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Life Health > Annuities

NASD To Keep Life Settlements And Annuities On Front Burner

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The National Association of Securities Dealers Inc. plans to keep a close eye on insurance products as it merges its regulatory operations with those of NYSE Regulation Inc., says a top NASD executive.

Mary Schapiro, chairman of the NASD, talked about the self-regulatory organization’s plans for insurance regulation in Phoenix at a seminar organized by the Securities Industry and Financial Markets Association, New York.

The combined NASD-NYSE SRO will merge the NASD Emerging Issues program with NYSE Regulation’s Office of Risk Assessment, Schapiro said, according to a written version of her remarks.

The new, merged emerging trends team will focus on issues that include the life settlement industry as well as sales practices aimed at seniors, Schapiro said.

The combined SRO also will work with other regulatory organizations “to extend the protections of suitability to insurance products, such as equity linked and fixed annuities,” Schapiro said.

“There should not be a kind of regulatory arbitrage that provides an incentive for the sale of one product over another,” she said. “A customer should be sold an insurance product rather than a security because the salesperson makes the reasoned judgment that the insurance product meets the best interests of the client as opposed to the fact that such a sale may not be regulated by NASD, and subject to our sales practice rules.”

Schapiro said the combined SRO will use a new cost-benefit analysis technique to analyze the effects of pending variable annuity regulations.


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