FIA Fly-In: Participants May Have Signed 15 New Cosponsors

FIA sellers and manufacturers have been lobbying for the bills in response to efforts by the U.S. Securities and Exchange Commission to implement Rule 151A, a rule that would classify the products as securities.

The SEC argues that it should regulate FIA products as securities because, from the perspective of consumers, they appear to be similar to securities.

Fly-in participants argue that the products clearly are insurance products, with principal and minimum returns backed by insurance company general accounts. They also argue that defining FIA products as securities would drive up compliance costs and make the products unaffordable.

S. 1389 backers are still hoping to get a version of the bill into the Restoring American Financial Stability Act of 2009 bill. That bill was approved by the Senate Banking, Housing and Urban Affairs Committee earlier this week, but Democrats are still working with Republicans to come up with a version that can attract the Republican votes needed to get the bill through the Senate.

“The more cosponsors we have, the better our chances,” O’Connor says.

O’Connors warns against expecting a sudden breakthrough.

“Politics is a slow business,” he says. “I look it as a series of incremental breakthroughs. Every time we go [to Washington], the people there know more about us.”