Life Health Annuities Variable Annuities

Zurich Offers to Buy Back Some Variable Annuities

July 03, 2017 at 04:36 PM
Share & Print

Zurich American Life Insurance Company is offering to buy back some of its annuity contracts.

The offer affects holders of Farmers Variable Annuity I contracts with in-force guaranteed retirement income benefit riders, or GRIB riders.

The Schaumburg, Illinois-based unit of Zurich Insurance Group announced the offer today in a document filed with the U.S. Securities and Exchange Commission.

A consumer can qualify for the buy back offer by either surrendering an eligible annuity or exchanging it for an annuity from a life insurer not affiliated with Zurich American, the company says.

Zurich American says it will make the offer available from today through Oct. 31, to consumers who bought their Farmers Variable Annuity I contracts with the GRIB riders after April 30, 2000.

Zurich American says it will pay Farmers Variable Annuity I contract holders who sell back their annuities a price equal to the contract value, minus the value of any outstanding loans, along with an enhancement amount.

Holders under 75 who sell back their annuities can get an enhancement amount equal to at least 20% of the contract value.

Holders ages 75 to 80 can get an enhancement amount equal to 15% of the contract value.

Holders ages 80 and older are not eligible for an enhancement amount.

Zurich American says in the offer announcement that it is making the offer partly because it believes some annuity holders' needs may have changed over time, and partly because it wants to exit this segment of the variable annuity business, to ease some of the capital constraints associated with that business.

"If you accept the buy back offer, we may gain a financial benefit because, for example, the capital we hold against future adverse events can be released on the acceptance of the buy back offer, and we will no longer bear the cost of hedging against market downturns," the company says.

Variable Annuities
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Related Stories

Passive Investing Could Crash the Market, Swiss Re Institute Analysts Warn FINRA Fines BBVA Securities for Failing to Monitor Annuity Exchange Rates How In-Plan Annuity Sales Could Help Retail Advisors 5 Trends in Today's Annuity Market: Equitable Ameriprise Posts 45% Jump in Variable Annuity Sales Brighthouse Asks Court for Help With Annuity Tied to Murder Case

Resource Center

Can Systematic Risk Be Reduced? link

Guide

Can Systematic Risk Be Reduced?

The Business Model Playbook: Mastering Technology for Firm Success link

Playbook

The Business Model Playbook: Mastering Technology for Firm Success

Harnessing AI to Power Advisor-Client Relationships link

White Paper

Harnessing AI to Power Advisor-Client Relationships