Company not prepared to put annuities manufacturer on its platform
Now that The Hartford Financial Services Group Inc. has decided to sell its annuity operations to Forethought Financial Group, Raymond James is dropping Hartford annuities as one of its sales options
Scott Stolz, president of Raymond James Insurance Group, confirmed that the broker-dealer sent advisers a memo indicating that the firm would stop selling Hartford's annuities after Friday, April 27. This follows the sale of the insurer's individual annuity distribution business to Forethought on Thursday. Hartford aims to finalize the purchase and sale agreement by June 30 and close the deal in early 2013.
Forethought, which manufactures indexed and fixed annuities, sells via independent agents and independent marketing organizations, but currently isn't participating in the broker-dealer market. Though the Hartford deal would eventually help Forethought manufacture variable annuities and tap registered representatives to sell them, for now, firms are finding the privately held insurer to be an unknown quantity.
“We don't have an arrangement with Forethought; we're not prepared to put them on the platform,” Mr. Stolz said, noting that keeping Hartford would require Raymond James to make Forethought an approved carrier among its list of product providers.
The sales agreement lets Forethought buy up the carrier's new business capabilities, which include the roster of products currently on sale and its distribution and marketing units. The in-force block of annuity business will remain with Hartford.
It will allow Hartford to continue writing new annuities for a transition period beginning on May 1, with Forethought assuming the expenses and risk for the sales through a reinsurance agreement. After the transition, new sales will be coming from Forethought.
"We are excited about the opportunities this transaction provides both for many of our employees and for the product platform we have created," said David Potter, spokesman for The Hartford. "Our annuity capabilities are complementary to those of Forethought."
The transition period is expected to end when the deal is finalized in the second quarter of this year, Mr. Potter said. He did not comment on Raymond James' decision to stop sales.
