SEC Proposes Rule on EIAs, Opens Rule 15a-6 for Comments

The SEC further states that the proposed rule would address “the manner in which a determination would be made regarding whether amounts payable by the insurance company under a contract are more likely than not to exceed the amounts guaranteed under the contract.” The Commission said the proposed rule “is principles-based, providing that a determination made by the insurer at or prior to issuance of a contract would be conclusive if, among other things, both the insurer’s methodology and the insurer’s economic, actuarial, and other assumptions are reasonable.” The proposed new definition would apply only to indexed annuities issued on or after the effective date of a final rule, if adopted, the SEC said.

Ira Hammerman, senior managing director and general counsel of SIFMA, said in a prepared statement that by opening rule 15a-6 to comments and revisions, “the SEC recognizes that our industry operates in a truly global, interconnected environment.” He said that “by opening up this two-decade old rule for reform, the Commission helps ensure that U.S. markets remain competitive, instead of shackled by arcane and duplicative regulations written before the advent of e-mail or the Internet. Modernizing how overseas brokers interact with U.S. investors is a tangible step forward in the movement to make the U.S. more competitive in the global marketplace.”