Net flows of cash into variable annuities fell to $6.4 billion during the first quarter, down from $7 billion during the first quarter of 2006.

NAVA, Reston, Va., is reporting those figures in its latest quarterly report on the VA market.

Although net sales fell, strong investment returns helped increase VA net assets to $1.4 trillion at the end of the first quarter, up 8.6% from the total recorded a year earlier.

Qualified retirement plans accounted for about 62% of total VA sales premium volume, NAVA says.

Asset allocations at the end of the latest quarter were similar to the asset allocations in place in March 2006, but the percentage of assets invested in balanced options increased to 10.6%, from 8.9%, as the percentage in fixed accounts fell to 18.6%, from 21.3%, NAVA says.