Description: Author suggests the newly popular Equity-Indexed Annuity product can be transformed into Equity-Indexed Immediate Annuity to serve additional retirement needs.

Description: Recent studies have shown that most Americans are not taking the steps needed to provide for a comfortable retirement. By saving too little and waiting too long to become serious about investing, many baby boomers will need investments with relatively high rates of return to achieve their retirement goals. Historically, such returns have come only from equity based vehicles. This article discusses how Equity-indexed products [EIPs] are well positioned to help address the savings problem.

Description: A review of product and sales trends for variable, indexed and fixed annuities against the current backdrop of low interest rates and record equity market valuations

Description: An Actuarial Analysis of FAS 133 Part 2 by Anson J. Glacy, Jr. from The Financial Reporter, June 2000, Issue No. 42.

Description: This article summarizes some of the areas of concern in developing equity-indexed annuities for small companies.

Description: The objective of this article is to help indexed annuity writers understand the pricing practices and ALM strategies used by their peers in the industry, especially in light of the prevailing low interest rate environment and a possible rise in interest rates.

Description: ASU 2018-12 introduced a new concept called “market risk benefits” (MRBs). MRBs are a new accounting classification for benefits within deposit contracts, offering protection from “other than nominal market risk.” This applies to products with account values, including variable and indexed annuities with guaranteed living or death benefits attached (aka GMxBs). ASU 2018-12 Section 944-40-30-19D mentions both a non-option and an option-based valuation approach to account for MRBs. This article considers the option-based approach. The purpose is to highlight weaknesses in the current application of the option approach to MRBs, propose an alternative method, and consider the benefits of the new approach. The intent of this article is to persuade practictioners / actuaries / accountants that this is a better approach for applying the fair value option method to market risk benefits.

Description: Accounting Standards Update (ASU) 2018-12, commonly referred to as long duration targeted improvements (LDTI), is the most significant GAAP accounting change impacting the life insurance industry in the past 40 years. This article discusses the impact of LDTI on variable annuities (VA) and fixed indexed annuities (FIA) from a product development and in-force management angle. Detailed discussion topics include hedging and ALM, product strategy and development, and pricing. LDTI will cause many VA and FIA writers to re-evaluate their hedging and asset liability management (ALM) strategy following the move to fair value accounting under the new MRB requirement. Stakeholder appetite for accounting volatility and resulting changes to hedging and ALM may trigger changes in product mix and designs. In addition to updating pricing infrastructure to handle the new requirements, pricing actuaries will need to produce analyses to educate stakeholders on the risks and pricing implications of any changes to designs, hedging and ALM.

Description: This article discusses a variety of new developments in the annuity market.