA “made clear” in its Monday comment letter in responde to Labor’s request for information, “retirement savers need and deserve the full protections of the rule on Jan. 1.”

On that date, the Federation says, “the full protections” of BICE, the principal transactions exemption and amendments to PTE 84-24 are currently scheduled to be implemented.

“Without complete implementation of these prohibited transaction exemptions (PTEs), the full protections and benefits of the fiduciary rule won’t be realized, and retirement savers will continue to suffer the harmful consequences of conflicted advice,” the consumer group wrote.

“Unfortunately, by posing the question about whether there should be a further delay, the department is creating unnecessary uncertainty and confusion in the market. More concerning, it is creating a self-fulfilling prophecy: Firms, in anticipation that a delay will be granted, are likely to stall their compliance efforts, which the department is then likely to point to as the justification to delay.”

Investors, the group argued, “will suffer the consequences.”

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Prudential Restructures


Published 07/24/2017 – by Brian Anderson

In the latest restructuring move involving major life and annuity carriers, Prudential Financial unveiled a new organizational structure on July 20 intended to extend its customer reach and facilitate pathways to new markets.

In announcing the changes, the Newark, N.J.-based company said the new structure better reflects its strategic focus on leveraging its mix of businesses and its digital and customer engagement capabilities to expand its value proposition for the benefit of customers and stakeholders.

“Our strategy, enabled by our culture of teamwork and collaboration, sets us on a path to serve a broadening range of customers as the leading provider of integrated financial wellness solutions. It does so in a way that benefits from and contributes to our success as a global investment manager,” said John Strangfeld, chairman and CEO of Prudential.

“Prudential has always operated with a ‘customer first’ philosophy,” said Stephen Pelletier, executive vice president and chief operating officer of Prudential’s U.S. businesses. “To further improve outcomes for our customers, we have formalized an organizational structure that allows for greater agility and integration in how we engage, serve and deepen relationships with our customers throughout their lifetimes.”

Under the new structure, which will become effective in the fourth quarter of 2017, the company’s five U.S. businesses will be aligned under three groups oriented to the needs of specific customers. Each group will have a leader focused on understanding customer needs, experiences and expectations, and applying that understanding to capture growth opportunities within and across businesses.

  • Lori FouchéIndividual Solutions will comprise Annuities and Individual Life Insurance, and be led by Lori Fouché, who in 2015 became president of Prucential Annuities. Fouché joined Prudential in 2013 and became the CEO for Prudential Group Insurance, which produces and distributes group life, disability, voluntary and corporate and trust-owned life insurance. Before joining Prudential, Fouché served as president and CEO of Fireman’s Fund Insurance company.
  • Kent Sluyter, who currently oversees Individual Life Insurance, will become president of Annuities.
  • Caroline Feeney, who currently leads Prudential Advisors, will become president of Individual Life Insurance, which includes Prudential Advisors.
  • Salene Hitchcock-Gear, currently chief operating officer of Prudential Advisors, will become president of Prudential Advisors and report to Feeney.
  • Workplace Solutions will comprise Retirement and Group Insurance, and be led by Andy Sullivan, who currently leads Group Insurance.
  • Phil Waldeck will continue to lead Retirement, and Jamie Kalamarides, currently head of Full Service Solutions within Retirement, will become president of Group Insurance.
  • Investment Management will continue to comprise all PGIM businesses, including PGIM Investments, and will continue to be led by David Hunt, president and CEO of PGIM.

According to Pelletier, the structure maintains foundational strengths, builds on new and existing capabilities, and anticipates the emerging needs of customers within a changing market and an evolving workplace. “It provides clear leadership and accountability, and facilitates resource allocation to capitalize on growth opportunities, while continuing to provide transparency at the business segment level,” he said.

The announcement comes in the wake of other recent restructuring moves and rumors by major carriers as they deal with the prolonged low interest rate environment, SIFI designations and other regulatory challenges:

  • MetLife’s recent move to spin off its U.S. retail individual life and annuity business to newly formed Brighthouse Financial.
  • Toronto-based Manulife Financial is reportedly exploringan IPO or spin off its John Hancock unit, according to a July 13 Wall Street Journalarticle.
  • AXA announcedback on May 10 its intention to IPO its U.S. operations, intending to create to create a leading U.S. life insurance, annuity and asset management company.

About Prudential: Prudential Financial, Inc. (NYSE: PRU), a financial services leader with more than $1 trillion of assets under management as of June 30, 2017, has operations in the United States, Asia, Europe and Latin America. Prudential’s diverse and talented employees are committed to helping individual and institutional customers grow and protect their wealth through a variety of products and services, including life insurance, annuities, retirement-related services, mutual funds and investment management. In the U.S., Prudential’s iconic Rock symbol has stood for strength, stability, expertise and innovation for more than a century. For more information, please visit


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A Case Study in Long Term Care

Long-term care and the cost of care can be overwhelming for most. In the past, traditional stand-alone LTC policies were the only way to insure long-term care expenses. These days, there are more ways to obtain this valuable coverage – including LTC riders on Life Insurance policies.

Underwriting long-term care risks can be very different from underwriting for life insurance. LTCi underwriting takes into account medical impairments that impact ability to perform daily living activities. Whereas, life underwriting is more concerned about impairments that affect mortality, or life expectancy. In some cases, your client may be eligible for life insurance at a favorable rate class, but may be rated or declined for long term care.

This recent case study shows how different underwriting mortality vs. morbidity can be and how using life insurance with a rider can be effective over traditional LTCi:

  • 62 year old female
  • Seeking $1 million of UL coverage with a Long Term Care rider
  • Non smoker; normal build
  • Hypothyroidism diagnosed in 1980; well controlled on medication
  • Was seen once by a chiropractor for back pain with improvement
  • Diagnosed with scoliosis
  • Final underwriting decision: Super Preferred for life coverage; Standard for the LTC rider due to scoliosis and back pain history

Non-traditional long-term care insurance and chronic illness riders are the perfect solution for those impairments that would be declined for traditional LTC riders.

These alternative riders are automatically available on eligible permanent products with little to no additional underwriting.

Whatever the case may be, there is a product we can pivot to, to cover long-term care needs. Contact ISN @ 800-338-1892.  We are here to help you sort through the different options and pre-qualify your client for this much-needed coverage.


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Newlyweds Need to Think About Taxes

Spring showers bring summer flowers and weddings typically aren’t far behind. Newlyweds have a lot to think about and taxes might not be on the list. However, there is good reason for a new couple to consider how the nuptials may affect their tax situation.

The IRS has some tips to help in the planning:

Report changes in:

1. Name. When a name changes through marriage, it is important to report that change to the Social Security Administration. The name on a person’s tax return must match what is on file at SSA. If it doesn’t, it could delay any refund. To update information, file Form SS-5, Application for a Social Security Card. It is available on, by calling 800-772-1213 or at a local SSA office.

2. Address. If marriage means a change of address, the IRS and U.S. Postal Service need to know. To do that, send the IRS Form 8822, Change of Address. Notify the postal service to forward mail by going online at or at a local post office.

Consider changing withholding
Newly married couples must give their employers a new Form W-4, Employee’s Withholding Allowance Certificate, within 10 days. If both spouses work, they may move into a higher tax bracket or be affected by the Additional Medicare Tax. Use the IRS Withholding Calculator at to help complete a new Form W-4. See Publication 505, Tax Withholding and Estimated Tax, for more information.

Decide on a new filling status
Married people can choose to file their federal income taxes jointly or separately each year. While filing jointly is usually more beneficial, it’s best to figure the tax both ways to find out which works best. Remember, if a couple is married as of Dec. 31, the law says they’re married for the whole year for tax purposes.

Select the right tax form
Choosing the right income tax form can help save money. Newly married taxpayers may find they now have enough deductions to itemize them on their tax returns. Newlyweds can claim itemized deductions on Form 1040, but not on Form 1040A or Form 1040EZ.


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Stretch it Out

One of the primary benefits of an Individual Retirement Account (IRA) is the ability to defer taxes. The longer the deferral the faster the IRA will grow. The idea of “stretching” your IRA is c concept that has been talked about and utilized for many years. The “Stretch” Concept is a wealth transfer technique that may allow the benefits of an IRA to stretch across several generations.

The IRA is the governments way of allowing us to save for retirement. But, the IRS still wants its fair share. As we know, they require us to start taking distributions at age 70 1/2. Because all distributions are taxed and may cause the IRA owner to go into a higher tax bracket, most IRA owners take the least amount out of their IRA when forced to take distributions. This is called the Required Minimum Distribution (RMD).

When we refer to the “Stretch”, we mean only the RMD is taken each year by the account owner and their designated beneficiaries thereby extending the period for maximum deferral. When someone is only taking RMD’s, it is most often a situation when the person has other sources for current income so they do not need the RMD’s for living expenses.

Here is how it works- each situation is different and should reflect variables such as marital status, age of spouse, number of children and financial status. But in general the IRA owner should:

  • Name the spouse as primary beneficiary
  • Name children/ grandchildren as contingent beneficiaries
  • Ultimately divide the account into separate accounts before the IRA reaches the contingent beneficiaries.

If the IRA is divided into separate accounts for each beneficiary by December 31 of the year after the IRA owner’s death, each beneficiary can use his life expectancy to compute the new RMD’s. Using the younger ages of the beneficiaries means smaller distributions and a “stretching” of the asset for a much longer time.

A “stretch” IRA can provide many benefits for a beneficiary. It may provide lifetime income to the beneficiaries. By withdrawing smaller amounts over a longer period of time, there is a great potential to pay lower taxes. In addition, the continued tax dereffed growth of the account can increase the wealth passed to heirs.



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A Nice Change- Positive LTC News

Image result for mutual of omaha logo

From the Desk of Randy Mousel

Together, we share a mutual investment in helping people protect their families, their finances and their futures with long-term care insurance. At Mutual of Omaha, this is something we’ve been doing for over 30 years. While some companies have exited the market, re-priced their products or shifted their focus away from traditional LTCi, we remain committed to this important product line.

As a mutual company, we’re not influenced by outside interests. We make product and pricing decisions independent from others in the marketplace. While we remain committed to always acting in the best interests of our policyholders, our investment in LTCi also extends to you. Thanks to the expertise we’ve gained over the years, we’re able to design LTCi products your customers want and need and price them appropriately, making them easy for you to sell. We’re also here to help you build your LTCi business by providing the service and support you need.

We appreciate the business you place with Mutual of Omaha and we’re grateful to know you share our mutual investment in LTCi. Together, we can help people prepare for a secure future.

Randy Mousel
SVP Brokerage SalesMutual of Omaha
(800) 693-6083
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Estate Tax Repeal?

If the Trump Administration achieves its stated objective of repealing the federal estate tax, U.S. life insurers predict it will have a negative impact on survivorship life insurance sales.

In April, LIMRA asked 24 U.S. insurers how they thought repealing the estate tax would affect life insurance sales. Forty percent of carriers said they believe it would have a “significant negative impact” on their survivorship life insurance sales and 54% think it would have a “minor negative impact” on their single life sales.

While six in 10 surveyed (58%) do not expect U.S. estate tax law to change this year, if it is repealed three-quarters believe it would have a significant negative impact on industry survivorship life insurance sales in the following year.

Current federal estate tax law only applies to estates exceeding $5.49 million per person, with a 40% top tax rate. Since Americans can leave an unlimited amount of assets to their spouses, the threshold for married couples is $10.98 million. According to the Joint Committee on Taxation, roughly 0.2% of Americans, or one out of every 500 people who die, are impacted by the estate tax. This includes family owned businesses and farms.

Survivorship life insurance is intended to pay federal estate taxes and other estate-settlement costs owed after both spouses pass away. It represents approximately 4% of the life insurance market and 10% of premium for companies who offer it annually. LIMRA notes that the carriers participating in the survey represent 64% of the survivorship life insurance market.

Beyond the LIMRA study about how carriers think it would impact future sales, the issue also begs the question of whether families with current life insurance policies who would potentially be subject to the estate tax would question the necessity of those policies moving forward. Would life insurance agents who specialize in working with high net worth clients who need life insurance to address estate tax issues need to rethink their business model, perhaps transitioning to wealth management?

Those who might think about canceling policies would first want to consider the following:

  • Even if the federal estate tax is repealed, individual states may keep their estate tax.

Currently, 14 states and the District of Columbia have an estate tax, and six states have an inheritance tax. Maryland and New Jersey have both. State estate taxes can kick in for estates valued at only $1.5 million or less in several states.

  • If it is repealed, it could very well be back in 10 years.

Republicans would need several Democrats to support estate tax repeal in order to achieve a super majority — 60 votes — and avoid a filibuster, which is unlikely. Republicans can bypass the need for 60 votes and achieve repeal with a simple majority in the Senate by passing it through budget reconciliation. But as current rules dictate that any legislation passed under reconciliation must “sunset” after a decade if it would increase the budget deficit outside of a 10-year window, it is likely that the estate tax would return without further action down the road. That could put families subject to the estate tax who canceled their life insurance in a tight spot, as they may not be able to obtain new coverage – or may have to pay much more for it.

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