A court here has granted a request from the equity index annuity industry to expedite review of the industry’s appeal of a Securities and Exchange Commission decision that subjects some EIAs to federal regulation.
The U.S. Court of Appeals for the D.C. Circuit granted the request Tuesday, just 6 days after the EIA industry–supported by the SEC–asked for a compressed briefing schedule on the case.
The court agreed to move even faster on the case than the industry had sought, likely setting up its hearings of oral arguments for May. That would make it more likely that the court would hand down a decision by year-end.
For example, lawyers at Gibson Dunn & Crutcher, Washington, asked in a motion filed Jan. 27 that the final brief before oral arguments be filed by April 30. Instead, the court set April 3 as the deadline for the brief.
The case is American Equity Investment Life Insurance Company, et al, v. SEC, No. 09-1021.
The industry wanted to speed up review because its members believe they will succeed on the merits of their case and that “irreparable harm will occur without expedited review.”
The SEC published the disputed final rule Jan. 16. The rule is scheduled to go into effect Jan. 12, 2011, and EIAs that would be covered by the rule can be sold under current state-based regulation until then.
One reason the industry asked for expedited review is that the SEC estimates the first-year costs of complying with the rule to be at least $100 million, that “most or all” of these costs will be incurred before the 2011 effective date, and that “the costs will not be recouped even if petitioners succeed in this litigation.”
The products are distributed through unrelated companies called independent marketing organizations, and the rule would require insurance companies to change to selling the products through the use of broker-dealers, the brief notes. That change would “require a series of steps that must be initiated almost immediately for the companies to be competitive upon the effective date of the rule,” the brief states.
The brief said the SEC “disagrees with the petitioners’ view of the merits and allegations of irreparable harm but agrees that expedited review will further the public interest.”