Rydex is trying to regain lost ground with variable annuities. Since it dropped American Skandia last month, the firm has announced relationships with three insurers, Nationwide (Columbus, Ohio), Conseco (Carmel, Indiana), and Security Benefit Group (Topeka, Kansas), and is engaged in talks with three others.

Nationwide, however, was unable to confirm the deal.

"There is nothing signed yet," said spokesperson Jeff Botti. "We have entered into preliminary discussions about a variable annuity that could include Rydex funds."

Nationwide's interest in Rydex comes from industry-wide frustration with market timers and other active traders in the variable annuity market.

Security Benefit will be launching a variable annuity in mid-March or early April, which will feature Rydex funds. Besides having a flexible contract, the product takes advantage of 22 Rydex funds, 17 of them sector funds.

"It's the most flexible variable annuity that's ever been designed," said Rob Steele, executive vice president at Rydex. "It's the very first variable contract allowing the financial professional to execute strategic asset allocation, tactical asset allocation, sector rotation, and market timing."

The 16 other sub-accounts in the variable annuity are divided among Aim, Fidelity, Federated, Neuberger Berman, Strong, Franklin Templeton, and Security Benefit Group.

The Conseco product, the "Conseco Advisor Variable Annuity," is a relaunch featuring seven Rydex funds and also aims to reach active trading advisors.

"We plan on making enhancements to it in the next two to four months, as well," said L. Gregory Gleckner, senior vice president of Conseco retirement services. "When we begin the marketing campaign next month, we'll begin with seven basic portfolios, then add 18 portfolios that cover sectors, as well as covering the major indices."  

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