SEC Adopts Rule 151A
December 18, 2008 - Back to Deck's Page
SEC Adopts Rule 151A
As we all know by now, the SEC ruled yesterday that index annuity contracts will become a security by January 2011. It was interesting to observe that the one dissenting voter, Commissioner Troy A. Paredes, stated that he believed the SEC was not in a strong position of ruling against index annuities as a fixed insurance product. Furthermore, he commented it was his belief that the potential lawsuits could not be defended well by the SEC.
There is no question that insurance companies will begin to develop a strategy that may offer index annuities as a security. They may also continue to have products sold as non-registered, therefore offering index annuities as either a non-security or security sale. This may be a wonderful marketing opportunity to see how sales will be affected before the absolute switch date in two years. My observation is that there will be plenty of further discussion, potential changes, and marketing strategies developed that will ease us into any changes necessary over the next 24 months. For this reason, it is business as usual.
Happy Holidays!