A Houston financial services distributor is trying to use shoe leather to keep regulators from classifying indexed annuities as securities.
Carolyn Luby, president of InsurMark Inc., Houston, and about 40 other InsurMark staff members have been visiting the Houston-area offices of the senators and House members who serve the community.
The InsurMark staffers were drumming up support for the Indexed Annuities and Insurance Products Act of 2009 bill, a bill that would keep the U.S. Securities and Exchange Commission from implementing Rule 151A.
The rule would require the people who sell indexed annuities follow the same rules that apply to people who sell securities.
SEC officials argue that consumers think of indexed annuities and products such as variable annuities that are regulated as securities to be similar, and that the regulations that apply to the products ought to be the same.
Opponents, including insurance producer groups, argue that indexed annuities are different from securities because they offer a minimum guaranteed rate of return and are backed by the issuing insurer’s general account.
Opponents ask why the SEC is increasing the cost and difficulty of selling a product that generated positive returns during the recent financial crisis at a time when products that it already was regulating did poorly.
“If allowed to go into effect, SEC Rule 151A could limit retirement planning options for seniors and force the closure or hundreds of small businesses and the loss of thousands of jobs,” Luby says in a statement.
InsurMark will be participating in a natinal call-in day in support of the IAIPA bill Nov. 5, the firm says.