Chicago — The
By a vote of 4-1, the SEC adopted Rule 151A, which reclassifies indexed annuities as securities. Now under SEC jurisdiction, the amendment will define terms related to annuity contracts under the Securities Act of 1933, and periodic reporting requirements under the Securities Exchange Act of 1934.
The rule was passed virtually unchanged from the initial proposal despite 4,800 comments. One of the major changes, however, extends the grace period from one to two years, meaning the rule would not go into effect until Jan. 12, 2011. Staff members said they also limited the rule to indexed annuities to not include "traditional fixed annuities."
First proposed in June, Rule 151A elicited enough controversy that a public comment period, which was due to close in September, was extended. Critics of the rule, including the Milwaukee-based
Sources: InsuranceNewsNet Inc., INN archives