Standard Life has announced it is temporarily suspending new sales of its Guaranteed Lifetime Withdrawal Benefit product (GLWB), the Ideal Income Series. The suspension of sales takes effect April 16, 2012.
“Standard Life believes that another round of changes to this type of product is inevitable,” said Sylvain Messier, Vice-President, Strategy and Development at Standard Life. “Under these conditions, we are suspending new sales of our GLWB and concentrating on solutions that address client needs and meet advisor expectations over the long term.”
Read: What’s next for GMWBs?
Standard Life’s suspension of GLWB sales will “remain in effect until the economic and regulatory environments improve,” the company says. “In the meantime, Standard Life will continue to explore suitable alternatives.”
Since their introduction to Canada in 2006, GLWBs and guaranteed minimum withdrawal benefit (GMWB) products have undergone several revisions.
The insurance industry has struggled to keep up with the “long tail” commitments associated with these products, as interest rates have remained at historic lows and equities have proven too volatile.
At the same time, regulators have increased the amount of capital insurers must keep on their books, further limiting their ability to take on risk.
The Ideal Income Series (GLWB) is part of Standard Life’s Ideal Segregated Funds – Signature Series family, which includes the Ideal 75/100 and the Ideal 100/100 Series that provides capital protection at maturity and on death.
Standard Life says its seg fund shelf is core to the company’s retail business and remains a significant driver for growth. The company exited the individual life and critical illness market in November 2011, saying it would focus on group sales, seg funds, and mutual funds.
“We are a core pension delivery company; it’s really at our heart,” David Nish, CEO of Standard Life PLC, said last year. “I’ve been looking a lot at how we operate, how we structure ourselves, and really trying to get the group working with much more energy looking forward.”