The U.S. is cracking down on the $54.5 billion market for indexed annuities, tightening standards for a product that has been gaining popularity in recent years. American Equity Investment Life Holding Co., the second biggest seller of such products, fell the most since 2009.

A Labor Department regulation, released Wednesday, toughened the rules for selling more complex products and included indexed annuities among them, a move that wasn’t expected by some industry players, according to Ryan Krueger, an analyst at Keefe Bruyette & Woods. The government will require companies to enter into a contract that discloses conflicts about how brokers are compensated from sales of variable or indexed annuities. Fixed annuities will have fewer hurdles.

President Barack Obama has fought for the tougher standards in an effort to protect millions of savers from receiving conflicted advice. The rules aim to curb the practice of brokers pushing customers into higher fee or commission-based products without disclosing conflicts of interest related to how advisers are compensated for selling those products. They target indexed annuities, products that have broken sales records for the past seven years and now represent almost a quarter of the total annuity market, according to industry group Limra.

“Indexed annuities are a high-commission product like variable annuities, and 60 to 65 percent of industry sales are within qualified retirement plans,” Krueger said Wednesday in a note. “We expect indexed annuity sales to be negatively impacted” as a result.

Retirees at Risk

Indexed annuities are insurance contracts that earn money based on the performance of market indexes and protect against market downturns. Total sales reached a record $54.5 billion in 2015, a 13 percent increase from a year earlier, and Allianz SE’s North American division was the top seller of the products in 2015, Limra said. American International Group Inc. sold about $3.3 billion of indexed annuities last year, while Voya Financial Inc. sold $1.67 billion.

American Equity Investment Life sunk 14 percent to $13.93 as 10:28 a.m. in New York after earlier dropping 18 percent. Indexed annuities are more than 90 percent of the company’s sales, Randy Binner, an analyst at FBR & Co., said in a note Wednesday.

The new guidelines imply that the indexed annuity sellers might be subject to “more onerous legal requirements and compensation caps,” said Binner. “We fully expect a legal challenge from AEL and other indexed annuity writers."

U.S. lawmakers including Senator Elizabeth Warren of Massachusetts have criticized some of the largest annuity providers for the perks they provide to encourage brokers to sell investments that may be more expensive. That compensation structure puts retirees at risk, according to Labor Secretary Thomas Perez.

“This is the case about a system that is structurally flawed. The incentives are not aligned,” Perez said Wednesday in an interview on Bloomberg Television. “The consumers’ best interest is not aligned with the current incentives that result in payments to brokers.”