Insurers eye American Skandia's VA securitization. (American Skandia Life Assurance Corp.'s variable annuities)

National Underwriter Life & Health-Financial Services Edition, January, 1997 by Connolly, Jim

American Skandia Life Assurance Corp. has issued a debt offering worth $42 million to securitize packaged fees for a block of the company's variable annuities. The securitization is believed to be a first in the variable annuities field. Variable annuities need a large cash flow to pay financial advisers. American Skandia will support the rest of its growth needs through reinsurance arrangements and internally generated cash.

Taking a cue from the mutual fund industry, American Skandia Life Assurance Corp. recently packaged fees in a block of its variable annuities and securitized them in a debt offering that realized $42 million.

American Skandia, based in Shelton, Conn., called its securitization of mortality and expense risk charges a "first" and other...

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