White Paper
Capital redundancy in indexed annuities
By Yan Fridman and Karthik Yadatore
29 August 2022
We estimate that current factor-based statutory capital requirements and capital standards resulted in capital redundancy of approximately $3.4 billion for Fixed Indexed Annuities (FIA) as of December 2021. Our paper analyzes capital redundancy in FIAs and argues that the use of principle-based methods would reduce the cost of capital in FIAs.