American Skandia has accepted the resignation of Putnam Investments, Inc. as a subadvisor in three of its 33 variable annuity subaccounts, citing a need for a more flexible partner.

"This was a question of our needing an advisor that could work within our high-service culture across a multi-product platform. Putnam was unwilling to do that, and felt it was best to resign. We agree," said Dokken, deputy chief executive officer at American Skandia in a prepared statement.

In 1998, American Skandia recorded $4.2 billion in total variable annuity sales, ranking it sixth among all variable annuity providers. Putnam Investments began its relationship with American Skandia in 1996 managing more than $600 million in existing assets. At the time of its resignation, Putnam had approximately $1.1 billion in the three variable annuity portfolios it managed, including: AST Putnam International Equity, AST Putnam Balanced and AST Putnam Value Growth and Income.

"We have a rigorous investment selection process, which evaluates our existing relationships, as well as the investment management universe at large," said Wade Dokken, Deputy Chief Executive Officer at American Skandia. American Skandia has identified a short list of premier investment managers to assume these portfolios.

"Putnam remains committed to the variable insurance business as can be seen by our recent alliance with Allstate," said Matt Keenan, a spokesman for Putnam, adding that in this case, Putnam simply decided to terminate the relationship after an audit of their VA business.

The resignation was seen as a natural consequence of Skandia's multi-manager model by Andrew Guillette of Cerulli Associates. "The multi-manager concept is rampant within the variable insurance industry," said Guillette, "and this is just part of the sub-advisory model that Skandia has built." 

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