The NASD is taking steps to assess oversight of the sales of all types of annuities by the patchwork quilt of regulatory agencies overseeing the products and move toward a level playing field of regulation without formulating any new rulemaking of its own or seeking any expansion of its jurisdiction, according to NASD officials.
At a self-styled “annuity roundtable” in Washington hosted May 5 by NASD Chairman and CEO Robert Glauber and Minnesota Commissioner of Commerce Glenn Wilson, Glauber proposed that NASD and the state insurance and state securities commissioners create working groups to develop “clear, consistent regulation” of annuity sales.
Details of the working group participants and the meetings are still being worked out, according to an NASD spokesman. The aim is to have the working groups up and running by mid-July.
Glauber also proposed that NASD work together with the National Association of Insurance Commissioners (NAIC) on its model law governing suitability of sales of annuities. Many of the 50 state insurance commissions and legislative bodies are currently in the process of considering or adopting these model laws. Nineteen states have passed the annuity disclosure rule. Glauber also proposed that the NAIC work with NASD to develop a joint disclosure statement for annuity sales.
“NASD reviews variable annuity advertising. We would be more than delighted to provide expertise so equity-indexed annuities and fixed annuities come up to the same level in advertising as we have with variable annuities,” Glauber told participants, who included representatives of the NASD, SEC, NAIC, the state securities commissioners, as well as industry participants.
Glauber said he wants to make sure that states have an agent training program for the sale of equity-indexed products and have enough money and staff for exams and market conduct activities.
Mary Schapiro, vice chairman of NASD and its incoming chairman, said the industry needs to have better product disclosure and better advertising models and needs to focus on all the gaps in the regulatory structure so problems selling the wrong product to consumers can be prevented, not just repaired after the sale.