Attorneys representing the Securities and Exchange Commission will appear in a federal appeals court Friday to defend the agency’s new rules which classify indexed annuities as securities and subject them to federal oversight, according to a report from Dow Jones Newswires.

The SEC’s rule is being challenged by a coalition of insurance companies and marketing groups.

“The coalition argues that indexed annuities are insurance products because they guarantee a return of one’s principle, and therefore should be regulated strictly by the states,” writes Sarah Lynch for Dow Jones Newswires.

The coalition has hired Eugene Scalia, a lawyer from Gibson, Dunn & Crutcher who has successfully defeated the SEC in a previous case challenging an SEC rule on mutual funds.

“I haven’t seen the insurance industry this agitated over an SEC rule before,” Robert Hillman, a professor at University of California, Davis, School of Law told Dow Jones. “The insurance industry has been fairly successful at keeping the SEC at arms length…and I think there’s more here than the simple issue of equity indexed annuities. It’s the principle behind the reach of regulation.”