Defined terms for the annuity market and lifetime income landscape.
PE ownership of insurance carriers is the pattern in which a private equity firm owns or controls a life and annuity insurance company through a holding company structure, with the PE owner directing the carrier's investment strategy, capital management, and reinsurance arrangements.
A private placement annuity is an annuity contract designed for accredited or qualified purchasers that is not registered for general public offering, typically structured as a variable annuity with access to institutional investment strategies unavailable in registered products.
Profit margin in annuity pricing is the pricing component that represents the carrier's required return on the regulatory capital it must hold against the contract, embedded in the premium or income calculation rather than charged as a separate fee.
A profit sharing plan is a defined contribution plan under which the employer makes discretionary contributions to participant accounts on a formula the employer establishes, historically funded from company profits though no actual profits are required under current tax law.
A prohibited transaction is a category of dealings between an ERISA-covered plan and a specified list of related parties that ERISA and the Internal Revenue Code bar as a matter of bright-line rule, regardless of whether the transaction is otherwise fair or beneficial to the plan.
