The National Association for Fixed Annuities says it will be hiring a public relations firm and legal firm with “established Washington contacts” to help block proposed federal regulations.
The U.S. Securities and Exchange Commission announced in June that it was looking into the possibility of defining fixed annuities as securities, just as it defines variable annuities to be securities, and putting fixed annuities under the jurisdiction of the SEC.
NAFA, Milwaukee, responded with a short statement at the time but now has come out with a more detailed version of the original response.
“NAFA strongly disagrees with the SEC proposal and will pursue all available avenues of recourse,” the group says in a new notice to members.
After the SEC comment period ends Sept. 10, the SEC still must vote on the proposed regulations, NAFA says.
If commissioners vote to adopt the regulations, carriers would have at least 12 months to comply, and “the adopted rule may be challenged via the judicial system,” NAFA says.
NAFA supports the goals of protecting consumers and enforcing fixed annuity suitability standards, but it also supports existing efforts by insurers and state insurance regulators to enforce suitability and disclosure standards, prosecute fraud, and take other steps to achieve those goals, the group says.
The NAFA board will be working to develop a formal response to the SEC proposal, ramp up a media campaign to promote the value of fixed annuities, and enlist member insurers in communications, lobbying and legal efforts, the group says.
“The value of the fixed indexed annuity – now more than ever in these turbulent economic times – is self-evident.,” NAFA says in the notice.
“With the uncertainty of today’s economic outlook – the mortgage crisis, gas prices, auction-rate securities and stock market instability – selling the guaranteed insurance of fixed annuities could not be more important to your customers, clients, family and friends,” NAFA says.