Allianz Life Insurance Company of North America has recaptured its position as the No. 1 seller of equity- indexed annuities in the United States in the third quarter of 2009.

Total industry sales of these retirement-income products rose to $7.5 billion, a gain of 11.3% from the same period a year ago, according to AnnuitySpecs.com, a firm that tracks the data.

Allianz Life, a unit of Germany's Allianz SE, recorded sales of nearly $1.4 billion and an 18.5% market share.

Aviva USA, a unit of U.K.-based multiline insurer Aviva plc, became top seller of indexed annuities in the first quarter of 2008, overtaking Allianz Life, the long-time sales leader. Aviva USA dropped to fifth place in the third quarter.

Gary C. Bhojwani, president and chief executive officer of the Minneapolis-based Allianz Life, told BestWire, he's "thrilled that we continue to be a source of reliability for our customers and producers, especially at a time when so many other insurers have come and gone."

The company recently introduced a new indexed annuity, called Endurance Elite, which offers protection of principal, accumulation potential, and retirement income that can increase and be made available after as little as five years, said Emily Porter, a spokeswoman for Allianz Life. "This product is truly based on consumer demand," she said. The financial crisis has caused people to be more cautious about saving for the future, Porter said.

Aviva USA posted sales of $670.5 million and an 8.8% market share, according to AnnuitySpecs.com. Sales were down 66% from the same period a year ago, and it was the only company in the top five to show a decline from last year's third quarter.

Chris Littlefield, CEO of the Iowa-based Aviva USA, said that in 2009, the company's business strategy has "focused on moderating our rapid pace of growth in order to conserve capital." For the indexed annuity market, Aviva still holds the No. 1 ranking for year-to-date sales, with a 20.3% market share, he said.

"We believe that by prudently growing our business, Aviva will maintain the best possible financial position for the future," Littlefield said. "Taking this long-view benefits our customers, distribution partners and producers."

Coming in second place was American Equity Investment Life, with sales of $953.2 million and a 12.6% market share, according to AnnuitySpecs.com. Lincoln National Life Insurance claimed the No. 3 spot, with sales of $859.2 million and an 11.4% market share, while Jackson National Life Insurance took fourth place, with sales of $769.4 million and a 10.2% market share.

"The big story this quarter is the shake-up in rankings among the indexed annuity carriers," said Sheryl J. Moore, president and CEO of AnnuitySpecs.com, in a statement. While some companies' sales are up more than 75%, others are down almost 60%, she said.

In December 2008, the U.S. Securities and Exchange Commission voted to reclassify these retirement-savings and income products as securities, not insurance.

Under SEC Rule 151A, indexed annuities would be treated as securities if amounts payable by the insurer are more likely to surpass amounts guaranteed under the contract (BestWire, Nov. 21, 2008). Effective Jan. 12, 2011, insurance carriers would be required to file their products with the SEC and offer them via a prospectus (BestWire, Dec. 17, 2008).

But a ruling in July by the U.S. Court of Appeals for the District of Columbia Circuit required the SEC to reconsider its ruling -- a partial victory for insurers seeking to reverse the SEC's decision, though maybe only a momentary one. The court ruled "that the SEC failed to properly consider the effect of the rule upon efficiency, competition, and capital formation. Accordingly, we remand the rule for reconsideration" (BestWire, July 21, 2009).

But, the court didn't find that the SEC made a mistake in deciding that the indexed annuities should fall under the Securities Act of 1933.

Moore told BestWire that proposed legislation at the federal level, called the Indexed Annuities and Insurance Products Classification Act of 2009, would ensure that 151A is "undone" and the fixed insurance status of indexed annuities and indexed universal life "is permanently secured."

The industry is now asking people to contact their legislators, and ask them to co-sponsor S1389 and HR 2733, the identical bills in the House and the Senate, she said.

With indexed annuities, an insurance company invests most of the principal in bonds to ensure the policy will generate a small annual return, but the insurer uses a small portion of the premium to buy options in a stock market index. Options that are exercised can result in additional interest credited to a policy, potentially more than an investor might achieve through other fixed-income investments.