A variable annuity is specifically structured so that contract values and benefits may fluctuate according to the investment performance of assets held in one or more separate accounts . Therefore, A is correct . Hawaiʻi's statutory framework expressly authorizes life insurers to establish separate accounts and allocate assets to them for life insurance or annuity benefits payable in fixed or variable amounts. Critically, HRS §431:10D-118 provides that income, gains, and losses attributable to assets allocated to a separate account are credited to or charged against that account independently of the insurer's other investment results.

This differentiates variable annuities from traditional fixed annuities , under which the insurer assumes the investment risk and provides contractual guarantees based on the general account. “Immediate” describes when annuity income begins, not how investment results are determined. An immediate annuity itself can be fixed or variable. “Retirement” is a descriptive use or planning objective rather than a technical annuity classification defined by separate-account performance.

The Hawaiʻi examination content also identifies fixed and variable annuities, accumulation/annuity periods, and annuity investment concepts as tested Life Producer knowledge.

Reference topics: HRS §431:10D-118 — Variable Contracts; Variable Annuities; Separate Accounts; Fixed versus Variable Annuities.

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