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SEC Schedules Annuity Proposal Review

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The U.S. Securities and Exchange Commission says it soon will discuss how to define terms related to annuities.

The SEC appears to be indicating that it plans to address the controversial indexed annuity definition proposal at its Dec. 17 meeting.

The proposal, unveiled in June, calls for the SEC to define the annuities as securities and take the lead in regulating the products, while sharing some responsibility with state insurance regulators.

Issuers of indexed annuities offer a fixed, guaranteed rate of return and also offer to pay holders extra if a specified investment index or collection of indices does well.

Insurance agents, securities brokers and others have submitted hundreds of comments on the proposal.

Proposal supporters say they want the SEC to step in and help improve the way indexed annuities are sold.

The majority of the commenters, including groups representing insurance agents, have objected, arguing that the products clearly are insurance arrangements, not securities, and that indexed annuities have been performing much better than SEC-regulated products and companies have been performing.