Axa is to end its enhanced annuity pilot due to concerns over Solvency II.
The new capital requirement regulations, which will mean insurers need to hold more cash to ensure they can meet their obligations, make enhanced annuities unattractive, Axa says.
An Axa spokesman says: "We launched a small-scale pilot of enhanced annuities in 2007 to test the market. Following the pilot, we have concerns about the impact Solvency II will have on the annuity market, and have decided not to launch a full enhanced annuity product."
Axa says it has informed advisers of its plans to withdraw the pilot at soon as it is reasonably possible.
Solvency II is due to be introduced in 2012, imposing higher capital requirements on insurance companies. Many insurers are worried the requirements could push up the cost of annuities, at a time when retirement incomes are already stretched.
Advisers have until Friday to obtain quotes for their clients.
Duo start roles on 1 October
Where true value lies
Economy to thrive despite global risks
Behaviours, animals or something else?