The mutual fund industry has seen a marked bounce-back in the last few quarters, but despite high hopes, 2003 has turned out to be another year that the annuity industry would prefer to forget. Variable annuity sales are starting to recover and fixed annuities sales finally started to decline because of poor yields, and variable life remains the runt of the litter that implacably suffers from failure to thrive.

This year has been about two words: guarantees and consolidation. They both address the fundamental viability of the business and the "rationalization" of the industry. Maybe the rush in the 1990s to manufacture variable annuities didn't make sense.

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