More On Legal & Compliancefrom The Advisor's Professional Library
- The Few and the Proud: Chief Compliance Officers CCOs make significant contributions to success of an RIA, designing and implementing compliance programs that prevent, detect and correct securities law violations. When major compliance problems occur at firms, CCOs will likely receive regulatory consequences.
- Agency and Principal Transactions In passing Section 206(3) of the Investment Advisers Act, Congress recognized that principal and agency transactions can be harmful to clients. Such transactions create the opportunity for RIAs to engage in self-dealing.
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that "the time has come to recognize the substantial financial and non-financial costs to consumers of the current outdated state insurance regulatory structure."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.