Almost three years since inception, the Ralph Stewart-led variable annuity business, Lifetime Income Ltd (LIL), opened for applications last week after earning its final regulatory badge from the Reserve Bank of New Zealand (RBNZ).
The RBNZ handed LIL, which mixes a fund structure with an insurance component, the country’s first variable annuities licence following a lengthy consultation process and formal financial strength assessment (completed early this month).
According to the Lifetime Income Fund (LIF) investment statement, on December 6 this year global rating agency AM Best classified LIL as B- (or ‘fair’) for financial strength and bbb- (non-investment grade) under issuer credit measures.
“The rating reflects LIL’s position as a brand new insurer with no new business,” the investment statement says.
In a statement, Stewart said the firm would begin issuing units in the LIF on December 11 with the first tax-paid income installments due on January 16 next year.
LIF (issued by Lifetime Asset Management – or LAM) offers a guaranteed income for life to investors aged over 65 with the ability to defer payments. Under the current terms, LIF annual income drawdown rates (which are paid fortnightly or monthly) range from 5 per cent for 65-69 year-olds to 6.5 per cent for those aged 80-85.