Sen. Thomas Harkin has offered an amendment to S. 3217, the Restoring Financial Stability Act bill, that would give states and territories explicit authority to regulate indexed annuities.
The amendment, S.A. 3920, would define indexed annuities as insurance products and nullify Rule 151A, an effort by the U.S. Securities and Exchange Commission to classify indexed annuities as securities and put regulation of the products in the hands of securities regulators.
“Rule 151A promulgated by the Securities and Exchange Commission and entitled ‘Indexed Annuities and Certain Other Insurance Contracts,’…shall have no force or effect,’” according to the text of the amendment.
Harkin, D-Iowa, represents a state that is home to a number of large indexed annuity issuers.
The initial amendment cosponsors are Sens. Charles Grassley, R-Iowa; Earl Benjamin Nelson, D-Neb.; Michael Johanns, R-Neb.; and Patrick Leahy, D-Vt.
The text of the Harkin amendment appears to be identical to the text of H.R. 2733, an indexed annuity bill introduced by Reps. Gregory Meeks, D-N.Y., and Thomas Price, R-Ga. Nelson is the primary sponsor of S. 1389, the H.R. 2733 companion bill.
In March, the National Association for Fixed Annuities, Milwaukee, and the Independent Fixed Annuities Agents Council, Sterling Heights, rounded up about 100 members of the indexed annuity community, including many wholesalers and retailers, to lobby for H.R. 2733 and S. 1389 in person.
Senators are now debating S. 3217 on the floor, and they may resume voting on motions and amendments Tuesday.
Insurance industry lobbyists believe efforts will be made to limit debate on the bill to 30 hours either Thursday or Friday. If a motion to limit debate passes, a final vote on the bill could occur by next Tuesday.
S.A. 3920 is far from the only amendment awaiting action, and it is far from certain that lawmakers will end up debating the amendment, let alone voting on it.
Lawmakers have introduced scores of amendments, and a number of amendments that refer directly to insurance, insurers or annuities.
Leahy, for example, is continuing to try to eliminate the antitrust exemption accorded health insurers by the McCarran-Ferguson Act.
Leahy has introduced a health insurance antitrust repeal amendment, S.A. 3823, along with 21 cosponsors.
Leahy has been trying to get an antitrust repeal measure to the floor or have it attached to a successful health system change bill for months.
Leahy says he is continuing the antitrust repeal effort because the recent economic crisis “showed all of us that corporations do not act responsibly without adequate oversight.”
The health insurance industry benefits “from a six-decade-old special interest exemption,” Leahy says. “We can surely agree that health insurers should not be allowed to collude to fix prices and allocate markets.”
Health insurers have argued that Federal Trade Commission and state insurance regulators already apply antitrust rules to health insurers when health insurers are making acquisitions and setting prices, and that antitrust repeal would backfire, by reducing small health insurers’ ability to get the claims data they need to stay in the health insurance market
Allison Bell contributed information to this article.