Guidelines Set for Tracking Annuity Productivity.

The National Association for Variable Annuities has approved guidelines for reporting variable product net flows.

The Washington, D.C.-based association said groups that track the growth of variable life and annuity products may overlook some of the money flowing into and out of them. For example, many contract owners put money into a fixed-interest account and then dollar-cost average the money into stock or bond funds over six to 12 months, said Mark Mackey, NAVA president and chief executive officer. Dollar-cost averaging can account for as much as 70% of new money flowing into variable products, he said. The new guidelines are designed to capture all of the data.

The guidelines account for other variable-product assets, such as unregistered group-annuity contracts and structured-settlement variable assets. "The omission of any or all of these variable-product assets would present an incomplete picture of the industry's net flows," Mackey said.

The guidelines require that product outflows include all benefit payments, annuitizations and exchanges with another company (as permitted under Section 1035 of the tax code). Transfers from fixed accounts to variable accounts would be excluded.

The Variable Annuity Research & Data Service, Marietta, Ga., has agreed to follow the guidelines.