Question-and-Answer Session
Operator
Thank you, sir. The question-and-answer session will be conducted electronically. (Operator instructions) We’ll go first to Steven Schwartz with Raymond James
Steven Schwartz – Raymond James
Hey everybody, good morning.
Jim Noyce
Hi Steve.
Jim Brannen
Good morning, Steve.
Steven Schwartz – Raymond James
A couple of questions. It’s kind of related to SEC 151A. I was reading in this week’s NU I gather maybe you know something about it and could share, maybe not, FINRA 08-24 this would be a notice to members with regards to fixed annuities. There is some fear there that that can be interpreted for it to consider fixed annuities as a security as well. Do you know anything about that?
John Paule
Steve, this is John. I do not. You know clearly there was some concern with Rule 151A that in its broadest interpretation it could include all fixed annuities but the reference to the FINRA rule, I am not familiar with.
Steven Schwartz – Raymond James
Okay. Fair enough. It was in this week’s National Underwriter. Just a quick numbers question. Was the timing difference on index annuities between index credits and proceeds from option settlements, was that positive or negative in the quarter? And did the AEL book of business play a role in this quarter? I think if I remember correctly, it had a negative effect in the first quarter.
Jim Brannen
Steve, this is Jim. Thanks for the question. If I understand the first part of your question in terms of excess hedge – was it excess benefit or own options—
Steven Schwartz – Raymond James
Yes. (inaudible)
Jim Brannen
Yes. It was a tick up from where we were at in the first quarter and Don’s are you pulling a number. Okay. It’s not a number (inaudible) with me, was a tick up from where we were at in the first quarter but not as high as the run rate had been in the previous quarters.
Steven Schwartz – Raymond James
Okay. And then AEL?
Jim Brannen
AEL was positively impacted this quarter by some positive DAC unlocking but overall in terms of their core contribution to the quarter I would say it’s a similar run rate to the last couple of quarters.
Steven Schwartz – Raymond James
Now Yes now I – okay, but I was talking about – wasn’t – was many of the (inaudible) but wasn’t there an issue with some of their – and I imagine it still is, but some of the policies that had reinsured from AEL were under water.
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