Volatile stock market propels fixed-annuity sales at banks. (Life/Health).

Banks set a single-month record for sales of fixed annuities in January at $3.2 billion, according to the Kehrer-Jackson National Monthly Bank Annuity Survey.

Banks and thrifts upped their sales over December 2001 by 19%. The previous record of $3.1 billion occurred in October, and sales had slipped in November to $2.9 billion and in December to $2.6 billion. January's sales were 2.1 times the level of January 2001.

Equity-market volatility and a sloping fixed-securities yield curve were primarily responsible for the surge in fixed-annuity sales, said Brad Powell, president of Jackson National Life Insurance Co.'s Institutional Marketing Group, which sponsors the new monthly survey. Powell said Jackson's Optimax 100 product was crediting 386 basis points more than the aver age one-year certificate of deposit. The spread was even greater in February and in March, when it rose to 413 basis points. "When the yield curve is steep like it is today, annuity underwriters like Jackson can credit much higher rates than short-term CDs, because we invest the annuity contributions in longer-term paper," he said.

Fixed-annuity sales in January were 4.3 times greater than variable-annuity sales, according to the survey, conducted by Kenneth Kehrer Associates, Princeton, N.J.