According to filings with the Securities and Exchange Commission, Jackson National Life Insurance Co. and Pruco Life Insurance Co., an annuity unit of Prudential Financial Inc., two of the largest variable annuity product manufacturers have announced the closure of L-share sales in certain variable annuities.

Jackson National closed its Perspective L Series contracts to new purchasers as of July 11 and Prudential is closing its Premier Retirement L Series contracts August 8.

Why the changes FINRA announced in January 2015 that variable-annuity sales practices would be a target in its regulatory and exam priorities, specifically those relating to L shares.  In addition, the Department of Labor is cracking down on sales in retirement accounts due to their recent  fiduciary rule put in place to protect investors.

Consequently, the variable annuity industry has seen major losses in 2015, with $133 billion in total sales,  and Limra, a worldwide industry group for the financial services industry, is projecting another 15% to 20% drop in 2016.

L-share variable annuities may seem attractive due to the shorter surrender periods (four years) than a B share, which will typically carry a seven-year surrender-charge schedule. But a typical L-share variable annuity also has higher ongoing base contract charges and carries a trailing commission. Even though they may be sold as a long-term income play in retirement, it may not be the best option for investors with the long term in mind.

The foregoing information, which is all publicly available, is being provided by The White Law Group. The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Franklin, Tennessee.

For a free consultation with a securities attorney, please call the firm at 888-637-5510. For more information on The White Law Group and its representation of investors, visit http://whitesecuritieslaw.com.