The Life Insurance and Annuities Committee is considering a task force referral on annuities set up in such a way that benefits payments start only when a specified event occurs.
The Life Committee, an arm of the National Association of Insurance Commissioners (NAIC), Kansas City, Mo., may end up discussing matters such as whether there is a real need for the product – a “contingent annuity,” or “synthetic annuity” – and whether the product poses any risks to consumers.
A typical contingent annuity 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.
The New York State Insurance Department disapproved of a contingent annuity concept proposal in 2009, saying a contingent annuity contract would be a financial guaranty insurance that cannot be sold in New York state.
The NAIC’s Life Actuarial Task Force has been talking about the products for months.