Insurers Oppose Revision Of Securities Law That Impacts VAs
In an ongoing revision of the Uniform Securities Act, five words that have been added to the definition of what is not a security would bring variable contracts under the auspices of state securities regulators, say insurance trade organizations, who are fighting the change.
The draft model is the work of the National Conference of Commissioners on Uniform State Laws, based in Chicago. The group is comprised of lawyers and other professionals who develop model laws on a variety of issues that state legislators can enact.
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The group aired its most recent draft of the Uniform Securities Act during its annual meeting earlier this month. The model will receive more work this year and could be adopted at NCCUSL’s next annual meeting in 2002.
Currently, producers who sell variable life insurance products, including variable life insurance and annuities, are subject to regulation of the Securities and Exchange Commission, the National Association of Securities Dealers in Washington and state insurance departments.
But if the draft is adopted as currently worded, the changes could be incorporated in state laws and bring variable insurance products under the purview of state securities regulators.
Versions of the Uniform Securities Act are in place in over 35 states. Draft revisions are under development to reflect changes made to federal securities laws over the last several years, says John McCabe, NCCUSL’s legislative director.
Federal and state securities requirements are like “twin trains going down the same track” that need to be streamlined, he adds. The draft will help eliminate duplicative requirements, McCabe explains.
Variable products are not excluded in the draft because changes to federal law include variable products as securities, he adds.