The American Council of Life Insurers has repeated its call for the U.S. Securities and Exchange Commission to scrap a proposed National Association of Securities Dealers regulation that would tighten variable annuity sales standards.[@@]
The NASD sales suitability proposal, NASD Rule 2821, “has become a lightning rod for broad industry concern,” Carl Wilkerson, an ACLI chief counsel, writes in a letter to the SEC.
The ACLI, Washington, is asking the SEC to keep the existing VA sales suitability rules.
The current NASD proposal “does not adequately demonstrate a need for new regulations based on objective empirical data,” Wilkerson writes.
Although the SEC is complaining about unsuitable VA sales, complaints about unsuitable VA sales account for just 0.32% of the NASD’s total disciplinary actions on average over the past 5 years, Wilkerson writes.
Similarly, the SEC logged 14 times as many broker-dealer complaints about equity securities as it did for VAs, and 4.5 as many mutual fund complaints compared with complaints about VAs for the 12 months ended May 31, 2004, Wilkerson writes.