sell annuities, the risk management services company said yesterday.

As part of the setting up of MRM Life, Mutual Risk has gazetted the MRM Life Ltd. Act, 1997 which will allow the company to segregate reserves. Segregating accounts gives buyers security.

Mutual Risk incorporated MRM Life on January 14, 1997.

Development of the company is in very early stages and it will be used to expand Mutual Risk's growing financial services product activities. Annuities are investment products but are legally sold as insurance products.

Financial services is Mutual Risk's newest business segment and will be built on the acquisition of The Hemisphere Group Ltd. Hemisphere provides administrative services to offshore mutual funds and other companies.

Annuities, which can be structured so that they invest in other underlying securities like mutual funds, are extremely popular in the US, especially with high net worth individuals.

They are contracts sold by life insurance companies that guarantee fixed or variable payment to the annuitant, usually in retirement.

All capital in the annuity grows tax-deferred -- accumulated earnings are free from taxation until the investor takes possession of the earnings.

A key consideration when buying an annuity is the financial soundness of the insurance company.

In recent year results, Mutual Risk said assets at December 31, 1996 were $1.64 billion, up from $1.38 billion a year earlier.