For annuities, a fee charged by insurers to cover costs such as issuing a fixed or variable annuity, making administrative changes to the annuity contract, and preparing the contract owner's statement. In the case of some fixed annuity contracts, fees are not charged separately but have been included in the premiums charged for the contract. In other cases, a stated, flat dollar amount is automatically deducted from the customer's annuity account value each year. For variable annuities, the fee may be expressed as a percentage of the assets in the investment subaccounts. Also known as administration charge, administration expense fee, and contract fee.
This term is also referred to as a bank fee or an acquisition fee. This is a fee charged by a leasing company to process a consumer's lease application. It is usually incorporated in the Gross Capitalized Cost. This amount, however, may be paid up front as a separate charge.