72(q) Distributions from a non-qualified annuity

L1: 72(q) Distributions from a non-qualified annuityI purchsed a non-qualified annuity several years ago and began taking 72(q) distributions to avoid the 10% penalty tax. I must continue the withdrawals for another 2+ years. I am thinking about initiating a 1035 exchange from this annuity to another variable annuity but am concerned about breaking the rules under 72(q).
First, am I even allowed to do the exchange? Since I”m taking 72(q) payments from the annuity am I required to continue withdrawing funds from THIS annuity for the next 2 years or can I just exchange the annuity and continue 72(q) payments under the new annuity?
Also, the annuity I”m considering exchanging into will not allow me to withdraw the same 72(q) payment amount without surrender penalty. If I do the exchange, can I simply “make up” the difference with other non-qualified assets in the account? For example, if I”m withdrawing $2,000/month now but the new annuity only allows $1,500/month without surrender penalty, can I pull the other $500/month from a mutual fund in the account?
Thanks for any responses and sorry for the long question. I just can”t track down any private letter rulings on this subject.2003-04-07 10:15, By: Rob, IP: [127.0.0.1]

L2: 72(q) Distributions from a non-qualified annuity>>I am thinking about initiating a 1035 exchange Shouldn”t be a problem, just make sure the plan stays intact. You may want to contact the new insurer.
>>If I do the exchange, can I simply “make up” the difference Only assets initiall allocated to the plan can be used for the payments. Using your exampleyou would break the plan resulting in taxes and penalties on all past withdrawals.
You may be better off right where you are or find a no load/no surrender charge variable annuity.
2003-04-07 13:12, By: Gfw, IP: [127.0.0.1]