MetLife Inc. has filed a brief with a Federal Court supporting the Securities and Exchange Commission in its position that equity indexed annuities are securities.
The company filed its friend-of-the court brief in a case filed Jan. 16 against the SEC by a coalition of insurers challenging the agency’s rule 151A, in which it asserted its authority to oversee sales of EIAs.
In their suit in the U.S. Court of Appeals for the District of Columbia , the coalition argued only individual states, not the SEC, have jurisdiction to regulate annuities.
The National Association of Insurance Commissioners and some financial service groups also opposed rule 151A, arguing that EIAs do not fit the legal definition of securities and that SEC regulation would increase costs of selling the products.
In its brief, MetLife argued that “federal regulation of indexed annuities as securities is an appropriate exercise of the SEC’s rulemaking authority.”
The brief also pointed out the MetLife does not sell EIAs but does sell variable annuities, which it said some investors may confuse with EIAs. “Inadequate regulation of indexed annuities thus tarnishes the reputation of other annuity issuers, including MetLife and the insurance industry as a whole,” the company stated.
MetLife was joined it its brief by the National Association of Securities Dealers and the AARP, both in Washington.