In-the-dark Edward Jones pulls plug on Hartford life, annuity sales
March 26, 2012 by Darla Mercado
Insurer’s surprise exit from the two businesses ‘creates an amount of uncertainty’ for broker-dealer; B-D yet to be contacted
By Darla Mercado
March 26, 2012
The Hartford Financial Services Group Inc.’s announcement that it is restructuring its business is less than a week old. But one of the carrier’s major distributors has already decided to hold off on selling the company’s life and annuity products for now.
Edward D. Jones & Co. LP on Friday said it will suspend sales of Hartford’s life insurance product until the broker-dealer receives further details on how the insurer will proceed with its structural changes, Merry Mosbacher, a principal in Edward Jones’ insurance marketing unit, confirmed. She also said the B-D is waiting to see what The Hartford’s pullback means for advisers and clients.
The insurer last week announced a major restructuring wherein it will run off its individual annuity business, ceasing sales after April 27. The Hartford also said it will sell its individual-life business, as well as its broker-dealer, Woodbury Financial Services Inc., and its retirement plan business.
The Hartford is one of the biggest sellers of life insurance at Edward Jones, and the firm is a “significant distributor” for the insurer, Ms. Mosbacher said.
News of the insurer’s new direction caught executives at the broker-dealer off guard, as there was no warning about the restructuring. The announcement also was issued during a week when many Edward Jones executives were traveling.
“There was no notice: We didn’t have any knowledge of this, and whenever there’s news on a product partner and it creates an amount of uncertainty for us, our position is to stop sales,” Ms. Mosbacher added.
The carrier has yet to reach out to the broker-dealer, Ms. Mosbacher said.
Edward Jones last Wednesday also decided to suspend sales of Hartford’s annuities.
Not all of Hartford’s broker-dealer partners are walking away from the carrier’s life insurance products, however. Raymond James Financial Inc. is still selling the insurer’s coverage, leaving the decisions up to advisers.
“There are situations that call for underwriting expertise, such as cancer survivors, so we still want to be able to use them,” said Jim Swink, vice president of Raymond James Insurance Group.
Calls and e-mails to Hartford spokesmen David Snowden and David Potter were not immediately returned.
