Insurance provides continue to roll-out new annuity products to meet demand for lifetime income products, even as the Department of Labor finalizes a fiduciary rule that could severely impede how industry markets those products.

The Insured Retirement Institute’s annual state of the industry report suggests demand for lifetime income products is strong, and likely to grow in light of an aging country.

Sales of Investment Oriented Variable Annuities have grown 94 percent over the past five years, and now make up 16 percent of all variable annuity sales, the report found.

Sales of fixed indexed annuities have increased 50 percent since 2011.

The number of insurers offering deferred income annuities has doubled since 2012 and are expected to hit $2.6 billion sales this year, more than double the $1 billion in sales for DIAs in 2012.

And qualified longevity annuity contracts, or QLACs, were a remote option as recently as 2014, when only one provider offered the products.

But regulation from the Department of Treasury last year encouraged wider adoption of QLACs.

QLACs allow retirement savers to defer as much as $250,000 in IRAs and 401(k) plans into contracts that begin making monthly payments at age 85.

The IRI says 11 insurers are now providing QLACs.

Year-over-year sales of all variable annuities were slightly down, at $66.9 billion, but still posted a 15 percent increase over the past five years.

Fixed annuity sales were also down slightly year-over-year, at $43.7 billion, but an 11 percent increase over the past five years.

The prospect of rising interest rates will allow insurers to offer more attractive payouts on annuities, which, along with demographic realities, could spur more demand and further product innovation, the report says.

However, industry headwinds can be expected if the DOL finalizes its proposed fiduciary rule, the report suggests.

As written, the rule would require a fiduciary level of care on anyone selling investment products.

The study says that “fiduciaries are generally prohibited from receiving compensation in connection with the services they provide to plans, participants and IRA owners unless an exemption is available that allows the payment to be made.”

By and large, annuities are sold on commission.

While the DOL’s proposal does provide carve-outs through its Best Interest Contract Exemption, theoretically allowing commission-based sales on annuity products, they are “too narrow” and would effectively prohibit the use of commission-based compensation structures, the IRI said.