Variable Annuities

  • As you know, VAs have been around since the 1950s, and variable life insurance has been written since 1975 when the Equitable wrote the first policy.

--  John T. Adney, a founding partner of the law firm of Davis & Harman LLP in Washington, DC

2000 - SOA - Separate Account Products in the U.S. and Canada: Comparing Their Design, Regulation, and Taxation, Society of Actuaries - 28p

  • (p302) - William L. Cary, Chairman, Securities and Exchange Commission (SEC) - There are some insurance companies, I think the outstanding one being Metropolitan, which did not want to get into the variable annuity business at all.

1963 / 1964 - GOV (House) - Investor Protection, Harley Staggers (D-WV) - - Part 1 - April 3; November 19, 20, 21, 1963 - 684p

  • Systemic Risk
  • (p48) - Variable annuities have been identified by some as source of systemic risk because some insurers rely on dynamic hedging to hedge embedded guarantees.
    • Since variable annuities offer policy-holders investment upside with financial protection, they pose a number of risk management challenges.
    • Their guarantee features transfer multiple risks to insurers, which must all be managed concurrently: equity market risk, interest rate risk, basis risk and policy-holders’ behaviour risk.

2010 - The Geneva Association - Systemic Risk in Insurance—An analysis of insurance and financial stability, Special Report of The Geneva Association Systemic Risk Working Group - 129p

2018 - AP (Powerpoint) - Insurers as Asset Managers and Systemic Risk, ABFER 6th Annual Conference, Singapore - 32p

  • 2013 03 - The Geneva Association - Variable Annuities—An Analysis of Financial Stability, The Geneva Association - 88p
    • (p55) - 6.  Considerations regarding Variable Annuities and Systemic Risk