SEC Finalizes Controversial Rule

Washington — The Securities and Exchange Commission has posted a PDF of the final version of Rule 151A on its Web site. The 155-page document includes definitions, comments and the cost/benefit analysis for the rule, whose effect date is January 12, 2011.

Once effective, the rule means that indexed annuities, heretofore regulated by the state insurance offices, will be subject to regulation of the SEC, under the Securities Act of 1933, and periodic reporting requirements under the Securities Exchange Act of 1934.

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 included the National Association for Fixed Annuities, the National Association of Insurance Commissioners and House Financial Services Committee Chairman Barney Frank, who contended that such an important ruling should have been left to the incoming administration.