I received a note from Sheryl J. Moore, president and CEO of AnnuitySpecs.com this morning with an announcement that “the court has vacated the SEC’s rule 151A.”
The following are excerpts from Moore’s letter clarifying what has taken place:
Here is language from the court’s order:
“Having determined that the SEC’s S. 2(b) analysis is lacking, we grant the petitions [assertion that] the SEC failed properly to consider the effect of the rule upon efficiency, competition, and capital formation… We therefore order that Rule 151A be vacated.”
So, what does this mean to all of us?
This means that the court effectively settled 151A. As far as the judicial branch is concerned, there is not sufficient evidence to suggest that indexed annuities should be regulated as securities.
Is the securities status of indexed annuities settled for good?
No. Remember – the Securities and Exchange Commission first questioned the securities status of indexed annuities in 1997. They did so again in June of 2008 with their proposed rule 151A. If we want to ensure that indexed annuities will be regulated as fixed insurance product indefinitely, we need to continue our current legislative strategy.
When will the securities status of indexed annuities be settled for good?