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July 12, 2010
National Underwriter Life & Health
Financial Services Partner Frederick R. Bellamy commented on the status of Rule 151A first promulgated by the Securities and Exchange Commission in January 2009. The SEC has sought to extend its regulatory authority to cover the sale of equity indexed annuities (EIAs), on the grounds that EIAs derive their value from market movements and therefore are not true insurance products. However, recent negotiations over Rule 151A of H.4173 have all but guaranteed that EIAs will remain regulated by state insurance offices and not by the SEC. Fred noted that Rule 151A will remain on the books but it will only apply to products sold by companies that do not comply with the National Association of Insurance Commissioners suitability standard.