Washington, D.C., (April 14, 2009) – The Ohio Department of Insurance, in cooperation with the Association of Ohio Life Insurance Companies (AOLIC) and the American Council of Life Insurers (ACLI), today launched an initiative designed to improve consumer understanding about two popular retirement planning products.

The initiative seeks to improve the disclosure of fixed and index annuity features through the use of standard templates. Fixed and index annuities are financial products that can help consumers save on a tax-deferred basis and then turn that savings into a guaranteed lifetime income stream at retirement.

“This initiative will help ensure that Ohio insurance consumers have clear, concise information about their annuity purchases. Currently, companies provide annuity disclosure information in formats that vary from one insurer to another, making comparisons difficult for consumers. The templates will set a standard format that will assist consumers in making comparisons. The initiative also provides companies with guidelines and suggested language for explaining certain contract features in plain-English,” said Ohio Department of Insurance Director Mary Jo Hudson.

“We are looking at setting a new standard; simply providing information as required by law is not enough. The templates provide guidelines for describing annuity features in plain English and in a standard format to ensure consumers understand the annuity they are considering. We want this disclosure initiative adopted in all the states and for it to become part of the regulatory regime in every state,” ACLI President and CEO Frank Keating said.

“Ohioans are increasingly turning to annuities as they seek to boost their retirement savings and assure those savings will last for the rest of their lives. With clear disclosures, Ohio consumers will have a better understanding of how the annuity they are considering works and how it can help them meet their retirement security goals,” said AOLIC Legislative Counsel Faith Williams.

Under the initiative, Ohio consumers could begin seeing these new disclosure materials immediately. Many life insurers are now tailoring industry-developed annuity disclosure templates for their own particular products. They will include, among other things:

• How surrender charges work;
• What in an annuity contract is guaranteed and what is not guaranteed;
• How to get income from an annuity;
• How the value of an annuity grows;
• How interest is calculated and when it is credited;
• Fees and expenses of owning an annuity.

The templates themselves build on requirements found in the National Association of Insurance Commissioners’ (NAIC) Annuity Disclosure Model Law/Regulation. ACLI and AOLIC—working closely with respective member companies, other industry groups and consumer advocates—developed the disclosure templates with input from seniors and individual annuity sellers. A similar pilot project is now being tested in Iowa.

Efforts also are underway to work with the Securities and Exchange Commission and the Financial Industry Regulatory Authority to achieve regulatory acceptance of the variable annuity disclosure template in connection with federal disclosure and sales practice standards.

For more on the initiative, visit ACLI’s website at www.acli.com or the Ohio Department of Insurance website at http://www.insurance.ohio.gov.

###

About AOLIC: The Association of Ohio Life Insurance Companies (AOLIC) is a Columbus, Ohio-based trade association representing life insurers doing business in the State of Ohio. AOLIC member companies offer life insurance, annuities, pensions, including 401(k)s, long-term care insurance, disability income insurance and other retirement and financial protection products. www.aolic.com.

About ACLI: The American Council of Life Insurers (ACLI) is a Washington, D.C.-based trade association whose 340 member companies account for 93 percent of the life insurance industry’s total assets in the United States, 94 percent of life insurance premiums and 94 percent of annuity considerations. In addition to life insurance and annuities, ACLI member companies offer pensions, including 401(k)s, long-term care insurance, disability income insurance and other retirement and financial protection products, as well as reinsurance. ACLI's public Web site can be accessed at www.acli.com.