Chances are you want SEC Rule 151A to be vacated. Are you doing anything about it?
As you probably heard, last week the annuity industry got some good news when the SEC revealed via a Dec. 8 filing with the U.S. Court of Appeals for the District of Columbia Circuit it is putting off for two years the effective date of the hotly disputed rule that would require that certain indexed annuities be treated as securities rather than insurance products. Rule 151A had been set to go into effect in early 2011. The two-year stay would run from the date of publication of a reissued or retained rule.
The stay certainly doesn’t signal that the SEC is giving up. While it is uncertain at this point whether the Court will vacate Rule 151A or leave it on remand at the SEC, the SEC will have to take further action if it wants to proceed.
Nick Gerhart, VP of Compliance Communication at American Equity, said last week that the SEC appears to be taking initial steps toward completing a Section 2(b) analysis considering the rule’s impact on efficiency, competition and capital formation. The SEC staff could make a recommendation to the SEC Commissioners this Spring. If the SEC continues to proceed, a new notice and comment period will be opened. Once that process is done, the SEC will take those comments into consideration and either make changes to the rule or adopt it. If the Court vacates the rule, the SEC may drop 151A entirely or they may start promulgating a new rule.
What can you do? You can contact your Representatives and Senators and encourage them to co-sponsor H.R. 2733 and S. 1389, which would permanently clarify that fixed indexed annuities are insurance products. The best way I’ve seen to do this is by visiting www.SEC151a.com, a Web site designed to be the annuity industry’s rallying point for fighting 151A. There you will find resources and contact information to help you participate in a “virtual March on Washington.”
If you are against 151A, you need to take the time and make the effort to see that your voice is heard.