Washington

The National Association of Insurance Commissioners and the National Conference of Insurance Legislators are suing to keep the U.S. Securities and Exchange Commission from regulating equity-indexed annuities as securities.

The NAIC, Kansas City, Mo., and NCOIL, Troy, N.Y., filed their suit in the U.S. Court of Appeals for the D.C. Circuit Tuesday.

The SEC published EIA rule Jan. 16.

The rule is scheduled to take effect Jan. 12, 2011. EIA contracts that would be covered by the rule can be sold under current state-based regulation until then.

Rodney Page, a lawyer at Bryan Cave L.L.P., Washington, who is representing the NAIC and NCOIL, says he expects the suit to be combined with one filed by the equity-index annuity industry.

One result of the consolidation of the two suits could be a delay in reaching a final decision, Page said.

The EIA industry petitioners had filed for expedited review of the case, with the hope of having oral arguments scheduled for May or June, in order to get a decision as soon as possible, Page said.

One alternative for the NAIC and NCOIL would have been to ask the court for permission to file a friend of the court brief, but the two parties decided they wanted to be part of the case, Page said.

The NAIC and NCOIL could not be part of the same suit that the industry filed, because, as regulators, they have different interests, Page said.