More On Legal & Compliancefrom The Advisor's Professional Library
- Do’s and Don’ts of Advisory Contracts In preparation for a compliance exam, securities regulators typically will ask to see copies of an RIAs advisory agreements. An RIA must be able to produce requested contracts and the contracts must comply with applicable SEC or state rules.
- Dealings With Qualified Clients and Accredited Investors Depending upon an RIAs business model and investment strategies, it may be important to identify “qualified clients” and “accredited investors.” The Dodd-Frank Act authorized the SEC to change which clients are defined by those terms.
A bill was introduced into the House of Representatives on July 26 calling for the creation of an optional national regulator for the insurance industry. The House bill, which is companion legislation to The National Insurance Act of 2007 (S40), was introduced by Reps. Melissa Bean (D-Illinois) and Ed Royce (R-California). The bill would allow insurance companies and producers to choose whether to be regulated by the states or opt for a new, streamlined federal system. In her comments when introducing the bill, Bean said Rep. Barney Frank (D-Massachusetts), chairman of the House Financial Services Committee, will likely hold hearings this fall on the issue of adopting a federal regulatory structure for the insurance industry.
At least some in the insurance industry favor the idea of federal regulation. Christopher Condron, CEO of AXA Equitable, said in a statement that "the time has come to recognize the substantial financial and non-financial costs to consumers of the current outdated state insurance regulatory structure." Today, he noted, an insurance company doing business nationally is subject to 56 sets of regulations--one for each state plus the District of Columbia and five U.S. territories.
AXA says the controversial federal regulatory structure would bring about needed change by eliminating inconsistent regulatory standards that stifle innovation and impede consumers' access to products and services; enhance consumer protections by initiating federal enforcement of a standardized set of rules; and streamline licensing procedures and compliance with market conduct rules by allowing insurers and producers to choose federal instead of state-by-state oversight.