A bill that would make variable products subject to securites regulation in Kansas is up for consideration in the state House Judiciary Committee, the third time this issue has been raised in as many years.
A second hearing to review H.B. 2347, which would enact the Uniform Securities Act with amendments to include regulation of variable insurance products, was scheduled to be held on March 5 following an initial hearing on Feb. 19. The issue was also a potential topic of discussion during the spring meeting of the National Association of Insurance Commissioners in Altanta.
Legislators also addressed the issue during the spring meeting of the National Conference of Insurance Legislators, Albany, N.Y., where a resolution was adopted opposing the regulation of variable insurance products by state securities regulators.
“The current regulatory environment is handling these products just fine,” says Tim Tucker, NCOILs director of state-federal affairs in Washington.
Indeed, the American Council of Life Insurers, Washington, says the added layer of regulation would be costly and unnecessary.
It is an assertion Kansas Securities Commissioner David Brant disputes, saying consumers have been harmed as an increase in the number of complaints illustrates. Consequently, he continues, they need the protection of additional scrutiny that securities regulation would bring.
But Carl Wilkerson, chief counsel of securities and litigation with the ACLI, disagrees, citing the cost of a product that he says is regulated by the Securities and Exchange Commission, the National Association of Securities Dealers and state insurance regulators. The exclusive authority of state insurance departments to regulate variable products would also be countered by this bill, he contends.
Other states–including Arkansas, Missouri and North Dakota–are also considering changes to their securities laws.
For instance, in Arkansas, H.B. 1529 and in Missouri, S.B. 427, leave variable products including variable annuities under the auspices of state insurance departments. And in North Dakota, S.B. 2084 leaves variable annuities in the category of exempt securities in the North Dakota Century Code, a body of law for the state.
Reproduced from National Underwriter Edition, March 10, 2003. Copyright 2003 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.