Annuity rules.

As part of recent investigations into companies that sell variable annuities, the Securities and Exchange Commission this month proposed new standards lot sale practices, disclosure and training for deferred variable annuity products.

The SEC and National Association of Securities Dealers. the securities industry trade group, have received a large number of complaints from individual investors about variable annuities, a complex investment product that allows tax-deferred treatment of earnings, a death benefit and an annuity payout that can provide guaranteed income for life.

A variable annuity's rate of return varies with the underlying stock, bond or money market investment. Generally, such products include sales fees, surrender lees and a host of other fees.

Because of their complexity, the SEC called variable annuities "unsuitable" for older people and cited instances when individuals had to mortgage their homes to purchase products pitched by brokers.

The insurance industry has embraced variable annuity products and investments by Americans in them have jumped 20 percent in the past year to $985 billion.

The NASD advised investors not to invest in variable annuities within individual retirement accounts, a common practice in the insurance industry, because the annuity provides no additional tax advantage.