Insurable Interest Canadian Insurance Blog

Mark Zuckerberg passed Elon Musk on Friday to become the third-richest person in the world, the first time since 2020 the arch-rival billionaires have held those positions. Musk, who ranked first on the Bloomberg Billionaires Index as recently as early March, fell to fourth after Reuters reported Tesla Inc. had canceled plans for a less-expensive car, sending shares lower. (Musk denied the report.) That followed news earlier in the week that Tesla’s vehicle deliveries fell in the three months through March, their first year-over-year decline since the early days of the Covid pandemic. Musk’s wealth has shrunk by $48.4 billion this year, while Zuckerberg has added $58.9 billion to his fortune as Meta Platforms Inc. climbs to fresh highs, including a new record on Friday. It’s the first time Zuckerberg has broken into the top three on Bloomberg’s ranking of the richest people since Nov. 16, 2020, when he was worth $105.6 billion and Musk’s fortune was $102.1 billion. Musk now has a net worth of $180.6 billion; Zuckerberg’s is $186.9 billion. The reversal of the wealth gap between Musk and Zuckerberg, which was as big as $215 billion in November 2021, illustrates how once-hot electric vehicle stocks have been usurped...

What You Need to Know The new regulations would apply to Medicare Part D drug plans as well as Medicare Advantage plans. CMS shows producer initial enrollment comp might increase to $726 in 2025, from $611 this year. CMS backed off from a complete ban on marketer lead sharing but will toughen consumer consent rules. Medicare Advantage program managers have completed final regulations that could lead to an overhaul of pay for agents, brokers and field marketing organizations starting with the annual enrollment period for 2025 coverage. The final regulations call for increasing maximum producer compensation for an initial plan enrollment by $100 — including the cost of the training services, technology services and other support services provided by FMOs in the compensation maximum. If implemented as adopted, the final regulations will also apply to the producers and FMOs selling Medicare Part D prescription drug plans. The rule package would also require one Medicare plan marketing organization to get clear permission from a consumer before sharing the consumer’s information with other plan marketing organizations. At press time Friday, health insurance distributors like eHealth and industry groups like the National Association of Benefits and Insurance Professionals were still digesting the 1,327-package. What...

Platform provider Pontera says it’s formed a business relationship with Ameritas Advisory Services, through which Ameritas-affiliated advisors will be able to make trades and otherwise manage their clients’ workplace retirement plan accounts. Ameritas financial professionals will be able to use Pontera’s technology to manage their clients’ 401(k)s, 403(b)s, 457(b)s and other workplace retirement accounts, according to a recent announcement. Advisors can also monitor and rebalance plan accounts as part of a comprehensive investment plan. Working with Pontera gives Ameritas financial professionals more choice in the technology they can use to help deliver holistic services to clients, said Brandon Mann, president of Ameritas Advisory Services. “With the addition of the Pontera platform, our financial professionals can provide holistic, personalized investment advice powered by greater visibility into their clients’ 401(k)s and other workplace-sponsored plans,” Mann said, adding that Americans are increasingly concerned about retirement security amid higher inflation and market uncertainty.

The fee-for-service model has emerged as a mainstream opportunity for advisory firms to attract next-generation clients, a previously untapped client market, according to a report from AdvicePay. The report suggests three ways that advisors can incorporate fee-for-service financial planning into their larger practices and appeal to new clientele. Young investors may not yet have significant financial assets, AdvicePay said, but they are reaching a stage in their lives where they have the financial wherewithal to pay for advice directly from their income. And with the right technology in place, scalability becomes achievable. The fee-for-service model enables advisors to be flexible when pricing their services. In addition, the model’s transparency fosters trust and helps clients understand the value they are receiving. In a deep dive into some 380,000 transactions on its platform, AdvicePay found that in 2023, average pricing for monthly subscriptions was $265, a 6% year-over-year increase. Quarterly recurring fees averaged $968, a 1.6% increase from 2022. Single one-time payments averaged $1,578, up 6.7%. AdvicePay noted that these results argue for choosing a subscription model over one-time payments, as the former can lead to a substantial increase in revenue generated per client, up to 2 1/2 times higher. This, in...

What You Need to Know When interest rates fell, insurers began using volatility control indexes to cut option costs. Now, interest rates have popped back up and the volatility control indexes are still here. The result: Insurers have extra cash they can use to increase par rates. The owner of a fixed index annuity (FIA) can tie its crediting rate to the performance of one or more benchmark or risk control indices. If an FIA contract has a participation rate, or par rate, over 100%, that means the owner can get a boost to the crediting rate that’s bigger than the percentage increase in the corresponding index. In recent years, the participation rates, or par rates, for fixed index annuities have risen substantially. It is no longer uncommon to find par rates over 100%, which is generally a good thing for returns, and that has led to some financial professionals and consumers proclaiming, “It must be magic!” But it isn’t. The Problem The climb of par rates has coincided with the rise in credit yields and here’s why. During the Global Financial Crisis, the Federal Reserve Board and other central banks lowered interest rates to stimulate the economy. Both bond...