Close Close
Sign In
Newsletters
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards
Podcast Center Video Center Webcasts Resource Center Events
About ThinkAdvisor Contact Us Advertise With Us Asset & Logo Licensing Sitemap Terms of Service Privacy Policy Copyright © 2024 ALM Global, LLC. All Rights Reserved.
ThinkAdvisor

Regulation and Compliance > Federal Regulation > SEC

Getting the goods on Rule 151A

By Andy Stonehouse

X
Your article was successfully shared with the contacts you provided.

Three of the foremost experts on the still-evolving SEC Rule 151A — the proposal which could serve to turn fixed indexed annuities into a registered security — were on hand Aug. 22 at Senior Market Advisor Expo in Orlando for what turned into a very spirited debate.

Lawmaker Joe Borg, director of the Alabama Securities Commission, and a self-admitted “strong supporter” of 151A, was joined by Kim Shaul, deputy insurance commissioner for the State of Wisconsin and Jim Mumford, first deputy insurance commissioner for the Iowa Insurance Division.

Shaul and Mumford took a more neutral stand on the issue, suggesting the SEC’s proposal may not be in the best interest of producers; the fireworks that ensued indicated that this was an issue which is not being taken lightly by those in the industry.

“My position is that these are not bad products, but they are certainly not suitable for everyone,” Borg says. “I wouldn’t be hearing from the public if this wasn’t a big problem, but 40 percent of the complaints coming into my office are on sales of these products … it’s getting to the point where it’s an epidemic.”

Mumford, on the other hand, says he believes that 151A is completely inappropriate.

“I regret that it’s come down to a turf war between the SEC and the states, but this is simply a bad rule that should never be out there,” he says. “You put this rule out there and the lawsuits will start immediately. We need to cut out the rhetoric and false information — indexed annuities are successful products, but the SEC sat around for 12 years and didn’t do anything, until now.”

Shaul says she believes that a better proposal lies in the continued effort of organizations such as Wisconsin’s own Annuities Suitability Committee, which has worked to monitor FIA/EIA products with a less draconian tone than the SEC.

“We want to make sure that the SEC realizes all of the hard work that we’ve done at the state level,” she says. “I would really like to continue the dialogue.”

Andy Stonehouse is managing editor of Senior Market Advisor.

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.