The Board of Trustees of the National Association of Insurance and Financial Advisors (NAIFA) voted to oppose the Securities and Exchange Commission (SEC)’s proposed Rule 151A, which would classify certain indexed annuities as securities. Indexed annuity products have traditionally been viewed as insurance products under the supervision of state insurance regulators. If the SEC proposal is finalized, the SEC and the Financial Industry Regulatory Authority (FINRA) would have regulatory authority over indexed annuity sales.

NAIFA believes that the current state regulatory structure is the appropriate means for addressing the concerns raised by the SEC and pointed to an interstate compact as a means of developing enhanced standards. Iowa insurance Commissioner Susan Voss said she had a “good meeting” in July with Securities and Exchange Commission Chairman Christopher Cox, on the subject of indexed annuities. But she hasn’t indicated whether Cox showed any flexibility on the issue.

August 26, 2008