Sellers of fixed annuities and equity-indexed annuities should meet the same standards that sellers of variable annuities must meet.

National Association of Securities Dealers Chairman Robert Glauber delivered that message today in Miami Beach, Fla., at an enforcement conference organized by the North American Securities Administrators Association, Washington.

Consumers have “every right to expect the same degree of protection when they buy what they think is the same product,” Glauber said, according to a written version of his remarks posted on the Web site of the NASD, Washington..

Glauber talked about annuity sales regulation during a discussion of NASD efforts to do a better job of regulating securities dealers.

Glauber argued that annuities are particularly troublesome from a regulatory standpoint, because the NASD and state securities regulators have jurisdiction over variable annuities, state insurance regulators normally have jurisdiction over fixed annuities, “and jurisdiction over equity-indexed annuity sales is essentially a jump ball, because it isn’t clear whether they’re securities, insurance products or something in between.”

The NASD, the SEC and state securities regulators have worked tirelessly to clean up variable annuity sales practices over the past few years, “but fixed annuity investors generally don’t enjoy this level of protection,” Glauber said. “Unfortunately, when we clean up sales practices in one investment product, sales activity increases in similar products with less investor protection.”

Glauber noted that the NASD already handles some cases involving fixed annuities, such as instances of brokers persuading risk-averse retirees to exchange fixed annuities for far more volatile variable annuities.

The NASD also has urged its 5,200 member firms to treat equity-indexed annuities as securities, even though it’s not clear that they are, Glauber said.

“And we’re investigating some situations where brokers switched older investors from variable annuities into EIAs with high costs and long surrender periods,” Glauber said.

Now, Glauber said, the NASD is proposing that all parties with an interest in fixed annuities, variable annuities and EIAs, including regulators and senior representatives from the securities and insurance industries, meet at a summit conference to discuss ways to harmonize the rules governing the sale of “these 3 versions of the same product.”

The goal of the conference should be to level the investor protection playing field among and between FA, VA and EIA products, Glauber said.

Glauber said the NASD has been working with Minnesota Commerce Commissioner Glenn Wilson on organizing the summit conference because Minnesota already has a suitability requirement for insurance products that is similar to the NASD’s suitability requirement.

“Minnesota’s requirement is significant in that it goes much further than the [National Association of Insurance Commissioner's] so-called model suitability standard, which applies only to investors over 65,” Glauber said. “I’m not sure why the NAIC thinks such a lax suitability requirement provides adequate investor protection.”