- 403
Equity Indexed Annuities: Securities?
Federal courts have defined the requirements, including the requirements for securities licensure, suitability, and separate accounts, based upon federal securities laws. Many annuities, but especially EIAs, have stepped too far over the line from longevity-protection to investment-selling. Securities-type disclosure, including prospectuses and suitability rules, is appropriate for insurance sold mainly as investments, to protect sellers as well as consumers.
That might be true, but the SEC, not FINRA, is proposing to classify all EIAs as securities. The SEC has long avoided regulating insurance -- even their newly proposed rule would leave company reporting to the states. Consumer complaints and court cases as well as brokers have pushed the SEC to act.FINRA is constantly reaching for more power. They will regulate all insurance and all financial transactions if they have their way.
Brokers, advisers blast Finra proposal - InvestmentNews
Federal courts have defined the requirements, including the requirements for securities licensure, suitability, and separate accounts, based upon federal securities laws. Many annuities, but especially EIAs, have stepped too far over the line from longevity-protection to investment-selling. Securities-type disclosure, including prospectuses and suitability rules, is appropriate for insurance sold mainly as investments, to protect sellers as well as consumers.
Last edited: