An Insurance Group Separate Account (IGSA) is a product offered by insurance companies that are used to fund retirement arrangements such as 401(k), 403(b), profit-sharing, and other types of company-sponsored retirement plans.
A pension plan investing in an IGSA is not providing its participants with a stream of guaranteed future income.
A typical IGSA product is simply a lineup of separate account investment options that may either be managed directly or that may invest in an open end mutual fund. "Separate" because the assets are separate from the general account of the insurance company.
IGSAs are not registered investment vehicles like mutual funds or ETFs. SEC registration is not required for IGSA products, although they are regulated by state insurance boards.
Morningstar began identifying IGSA investment vehicles uniformly and distinctly in 2009. Consultants and advisors screening the database should recognize that as of May 2009 the database is in its initial stages and will increase in size and information disclosure over time.
IGSAs are rated using an overlay of the open end universe (i.e., rated based on their position on the open end fund rating bell curve), not based on Morningstar VA subaccount ratings, nor on the universe of separately managed accounts, collective trusts, and IGSAs.
As mutual funds are oftentimes the underlying investment vehicle in an IGSA and as mutual funds remain a predominant choice for retirement plans, the mutual fund universe provides a robust and appropriate base of comparison for IGSA.