Who assumes the investment risk with a fixed annuity contract?

In the context of a fixed annuity contract, the insurer is responsible for assuming the investment risk. This means that the insurance company guarantees a specified rate of return on the funds invested by the policyholder. The policyholder does not need to worry about fluctuations in market performance or investment decisions; rather, they can rely on the insurer to deliver the promised payments.

The fixed annuity provides a level of security and predictability, as the insurer pools the funds from multiple policyholders and makes investment decisions on their behalf. This structure allows individuals to receive a steady income stream, typically during retirement, without facing the risks associated with variable investments.

The involvement of other parties, such as state insurance commissioners or independent advisors, primarily relates to regulation and financial guidance, rather than directly impacting who bears the investment risk.