In short, variable annuities are insured stock accounts where a private insurance company guarantees that investors will not lose money. That guarantee can be expensive to insurance companies, especially when stock market perfumes poorly as is has in past few years.

While actual extent of problems in these areas is not known, some industry observers believe that one or more regulations was violated in sale of majority of variable annuities and variable life insurance polices. The vast majority of sales practice violations are not reported to regulators because investor is not even aware that a violation has occurred. Financial damage, if visible at all, is often not apparent until many years later.