Insurers Fight Model Giving State Securities Regulators Variable Product Oversight
Life insurers and producers are making a last-ditch effort to stave off a model regulation that would place variable life and annuity products under the auspices of securities regulators.
On July 29-30, the National Conference of Commissioners on Uniform States Laws, Chicago, is scheduled to vote on amendments to the Uniform Securities Act at its annual meeting in Tucson, Ariz.
NCCUSL is a 110-year-old organization made up of lawyers, judges and law professors dedicated to making laws more uniform. Model laws it adopts can be brought before state legislatures much as model laws from the National Association of Insurance Commissioners and the National Conference of State Legislators are introduced in legislatures.
The amendments would give securities regulators authority to regulate variable products, which traditionally have been sold and regulated as insurance products by state insurance regulators.
Securities regulators such as David Brant, Kansas securities commissioner, have argued that the NCCUSL model is solely an effort to make regulation of these products more streamlined. Producers who sell these products must have a securities license, he has said.
But the American Council of Life Insurers, Washington, and the National Association of Insurance and Financial Advisors, Falls Church, Va., see the matter differently.
They have sent out letters to all 350 commissioners in a final bid to persuade them not to vote for the measure as it stands. It has a 50-50 chance of being enacted, says Carl Wilkerson, ACLI chief counsel-securities and litigation.
If the measure does pass, Wilkerson promises a fight in state legislatures where it is introduced. “We are pledged and the agents are pledged to violently fight this,” he adds.
The “shame of it,” according to Wilkerson, is that except for the variable product provision, there is support for streamlining of securities regulation.
Reproduced from National Underwriter Life & Health/Financial Services Edition, July 29, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.