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August 31, 2008 at 04:00 PM
When state insurance commissioners met in Chicago recently for their mid-summer gathering, prominent among the topics they discussed were the Office of Insurance Information proposal currently in Congress as well as the proposal by the Securities and Exchange Commission to bring index annuities under its purview.
The OII came up as part of a broader overview of bills that the National Association of Insurance Commissioners, Kansas City, Mo., needs to continue to track, according to interviews with insurance commissioners.
, NAIC president-elect and New Hampshire insurance commissioner, said the NAIC continues to work with Congress so it could lend its support to the proposal.
In fact, Sevigny said, the NAIC was working with Rep. Paul Kanjorski, D-Pa., and his staff on Aug. 22 to reach accord on language that defines an “agreement” in the bill, H.R. 5840.
Crafting of the definition is deemed important because it would limit what would be considered international agreements to authority that federal regulators already have and would not preempt current state authority.
Sevigny reiterated the NAIC’s “vehement” opposition to an optional federal charter proposal.
The discussion during the commissioners’ meeting also covered Securities and Exchange Commission proposed rule 151A, which would, if adopted, define and include the terms “annuity contract” and “optional annuity contract” under the Securities Act of 1933.
The discussion followed an Aug. 14 letter sent by the NAIC to Christopher Cox, SEC chairman.
The proposed rule also will add an exemption for certain insurance companies from filing reports under the Securities Exchange Act of 1934 with respect to index annuities and other securities registered under the Securities Act., according to the letter.
Susan Voss, Iowa insurance commissioner and NAIC Secretary-Treasurer, said, “We need to demonstrate to the SEC and, unfortunately, many state securities regulators that there is not a problem.” Iowa represents 44% of that business, Voss said, and she does not believe there is a problem with the sale of these products.
The letter asks for a 90-day extension of the comment period so that the NAIC can discuss the proposed rule at its fall meeting in Washington on Sept. 22-24; notes that a data call of the top 10 index annuity writers is planned to gather information on issues in the marketplace; reiterates the scrutiny these products receive under state laws as well as actions such as suitability and senior designations regulatory efforts now underway.
The current comment period ends on Sept. 10.
The National Conference of Insurance Legislators, Troy, N.Y., also weighed in on the issue in an Aug. 18 letter to the SEC, requesting a 120-day extension of the comment period so the issue can be discussed during its annual meeting in November.
The letter, written by NCOIL President and state Rep. Brian Kennedy, D-R.I., raises concern over the ability of state insurance regulators to gauge the impact on consumers.
Those letters are joined by letters from the Coalition for Indexed Products signed by American Equity Investment Life Ins. Co. and OM Financial Life Ins. Co. on Aug. 19 and a letter dated Aug. 22 signed by 18 representatives of Congress requesting additional time to study the issue.
Former North Dakota insurance commissioner Jim Poolman, now an industry consultant, said sufficient protections are now in place, including a suitability regulation and work currently being done on a senior designations model to protect consumers.
