Life insurance in the United States has primarily been a general-account-based vehicle. A combination of developments in the financialmarkets and in insurance regulation are about to produce majorchanges in the investment characteristics and providers of life insurance and annuity products. Funds are moving out of the general account into separate accounts, in which the policyholders bear the investment risk, and in the near future, into synthetic general accounts, whichare provided by nonlife insurance companies. This process could forcea major consolidation in the life insurance industry.