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period, petitioner collects the premiums on its annuity contracts
(accumulation annuities). Petitioner does not charge fixed
premiums; rather, the annuity holders pay in as much as they
desire. Petitioner invested the collected premiums and
guarantees its U.S. annuity holders, on a yearly basis, a
specific rate of return (one-year rate guarantees). Petitioner
makes primarily 5-year interest rate guarantees to its Canadian
annuity holders. Petitioner's annuity holders are able to
withdraw the accumulated funds from petitioner once annually
during the accumulation period. These withdrawals are subject to
surrender charges. The surrender charges are reduced during the
first 5 to 10 years of each annuity contract's existence but are
always eliminated before the payout period begins.
During the payout period, petitioner pays the annuity
holders fixed periodic payments over the remainder of the
annuitant’s life or over a specified number of years (payout
annuities). Once the payout period begins, petitioner does not
permit early withdrawals.
D. Investment Strategy
Mr. Arthur W. Putz, vice president of investments and
secretary of petitioner, is primarily responsible for handling
the administrative details of petitioner's investment activity.
Donald R. Francis, executive vice president and appointed actuary
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Last modified: May 25, 2011