QUESTION: I am interested in offshore variable annuity, however I have
searched for the Code authority granting tax deferred status to a
foreign variable annuity yet have found none. Would you be able to
assist me?

REPLY: That's probably because the only difference in a fixed return
annuity and a variable annuity is the method of investing the cash
value, which is more of an issue for the life insurance company than
for the policyowner.

Most of the tax law dealing with annuity contracts is in tax code
section 72 but code section 817 is the main source of law dealing with
variable annuities. That code section provides rules for life
insurance companies that want to issue variable annuities.

An extensive report I wrote a few years back on offshore variable
annuity contracts is available on the Offshore Press subscribers' web
site. Information about subscribing is available at
http://www.offshorepress.com/wealthprotect.htm It's still accurate
except for the information about the various vendors.

An extensive article about abuses in selling variable annuities is
available at
http://www.expertlaw.com/library/finance/variable_annuities.html

Vern Jacobs
www.offshorepress.com