The National Association for Fixed Annuities is warning supporters against using the U.S. Securities and Exchange Commission decision to delay enforcement of Rule 151A as a reason to relax.
The SEC decision to postpone enforcement of Rule 151A is a positive development, but “NAFA is disappointed that the SEC also indicated that it still may proceed with adoption of this rule,” the group says.
The SEC told a panel of judges at the D.C. Circuit Court of Appeals in a brief that it wants the court to keep Rule 151A alive but is willing to push the effective date back 2 years.
The regulation, which would classify indexed annuities as securities and put them under SEC jurisdiction, is now set to take effect in January 2011.
“NAFA and its partners in the industry have maintained from the beginning that Rule 151A is an unnecessary intrusion on existing, strong insurance regulatory framework,” NAFA, Milwaukee, says in response to the SEC brief. “Adding a second bureaucratic layer of securities regulation on top of the already effective insurance regulation will cause great harm to consumers by crippling the distribution and access to insured annuity products that guarantee principal, prior credited interest and income during retirement.”
The appellate court is still deciding whether to throw out the rule, NAFA notes.
NAFA says it and the Coalition for Indexed Products, Washington, will be continuing to push for passage of H.R. 2733 and S. 1389, bills that would define indexed annuity products as insurance products.
H.R. 2733 has 61 co-sponsors, and S. 1389 is sponsored by Sen. Ben Nelson, D-Neb.