An upcoming indexed annuities industry report may not be as relevant to current market conditions as the authors would like for it to be.
The Life Insurance and Annuities Committee at the National Association of Insurance Commissioners, Kansas City, Mo., has given that warning to the NAIC’s executive committee.
The committee agreed to adopt a report developed by the Indexed Annuities Working Group, part of the Life Insurance and Annuities Task Force, June 14, at the NAIC’s summer meeting in Minneapolis.
The NAIC plans to make the report available to the public sometime in the next few weeks.
The working group was supposed to survey insurers about indexed annuities sales and marketing practices.
Iowa insurance regulators ran the working group’s survey. In December 2008, they asked 69 companies with domiciles in 22 states for data on their annuity programs, including indexed annuity programs. Responses were due Feb. 13.
Regulators received 50 responses, and those insurers wrote about $67 billion in fixed annuity premiums in 2005, 2006 and 2007, Life Insurance committee officials say.
But, since Iowa issued the data call, “significant changes have taken place within the annuity industry,” committee officials say. “Twelve of the companies have either left the annuity business or have gone into rehabilitation. Sales of variable annuities have decreased, and sales of fixed annuities have increased, and that may make the making the information gathered in this data call of what is being sold not as relevant as if the market had not changed.”
In addition, “the top 10 index writers have changed because of some pulling back from the market or capping of their sales for 2009,” officials say. “The top 10 writers in the data call may not reflect the top writers in the current market environment. It is anticipated that the market will continue to change throughout 2009.”
When the working group report comes out, it will cover topics such as premium volume; premium volume by distribution channel; premium volume by age group; company suitability rules and procedures; and use of suitability forms.