Opponents of a controversial ruling by the
A coalition, dubbed the Coalition for Indexed Products, filed the suit in the U.S. Court of Appeals for the District of Columbia Circuit to coincide with the day the rule was published in the Federal Register.
“The securities laws say explicitly that annuities are to be regulated by the States, not the SEC,” Eugene Scalia, the lawyer for the petitioners said in a statement. “Unfortunately, the Commission engaged in a flawed rulemaking process whose result is a rule that conflicts with Congress’s intent and with two Supreme Court decisions.”
Jim Poolman, a spokesperson for the coalition and former North Dakota insurance commissioner, noted that the SEC reputation for oversight has taken a hit in recent months. “It is unfortunate that the SEC seeks to duplicate state efforts to regulate indexed products when, at the same time, it has come under heavy criticism for failing to adequately meet its core mandate of overseeing the securities industry,” he said. “It is ironic that indexed annuities have fared so much better during the recent financial crisis than securities products, and yet the SEC now wants to regulate indexed annuities, even though nobody lost a dime on indexed annuities as a result of the market meltdown.”
The list of petitioners in the case include: West Des Moines, Iowa-based American Equity Investment Life Insurance Co., Sioux Falls, S.D.-based Midland National Life Insurance Co., Austin, Tex-based National Western Life Insurance Co. and Baltimore, Md.-based OM Financial Life Insurance Co.
