In a surprising move, CNA Life of Chicago has hatched an alliance with American Airlines to offer AAdvantage Program airline mile awards to investors of its newly registered variable annuity. This appears to be the first time an annuity sponsor has tagged on such an incentive program.

The annuity, registered last month, is underwritten by Valley Forge Life Insurance Company of Nashville, Tenn. a CNA affiliate. The multimanaged variable annuity will award American Airline miles for the initial and possibly subsequent investments, according to the insurance company in its preliminary Sept. 21 SEC registration filing.

As for incentive airline mileage programs, while the CNA annuity partnership with American Airlines is novel, it's not a unique concept. Since 1991, American has sponsored three of its own money funds, all of which sport special share classes that award free travel miles based upon purchases. In 1998, Credit Suisse Warburg Pincus followed suit and debuted two WorldPerks money funds which also awards frequent investor miles.

But investors aren't plowing their life savings into the funds just to earn rewards, said Peter Crane, VP and managing editor at iMoneyNet of Boston, which tracks money fund asset flows. "Money fund investors are interested in safety, liquidity and yield, in that order. Miles evidently aren't high on the priority list," Crane said.

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