The challenge will have ramifications far beyond the reservation because the insurance industry has been fighting to keep banks from encroaching on its annuity business.

The deemed annual charge applies only to those holdings referable to basic life and general annuity business.

He added to the company's annuity business with the acquisition of American Skandia for about $1.2 billion late last year.

It would be some kind of annuity business and would be a terrible company to work for.

It announced last fall that it planned to leave the tax-sheltered annuity business.

Allmerica, especially, would add to Lincoln National's variable annuity business.

But he explained a drop in the company's 2001 profit forecasts by referring to the problems in the annuity business.

The annuity business has become much more important to insurance companies in recent years as sales of life insurance policies to individuals have slowed.

"They will now go after the annuity business full force."

Total premiums in the company's core life and annuity business, however, rose slightly to $4.7 billion, from $4.56 billion a year earlier.