Research firm Kehrer-Limra said Western National Life, an AIG subsidiary, was the top seller of fixed annuities in the third quarter, while the previous leader, New York Life, dropped to third and Transamerica fell to fourth place.But many customers are no longer aware the annuities they buy are backed by bailed out insurer AIG, where sales slid until Western National and another subsidiary, First SunAmerica, dropped references to AIG on their contracts, The New York Times reported Thursday.
The editor of the Insurance Forum, Joseph Belth, said customers were entitled to know which company was backing their purchases. Competitors, meanwhile, are complaining the federal bailout funds given AIG have allowed it to offer higher teaser rates or bonus rates than it might otherwise afford."Some insurers are selling annuities at rates that suggest that they are either building more risk into the investment portfolio than might be prudent, or using this as a way of raising cash," said Gary Wendlandt, chief investment officer and vice chairman of New York Life.