Standard Life Assurance Co. of Canada is temporarily suspending new sales of Ideal Income Series, its guaranteed lifetime withdrawal benefit product (GLWB), effective April 16.
The Montreal-based company made the announcement on Wednesday.
The insurer believes that its decision is a responsible one for its clients, advisors and the business given the current economic and regulatory environments.
“Our industry is challenged by historically low interest rates, market volatility and strengthened regulatory capital requirements,” says Sylvain Messier, vice president, strategy and development at Standard Life.
Since guaranteed minimum withdrawal benefit products were introduced in Canada in 2006, several industry players altered their products. The first companies to offer GMWBs, including Manulife Financial Corp., Sun Life Financial Inc. and Desjardins Financial Security have re-engineered their products to help deal with capital-adequacy concerns caused by changing market and regulatory conditions.
“Standard Life believes that another round of changes to this type of product is inevitable. 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,” adds Messier.
The suspension will remain in effect until the economic and regulatory environments improve. In the meantime, Standard Life says it will continue to explore alternatives.
Standard Life says its segregated fund offering is core to the company’s retail business and remains a significant driver for growth.