Insurance commissioners plan to head to Washington Dec. 17 for a U.S. Securities and Exchange Commission meeting that is expected to include a discussion on regulation of indexed annuities.
Members of the SEC staff have recommended classifying indexed annuities as securities and putting the SEC in charge of regulating the products.
The SEC says in the notice describing the upcoming meeting that the commissioners will discuss “whether to adopt amendments that would define terms related to annuity contracts.”
Insurance industry participants say they believe the SEC is referring to the indexed annuity classification proposal.
“We are really trying to encourage everyone to let the SEC know that we disagree with the proposal,” says Iowa Insurance Commissioner Susan Voss, who is vice president of the National Association of Insurance Commissioners, Kansas City, Mo.
Voss says she is planning to attend the Dec. 17 meeting and that the NAIC will have a presence during the discussion on annuities.
If the SEC implemented the indexed annuity classification proposal, consumers might be confused if they had to buy insurance from an insurance producer and then had to go to an individual licensed to sell securities to buy a fixed annuity, Voss says.
State insurance regulators have been trying to show that they can work with the SEC and other federal regulators, Voss adds.
State insurance regulators have “stepped up to the plate” with work on consumer protection issues, such as suitability and efforts to address misuse of senior designations, Voss says.
Many House members have agreed that the SEC needs to give the indexed annuity matter more thought, and the long list of comments opposing the SEC proposal suggest significant opposition to treating fixed annuities as securities, Voss says.
Trade group officials also are adding the SEC meeting to their calendars.
Kim O’Brien, executive vice president of the National Association for Fixed Annuities, Milwaukee, says NAFA is asking members to tell their members of Congress that they oppose the SEC indexed annuity definition proposal, which would create Regulation 151A.
“We are still in full opposition to the rule,” O’Brien says.
At this point, it is not certain whether SEC meeting attendees will be permitted to comment on the proposal, O’Brien says.