Members of the House of Representatives have introduced a bill that could quash efforts by the U.S. Securities and Exchange Commission to claim jurisdiction over indexed annuities.
The House bill, H.R. 2733, would exempt indexed annuities and indexed insurance policies from regulation by the SEC.
Sen. Ben Nelson (D., Neb.), plans to introduce a companion bill in the Senate, according to the National Association for Fixed Annuities, Milwaukee. NAFA, which had been awaiting introduction of the bills for weeks, announced them in separate member alerts.
Reps. Greg Meeks, D-N.Y., and Tom Price, R-Ga., are the lead sponsors of the House bill. They have lined up 20 cosponsors, according to the Library of Congress legislative tracking system.
The House bill has been referred to the House Financial Services Committee.
NAFA says it is seeking a cosponsor for the Senate bill.
SEC officials and others have argued for years that indexed annuities should be regulated as securities because, from the standpoint of consumers, they behave like other products that are regulated by the SEC.
Critics of the SEC counter that indexed annuity issuers offer generous guarantees, back the annuities with their own general account assets, and have sold products that have outperformed SEC-regulated securities in recent months.
They also claimed that subjecting EI annuities to dual state-federal regulation would harm the insurance industry, reduce competition and restrict consumer choice. The additional regulation would also increase the costs of producing and selling these products, ultimately hurting consumers, they charged.
The SEC late last year adopted its Rule 151A, which proposed reclassifying state-regulated indexed annuities as securities. Since 1995, when indexed annuities were introduced, their regulation was the sole jurisdiction of the states, notes Rep. Meeks in a statement.
The proposed law would specifically nullify Rule 151A.
Information about the Meeks-Price bill can be found online at the following site: http://thomas.loc.gov/cgi-bin/bdquery/z?d111:HR2733