NU Online News Service, Jan. 15, 8:16 p.m. – Annuity & Life Re (Holdings) Ltd., Hamilton, Bermuda, says it is feeling the effects of low investment returns on a large annuity reinsurance contract.
The reinsurance contract, which is managed by another reinsurer, backs annuities that offer minimum interest rate guarantees.
Annuity & Life will take a $33 million charge for the fourth quarter of 2001 to cover costs related to the minimum rate guarantees, the company says.
XL Capital Ltd., Hamilton, which controls 13% of the equity voting power at Annuity & Life, has agreed to provide up to $10 million in additional protection against losses on the reinsurance contract, according to Annuity & Life.
Annuity & Life did not immediately identify either the ceding company or the name of the company or companies that wrote the underlying annuities.