WASHINGTON BUREAU — A Washington financial services regulation expert has warned against assuming that the U.S. Court of Appeals for the D.C. Circuit is about to throw out Regulation 151A.

A recent order issued by a panel of judges at the court appears to indicate that vacating the rule “is not imminent, but a possibility,” says Frederick Bellamy, a partner at Sutherland Asbill Brennan L.L.P., Washington.

The panel is trying to prod the U.S. Securities and Exchange Commission to disclose specifically how it itends to respond to a decision the panel released in July, Bellamy says.

The court’s message is, “Trust, but verify,” Bellamy says.

Rule 151A, a regulation approved by the SEC in January, would classify indexed annuities as securities starting Jan. 12, 2011.

Insurers filed a suit — American Equity Investment Life Insurance Company, et al, vs. the Securities and Exchange Commission, No. 09-1021 – in an effort to block the regulation.

A D.C. Court panel ruled in July that the SEC had the authority to oversee EIAs as securities, but it sent the rule back to the SEC for reconsideration.

The panel said it was returning the rule to the SEC because the SEC had not complied with Section 2(b) of the Securities and Exchange Act of 1933, which requires the SEC to to study the effect of a proposed rule on efficiency, competition, and capital formation, and to include information about the possible effects in the proposed rule.

Old Mutual filed a motion of its own asking the appeals court panel to ensure that the insurance industry would have at least 2 years to prepare to comply with Rule 151A.

Instead, the court panel has ordered additional briefing in the case, both on the issue of whether implementation of the rule should be delayed and on the issue of whether the court should vacate the rule.

The order, issued Nov. 6, gives Old Mutual until Nov. 23 to file a brief, and it gives the SEC until Dec. 8 to file a response to the Old Mutual brief.

The court panel then plans to decide whether to issue a stay, vacate the ruling or do something else.

The SEC itself appears to suggest in a document filed with the court Sept. 28 that it is willing to give the indexed annuity industry more time to comply with Rule 151A.

“There is no basis for Old Mutual’s assumption that, if the Commission were to reissue the rule after addressing the requirements of Section 2(b), the Commission would refuse to extend the rule’s effective date without regard to its impact on companies that issue and sell indexed annuities,” the SEC says in the September filing.