In a petition filed late last week, MetLife Inc., the North American Securities Administrators Association, and AARP argued index annuities should be regulated as securities rather than insurance products, DowJones reports.
Rule 151A, which requires index annuities issued on or after Jan. 12, 2011, to be registered with the commission and sold only by registered broker-dealers, met with much opposition after it was approved last December. In January, a group of insurers and marketing companies, including American Equity Investment Life Insurance Co., BHC Marketing, Midland National Life Insurance Co., National Western Life Insurance Co., OM Financial Life Insurance Co. and Tucker Advisory Group Inc., challenged the rule, according to DowJones.
The parties involved, however, have conflicting interests, the news agency reports.
MetLife doesn’t sell index annuities, but does sell variable annuities. The insurer claims “there’s no substantive reason for indexed annuities to be regulated differently than variable annuities under securities laws. Consumers could be harmed by deceptive indexed-annuity sales practices, and regulating indexed annuities under federal law, in addition to state insurance law, would subject them to stronger and more uniform standards.”
AARP has an affiliation with New York Life Insurance Co. and NASAA is a group of state regulators “seeking to expand its jurisdiction,” the agency quotes Wendy Carlson, president and chief executive of AEL.
Richard Hisey, president of AARP Financial Inc., told DowJones the product it shares with NY Life is a fixed immediate annuity, not a variable annuity.
NASAA General Counsel Rex Staples said, “What we’re trying to do is ensure that something that is clearly a security under the law is, in fact, deemed to be a security.”