Income reported by public life insurance companies in the third quarter generally show their general financial health is improving, Moody’s Investors Service says.

Sales of life insurance grew year over year, regaining some of the ground insurers lost in 2009, noted Moody’s, New York, in a comment.

In addition, “a number of companies maintained their discipline de-risking variable annuity products, both through repricing and product design changes,” Moody’s said.

Life insurers’ investment losses declined notably compared with the third quarter a year earlier, the agency observed. Losses in residential mortgage-backed securities and commercial real estate continued to be a concern but appeared to be moderating.

“Our outlook for the life sector is stable, although we expect a gradual and uneven recovery influenced by the weak economy,” Moody’s said.

A few life insurers still appear to be struggling, Moody’s found. For instance, Phoenix Companies Inc., Hartford, reported a net loss of $25 million in the third quarter, largely the result of large deferred acquisition costs (DAC). (DAC is what an insurer spends to acquire a customer when it issues a policy and may increase due to low investment returns).