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June 01, 2003 at 08:00 PM
Industry Regroups After Failing To Get Annuities In The Tax Cut Bill
By
Washington
The fallout from the failure of Congress to include variable annuities in the dividend tax cut provision of the economic stimulus bill continued last week as life insurance representatives pressured Congress and the administration to solve the problem.
Most notable, perhaps, is a letter to Treasury Secretary John W. Snow from Maurice R. Greenberg, chairman of New York-based AIG.
The letter was first published by BNA.
In the letter, Greenberg notes that the tax bill “did not cure the problem for variable annuities, hence the life insurance industry will be at a disadvantage against the mutual fund industry.
“There are tens of thousands of annuitants that will feel more than mildly disappointed given the assurances that we and others made that this problem would be cured,” the letter adds.
“AIG and I personally have supported the presidents tax bill, as I told you I would,” the letter says. “What suggestions do you now have, John, to help put right a very major wrong?
“When we last spoke, I was assured that this problem would be solved,” the letter says. “I relied on that fact. I am sorry to add to your problems, but this is an important issue.”
Meanwhile, Frank Keating, president of the American Council of Life Insurers, Washington, says Congress needs to focus on retirement security in the wake of the tax cut bill.
“The annuity can significantly boost the retirement security of millions of Americans,” Keating says in a statement.
“Unfortunately, Congress failed to include annuities in the tax cut legislation,” he adds. “ACLI strongly urges Congress to provide incentives that encourage more people to secure lifetime income through an annuity.”
