Defined terms for the annuity market and lifetime income landscape.
A mortality and expense charge (M&E) is the bundled annual fee on a variable annuity contract's account value that compensates the carrier for the mortality risk under the contract's death benefit and for administrative expenses, typically expressed as a percentage charged daily against subaccounts.
A multi-year guaranteed annuity (MYGA) is a deferred fixed annuity in which the insurer guarantees a fixed crediting rate for a specified multi-year guarantee period, after which the contract may be renewed at a new rate, surrendered, or annuitized into an income stream.
NAIC model regulation is a template rule developed by the National Association of Insurance Commissioners that individual states may adopt in whole, in part, or not at all, providing a mechanism for coordinated regulatory standards across state insurance departments in a state-primary system.
A non-qualified annuity is an annuity contract funded with after-tax dollars held outside any tax-advantaged retirement account, where only the earnings portion of each distribution is taxed as ordinary income and the return of the original premium is tax-free.
The nonforfeiture benefit is the contractually guaranteed minimum value that a contract owner can recover from a deferred annuity, established under state nonforfeiture law and operating as a floor on the amount the carrier may charge through surrender charges and other cost-structure mechanisms.
