MetLife is not only standing firm in its argument that contingent deferred annuities (CDAs) are instead financial guaranty products, it is ringing the solvency bell as a warning to insurance regulators about other life insurers who might underwrite the product as an annuity.
Metlife said as much in a letter to the NAIC on Jan. 18. Regulators weighed in on a conference call on Jan. 19, struggling with the product’s classification, as MetLife and its business rival (but usual regulatory ally) Prudential Insurance Co. of America prepared to go to the mat with their positions.
Supporters of the product as a CDA raised the longevity protection element.
“Measurement and management of the risk (including hedging) associated with the guaranty on a CDA can be a more difficult undertaking than with variable annuities with living benefits,” MetLife argued.