Products July 14, 2023

Fidelity Starts Reinsurer Focused on PRT, Retail Annuities

The investment giant has registered a Bermuda affiliate to focus on the booming pension risk transfer and retail annuity markets, according to a filing.

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Fidelity Investments has formed a Bermuda-based reinsurance business to focus on the pension risk transfer and retail annuity markets, according to recent regulatory filings.

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Soteria Reinsurance Ltd. was registered as a Class C insurer by the Bermuda Monetary Authority in June, designating it as a long-term reinsurer with total assets of less than $250 million. The reinsurer is owned by Soteria Reinsurance Holdings LLC, a Fidelity-owned entity also based in Bermuda, according to a filing with the Securities and Exchange Commission from late March.

Soteria Reinsurance is intended to focus on affiliated reinsurance of U.S. retail fixed annuities and pension risk transfer opportunities “of existing and new Fidelity Investment Life Insurance Company (FILI) business,” according to Fidelity’s filing.

Bermuda is a popular domicile for reinsurance firms, that are often used to transfer or share risk with other insurers, the island makes up 36% of the global reinsurance market, according to the Association of Bermuda Insurers and Reinsurers.

Neither Fidelity nor Soteria responded to request for comment. The March brochure noted that the information had not yet been approved by the SEC, and Soteria’s website lists that information is “coming soon.”

Both the pension risk transfer market and retail annuities have been breaking records due in part to rising interest rates and market volatility.

In the first quarter of 2023, total U.S. single premium PRT sales hit a record for the start of any prior year at $6.3 billion, a rise of 19% from Q1 2022, according to the most recent data from LIMRA.

There have been warnings, including from worker unions, about the safety of pension buyouts in maintaining the long-term viability and success of defined benefit pensions. The Department of Labor requires fiduciaries to select the “safest available annuity” provider when completing a pension risk transfer and has warned that reliance solely on ratings provided by rating services are not sufficient to determine the creditworthiness of an insurance company.

On July 18, the DOL’s ERISA Advisory Council is hosting a hearing and taking public comment on the department’s Interpretive Bulletin 95-1, which lays out the fiduciary standards for selecting an annuity provider for a defined benefit pension plan. Representatives of labor, insurance, benefits and public policy organizations are scheduled to testify.

Annuity sales have also been on a tear, according to insurance association LIMRA. The insurance-backed investment products hit an all-time high in the first quarter of 2023 at $93 billion, a 47% jump from the same period in 2022.

Deals & People July 14, 2023

Retirement Industry People Moves

Perigon selects Hasan as CIO; State Street appoints Donohue as head of sustainability; GoldTree hires Plotke as principal.

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Perigon Wealth Management Names Hasan as Chief Investment Officer

Rafia Hasan

Perigon Wealth Management announced the appointment of Rafia Hasan as chief investment officer to support its national growth strategy.

“Rafia’s years of diversified industry experience and exposure to rapidly growing RIAs brings an incredible perspective and strategic approach to our team,” Arthur Ambarik, CEO of San Francisco-based Perigon Wealth Management, said in a statement.

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Hasan will be responsible for enhancing Perigon’s investment strategy, bolstering its investment team and supporting the firm’s growing adviser team. She was most recently the CIO of Wipfli Financial Advisors, an RIA firm with $5.5 billion in client assets, where she led the five-person investment and trading team.

State Street Promotes Donohue to Oversee Sustainability Efforts

State Street Corp. announced it has appointed executive vice president Jessica Donohue as head of global investment insights, sustainability and impact, overseeing the firm’s sustainability efforts.

For more than two decades, Donohue has held a variety of senior roles with State Street, including leading investor behavior research at State Street Associates. She succeeds Rick Lacaille, who announced his retirement earlier this year. Donohue will report to Lou Maiuri, president, chief operating officer and head of investment services.

“Jessica’s background in research and investment-related insights, coupled with her deep understanding of clients’ unique challenges and the market overall, is precisely what our clients need,” said Maiuri in a statement.

GoldenTree Asset Management Hires Plotke as Principal in Newport Beach

Chad Plotke

GoldenTree Asset Management announced the hiring of Chad Plotke as a principal in Newport Beach, California.

Plotke will focus on business development, covering relationships such as family offices, corporate pensions, health care organizations, endowments and foundations. He will report to Kathy Sutherland, CEO and partner in GoldenTree. Plotke joins GoldenTree from PIMCO, where he was an executive vice president and account manager.

“Chad brings nearly 15 years of strategy and business development experience across asset classes to GoldenTree and we are excited to welcome him to the team,” Sutherland said in a statement.

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