How does the law protect annuity investments?
In order to safeguard the funds of annuity contract holders or policy owners, State Laws demand the insurance companies to meet strict financial requirements. According to these legal financial requirements, the insurance companies are legally bound to set up a reserve, which at all times must be equal to the withdrawal or surrender value of their total block of annuity policies or contracts i.e. the annuity providing insurance companies must set aside funds equal to the surrender value of every annuity contract in force. Additionally the state laws also require certain levels of capital and surplus to further protect the annuity holders or policy owners.
