Hot-selling fixed indexed annuities (FIAs) were dealt a blow when federal Labor Department regulators made it more difficult to distribute the products into retirement accounts.

So where do FIAs go from here?

In the near term, a “fire sale” effect could mean a rise in FIAs as insurance agents and brokers push to sell as many as possible before the final deadline of Jan. 1, 2018, when the DOL fiduciary rule goes fully into effect, some industry experts said.

But so long as interest rates remain low, FIAs will continue on their hot streak, said Sheryl J. Moore, publisher of Moore Market Intelligence and Wink’s Sales & Market Report, which tracks FIA sales.

“They will drop slightly when the new procedures go into effect in January 2018,” Moore said in an email.

“However, I think we are still going to continue to see record sales for indexed annuities, moving-forward,” she added. “The low-interest-rate environment is really fueling sales of these products. Plus, consumers want the safety and guarantees that indexed annuities offer.”

What happens when interest rates turn around and rise?

Sales may cool, but rising rates won’t necessarily translate into a corresponding decline in FIAs, Moore said.

“Banks will go back to selling CDs if rates improve,” Moore said. “Some agents will go back to selling fixed annuities because they are a simpler sale. However, you have to remember that an increase in rates also means an increase in indexed annuity caps.” Click HERE to view the full article