State insurance regulators have expressed concern about the approach some life insurers have taken to getting approval for contingent annuity programs.

The Life Actuarial Task Force at the National Association of Insurance Commissioners (NAIC), Kansas City, Mo., has published an account of debate on the topic in a collection of task force conference call minutes posted on its section of the NAIC’s website.

The task force recently asked the NAIC’s Life Insurance and Annuities Committee to look at the products.

A contingent annuity is a product that guarantees access to a stream of withdrawals, then, at a certain point, produces a stream of income when annuity assets fall to a designated level.

During a conference call, the state insurance regulators and others who participated talked about whether the contracts are really financial guarantee arrangements; how the Internal Revenue Service and the U.S. Securities and Exchange Commission view the contracts; and use or non-use of separate accounts in connection with the contracts.

Participants also talked about concerns about what some insurance regulators said might be a “misleading manner of filing with the various state insurance departments.”

A representative of a contingent annuity subgroup that reviewed the products said the subgroup had found instances of contingent annuities being filed as variable annuities in some states and as other types of annuities in other states. In one state, regulators found that a company used a filing exemption to bypass the usual review process.

- Allison Bell

Other contingent annuity coverage from National Underwriter Life & Health: