If the U.S. Securities & Exchange Commission gets its way, some index annuities could become securities under a unanimously approved proposed rule.
Known as Rule 151A, the proposal moves toward treating an annuity as a security if its performance is linked to the performance of a security, group of securities, or securities index, and if the amounts payable by the insurer are more likely than not to exceed the amounts guaranteed under the contract.
If adopted as written, the proposed rule would apply to index annuities starting 12 months after a final rule is published in the Federal Register.
A copy of the proposed rule was not yet available from the SEC; however, a summary and other news links can be found at www.AgentsSalesJournal.com/151A.
At the June 25 meeting at which SEC Chairman Christopher Cox spoke on the proposed rule, the commission played portions of the NBC Dateline segment "Tricks of the Trade," which in April looked into index annuity sales practices.
