Insurance

The Reinsurer Swiss Re has provided the first public-private longevity transaction with a U.K.-based public sector pension fund . Swiss Re is essentially providing longevity insurance to 11,000 of the current pensioners under the Royal County of Berkshire Pension Fund. Swiss Re will assume the "floating" annuity payments and longevity risk for the 11,000 pensioners in exchange for an ongoing fixed premium. The Royal County of Berkshire retains control over the plan assets and the plan...

The Securities and Exchange Commission (SEC) has agreed to a two year "stay" on SEC Rule 151A. SEC Rule 151A is a contentious rule that, from a regulation standpoint, would treat fixed indexed annuities as securities rather than insurance products. The securities regulation would be under FINRA oversight. The stay basically postpones the rule's proposed January 12, 2011 effective date for a period of two years. Source: Wall Street Journal Full Story

Variable annuity net asset values have recovered to pre-financial crisis levels. Buoyant capital markets over the past several months have resulted in the first increase in variable annuity net asset values in fifteen months. Gross variable annuity sales in the third quarter of 2009 were $31 billion. Qualified sales were $20.8 billion while non-qualified sales were $10.2 billion. Net sales of variable annuities in the third quarter were only $2.8 billion, which begs the question of why there...

The Pension Protection Act of 2006 has a provision that will allow for tax free long-term care payments from an annuity product. The law will also allow for Section 1035 Exchanges of older annuity products into the new hybrids. The combined or "hybrid" product has been in development within insurance companies over the past several years. The anticipated launch date for these new products is January 1 2010--the date that the provision in the Pension Protection Act is intended to go into effect...