Top Story

• State health exchanges run by feds may carry a fee for insurers
  A proposed regulation would require health insurance companies to pay 3.5% of their premiums to the federal government if they sell plans in states that have chosen not to run a health insurance exchange. "Any new fees to pay for the administration of exchanges will add to the cost of coverage, and that is why the focus needs to be on reducing administrative costs, streamlining operations, and avoiding regulatory duplication that will add complexity and increase costs," Robert Zirkelbach of America's Health Insurance Plans wrote in an e-mail. Bloomberg Businessweek (11/30)     

Industry News

• Variable annuities: Why they're a great fit for many
  Living benefits represent the main appeal of variable annuities, but clients should understand the other benefits of variable annuities, according to Eric Henderson. Values such as tax deferral, legacy planning and annuitization options are part of what make variable annuities such a great fit for a variety of clients, Henderson writes. National Underwriter Life & Health (11/28)     

• Expert: Irrevocable life insurance trusts guard heirs from tax hit
  Assigning ownership of a life insurance policy to an irrevocable life insurance trust shields the proceeds from estate taxes by removing the policy from the holder's estate, Dan Beckerman writes. The strategy is effective for a client whose policy is aimed at providing for heirs rather than one who will need to access the policy's cash value, Beckerman writes. The move also is subject to a three-year "look-back period," a time when the policy will revert to the policyholder's name in the event of death, he writes. The Wall Street Journal/Wealth Manager blog (11/30)     

• Survey: Generation Y leads in seeking investment advice
  Eighty-four percent of Generation Y is seeking financial advice, compared with 76% of all Americans, a Merrill Edge study says. Many of those born between 1979 and 1991 have entered the workforce at a time of economic turmoil. "They want to take action," said Alok Prasad, head of Merrill Edge. Reuters (11/29)     

• Other News

• AARP poll: Americans prefer getting retirement statements on paper
  The New York Times (tiered subscription model)/Bucks blog (11/27)     

Investment Trends

• HSAs offer flexibility and tax advantages, expert says
  Health savings accounts offer some advantages over 401(k) plans, including the option to roll over funds at any time, says Kimberly Sexton of Total Benefit Communications. The funds also allow participants a range of investment options as well as death benefits and the ability to use tax-free proceeds for certain non-qualified medical expenses, Sexton says. "Health savings account contributions go in tax-free, grow tax-free and come out tax-free," she says. OnWallStreet.com (11/30)     

• Retirees seek to hedge on health care costs by remodeling homes
  Some seniors who want to avoid the average $3,200 monthly cost of an assisted-living facility are investing money now to make their homes more accommodating. Changes include grab bars in bathrooms, nonslip floors, and making electrical outlets and light switches more wheelchair accessible. "We avoided nursing homes for our parents, and we want it to be the same for our kids," said Richard Hayman, who is spending $110,000 to transform his Maryland home. Bloomberg Businessweek (11/29)     

Policy Watch

• NAIC advances a reserves system to help life insurers' returns
  The National Association of Insurance Commissioners has passed rules that would allow life insurers to calculate future reserves based on computer models through a "principles-based" system that the industry has sought for years. The change, which must be approved by legislators in about 40 states, would ease capital requirements, freeing up funds for other purposes, executives said. "This a significant and historic vote for the NAIC, moving forward on a substantive change in policy," said Thomas Sullivan of PricewaterhouseCoopers. The Wall Street Journal (12/2)     

• Mich. decides against having a state-based exchange
  Michigan's House Health Policy Committee has ended consideration of a measure that would have established a state-run exchange for health insurance after the bill was voted down. Republican House Speaker Jase Bolger cited unanswered questions as a reason. Crain's Detroit Business (free registration) (11/30)     

Hot Topics

Top five news stories selected by NAIFA SmartBrief readers in the past week.

• Expert: Strong year is ahead for guaranteed-income annuities (AdvisorOne)

• Preparing for the 3.8% tax on investment income (AdvisorOne)

• 2012 has brought many new rules for annuities (National Underwriter Life & Health)

• Life insurance industry faces challenging trends, report says (Insurance Networking News)

• Survey: 24% of boomers say they will be able to handle LTC costs (National Underwriter Life & Health)

• Results based on number of times each story was clicked by readers.

Building Your Business

• How to help clients own their decisions
  Advisers must understand how clients think about money and guide them to better financial decisions, United Capital CEO Joe Duran says. The company offers practice tools meant to help advisers empower their clients. "They rent me, but they need to own their decisions," Duran says. Financial-Planning.com (12/3)     

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NAIFA News

• Free NAIFA webinar: Social Security -- what your clients want and need to know
  With 80 million baby boomers eligible for Social Security retirement benefits in the next decade and many in their disability-prone years, it is inevitable that your clients will be addressing Social Security questions and concerns with you. In this webinar presented on from 2 to 3 p.m. Eastern time on Tuesday, Dec. 11, Social Security Public Affairs Specialist Vonda VanTil will explain the various programs administered by Social Security and the 2013 changes. Register now.     

SmartQuote

Look at everything as though you were seeing it either for the first or last time." --Betty Smith, American author