Sheryl J Moore

July 30, 2010 | Investment News

Copyright 2010 Crain CommunicationsAll Rights Reserved Investment News
July 26, 2010
NEWS; Pg. 0019
326 words
Indexed annuities regain AIG unit after banner year; Western National Life is relaunching Power Index Annuity
Darla Mercado

Western National Life Insurance Co. has jumped back into the indexed-annuity market after more than 18 months on the sidelines.

The subsidiary of American International Group Inc. stopped selling equity-indexed annuities in late 2008. At the time, many insurers were curbing sales of the products in order to build up capital.

But a banner 2009 for indexed-annuity sales has forced Western National to reconsider its strategy.

The firm this month relaunched its Power Index Annuity, a traditional indexed annuity.

We felt that re-entering the market would be a great way to diversify our product offerings, said Western National Life spokeswoman Linda Skolnick. Our goal is to build sales to a level where Western National is a top-five index annuity distributor in the bank channel.

That is an ambitious goal, considering that at the end of 2007, the insurer, then known as AIG Annuity, was in 19th place among sellers of indexed annuities, according to data from AnnuitySpecs.com.

But the insurer may get a boost in sales, thanks to a regulatory action. This month, the U.S. Court of Appeals for the District of Columbia Circuit chose to vacate a rule that would have placed indexed annuities under the Securities and Exchange Commission’s jurisdiction.

Sales of indexed annuities should rise now that it is clear that they will be treated as fixed-insurance products, said Sheryl J. Moore, president of Advantage Group Associates Inc. and AnnuitySpecs.com.

Many people who sell indexed annuities in banks are registered representatives, and with the securities status of indexed annuities in question, they didn’t want anything to do with it until they knew, she said.

Some $30.2 billion in indexed annuities were sold last year, up $3.5 billion from 2008, according to Beacon Research Publications Inc. Sales in this year’s first quarter, however, were $6.7 billion, a decline of 5% from a year earlier.

Originally Posted at InsuranceNewsNet on July 26, 2010 by Darla Mercado.