Revenue Ruling 2012-3; the preamble to the QLAC Regs; IRS Notice 2014-66; and the Oct. 23, 2014 DOL Information Letter to Treasury are just a few of the critical building blocks which have enabled an exciting new generation of lifetime income products which we are now seeing in the market. The three 2019 SECURE ACT provisions further enhanced the attractiveness of those guarantees, while a dozen or so SECURE ACT 2.0 provisions addressed some of the more pressing technical rules which needed to be handled as well.

With all the steps taken at the federal level to transform defined contribution plans into robust vehicles by which to provide retirement security (though acknowledging there is still much to be dome), its also worthwhile to dust off the the old hornbooks with their staid old law as well-like on how insurance works. I’m thinking of a “classic” who Jack Hunter-my general counsel at LFG-insisted we all become familiar: “Vance On Insurance.” Not up there with Corbin on Contracts or Prosser on Torts, for sure, but it has withstood the test of time. You see, once you start promising folks that you will guarantee payments for their lifetime, the notion of how you can do that with any level of confidence comes into play. For now, anyway (my apologies to the tontine folks….), this means that you need to weave these federal law enhancements in with the manner which state-based insurance laws work.

I spent a bit of time with the lawyers and actuaries at Allianz Life in testing the waters on product designs which successfully pull off this integration. One result was the following assessment: “Assessing Guaranteed Lifetime Income Programs Utilizing CITs.” I hope you find it informative-and not critical…..