FOR IMMEDIATE RELEASE

NAIC APPLAUDS H.R. 2733
Bill Would Reverse SEC Claim
To Regulatory Authority Over Indexed Annuities

WASHINGTON, D.C. (June 5, 2009) - The National Association of Insurance Commissioners (NAIC) applauds the introduction of H.R. 2733, the Indexed Annuities and Insurance Products Classification Act of 2009. Sponsored by Representatives Gregory Meeks (D-NY) and Tom Price (R-GA), the legislation would reverse a controversial move by the Securities and Exchange Commission (SEC) to claim regulatory authority over indexed annuities, which have been traditionally regulated by the states.

In a letter to the bill's sponsor, the NAIC conveyed its support for the legislation and the sponsors' efforts to preserve state regulatory authority over these products so that "consumers continue to benefit from the vital consumer protections provided by state insurance regulators." Indexed annuities are financial products that guarantee investors a minimum rate of return, while allowing additional profits depending upon the performance of a basket of securities. Since a minimum return is guaranteed, the risk of investment is borne by the company selling the annuity - not the investor.

"Indexed annuities are insurance products that should be regulated by insurance regulators who can ensure the solvency of the companies selling them and monitor the individuals involved in their marketing and sale," said Roger Sevigny, NAIC President and New Hampshire Insurance Commissioner. "This legislation attests to the importance and advantage of returning the regulatory oversight of indexed annuities to the states."

The NAIC's letter also notes that the SEC's unnecessary attempt to claim oversight of indexed annuities creates ambiguities and uncertainties that could hinder the rigorous consumer protections provided by state regulators and distracts from ongoing work to address emerging issues concerning indexed annuities.
 

Click HERE for full text of the letter