Last annuity provider to exit market
The current sole provider, Fidelity Life, is to stop offering annuities due to lack of demand and increasing regulatory pressure.
Chief executive Milton Jennings told the Future of Super conference in Auckland yesterday that the company had only given out 12 quotes over the past year – and the one annuity product sold was to a 95-year-old planning to try to outlive the company’s longevity predictions.
“There’s low demand for annuities in the New Zealand market.”
He said that was driven partly by tax disincentives on the product and partly because people did not think they needed another pension on top of NZ Super. Additional requirements from the FMA, including the need to rewrite the investment statement and prospectus for the product, as well as another disclaimer for directors to sign their name to, made annuities not worthwhile for the company, he said.
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