SEC Rule 151A, which would securitize indexed annuities, continues to dominate our industry’s headlines. According to a recent report, “a coalition of insurance companies and independent marketing organizations has filed suit in federal court to overturn Rule 151A.”
The coalition filed the suit in the U.S. Court of Appeals for the District of Columbia Circuit. That’s the same court that “invalidated the SEC’s hedge fund registration rule and twice rejected the Commission’s mutual fund governance rule.”
Eugene Scalia, the petitioners’ lawyer, said: “The securities laws say explicitly that annuities are to be regulated by the States, not the SEC. Unfortunately, the Commission engaged in a flawed rulemaking process whose result is a rule that conflicts with Congress’s intent and with two Supreme Court decisions.”
In addition, Jim Poolman added: “It is ironic that indexed annuities have fared so much better during the recent financial crisis than securities products, and yet the SEC now wants to regulate indexed annuities, even though nobody lost a dime on indexed annuities as a result of the market meltdown.”
The petitioners in the case are: American Equity Investment Life Insurance Company, BHC Marketing, Midland National Life Insurance Company, National Western Life Insurance Company, OM Financial Life Insurance Company and Tucker Advisory Group.
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