VA Sales Oversight Decision Left In Hands Of State Legislatures
With the adoption of a new model law, state legislatures may be cast in the role of Solomon, determining whether sales of variable contracts should be regulated as securities, insurance contracts or both.
In the model developed and adopted by the National Conference of Commissioners on Uniform State Laws, Chicago streamlines the Uniform Securities Act. It leaves it up to state legislatures to decide whether variable contract sales should fall under the jurisdiction of state securities regulators.
Work on the model has been ongoing for the last two years, and culminated with a vote of about 350 NCCUSL commissioners at their annual meeting in Tucson last week.
The model is simply a template for state legislatures to use or not.
Insurers and producers represented by the American Council of Life Insurers and the National Association of Insurance and Financial Advisors argue that requiring the sale of the product to be overseen by securities regulators creates an unnecessary layer of regulation.
Advocates for including regulation of the sale of these products as securities say sales of variable contracts consistently come up as a problem. Advocates include the Financial Planning Association, Atlanta, and the Consumer Federation of America, Washington.