NU Online News Service, April 6, 2004, 2:40 p.m. EST – Missouri legislators are considering a bill that would put variable products under the purview of both insurance and securities regulators in the state, a move that is being opposed by insurers and agents.
In the past, similar legislation was introduced in Kansas but has not been successful.
Currently, insurance regulators have an exclusive right to regulate variable products in 48 states, according to the American Council of Life Insurers, Washington.
The Missouri bill, H.B. 1665, was voted out of the House Financial Services committee on April 2 in an 11 to 8 vote and now will be addressed by the full House. It has the support of Governor Bob Holden, Secretary of State Matt Blunt and Speaker of the House Catherine Hanaway.
Blunt’s office says that the bill is needed because currently, there is an exclusion from state enforcement of investor protection laws. Rather than have the state insurance department develop standards, Blunt says that it would be more efficient to work up rules using the securities division’s existing staff and expertise.
During a hearing on the issue, Carl Wilkerson, ACLI vice president and chief counsel-securities litigation, Washington, pointed out that variable products are already regulated by the Securities and Exchange Commission, the National Association of Securities Dealers and state insurance departments. The bill, he continued, would create the potential for conflicting regulation and create unnecessary compliance costs.
There were no instances that were raised during the hearing that would suggest that there is a need for additional regulation, Wilkerson says.