Filed Under:Annuities, Variable

CDAs Are Hybrids of an Annuity, Financial Guarantee Product, says NAIC Subgroup

Image, Courtesy AP
Image, Courtesy AP

And it’s a ... hybrid.

Contingent deferred annuities (CDA) are a hybrid product, the NAIC regulatory subgroup working on classifying and evaluating the product, believes at this point, it has announced.

The focus would be on the longevity of the annuitant as opposed to the indemnification of market loss, according to Schirripa.

To reduce the financial guaranty component, companies could restrict exposure to equities and other high volatility investments and retain contractual right to auto-rebalance covered assets (when, and if, losses occur), Schirripa’s presentation suggested.

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Nichole Morford

Nichole Morford
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