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Life Health > Annuities

NAIC: CDAs are Annuities to be Sold by Insurers

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Contingent Deferred Annuities are annuities, best written by life insurance companies, but the adequacy of laws and regulations protecting consumers and insurers’ solvency must be examined, according to the NAIC’s CDA Subgroup.

The Subgroup had also suggested revisiting reserves and capital rules of not only CDAs but variable annuity riders with guaranteed lifetime withdrawal benefits (GLWB), but Connecticut Insurance Commissioner Tom Leonardi said a new group charged with examining the adequacy of solvency and consumer protection laws is confined only to CDAs.

The Life and Annuities (A) Committee of the NAIC adopted the recommendation of the CDA Subgroup determination that CDAs are life insurance products subject to existing state laws and regulations applicable to annuities, but created a new working group to explore these products’ risk further.

MetLife has been a staunch opponent of CDAs as insurance products, and call the products very risky, warning regulators about other insurers who might underwrite them. Other insurers, including Prudential, support classifying CDAs as annuities.

 CDA Subgroup Chair and New Jersey’s chief actuary Felix Schirripa said in a presentation to the A Committee that “now is the time” to revisit the rules on the books and make sure CDAs are foolproof.

CDAs and GLWBs are hybrid/leveraged products best written by life insurers, he said, classifying them as insurance products at the same time as apparently calling them up for a review.


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