Insurance companies, grappling with the growing challenge of market timing activity in their variable annuity sub-accounts, are taking a conciliatory approach compared with that many mutual fund companies have adopted towards market timers.

Insurers face a dilemma. Insurance companies want to provide enough flexibility to brokers and other advisors so that they can shift client money between investment sub-accounts as they deem necessary. Investment managers, charged with investing the assets held in variable annuity sub-accounts, are not opposed to variable annuity providers offering that flexibility.

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