In a brief filed with the U.S. Court of Appeals for the District of Columbia Circuit in the case, American Equity Investment Life Ins. Co. v. SEC, the SEC indicated that it would put a two-year stay on the effective date of Rule 151A. Under Rule 151A, indexed annuities that satisfy the rule’s definition and are issued on or after January 12, 2011 would be required to register under the Securities Act. As we reported in our July 27, 2009 post, SEC’s Indexed Annuity Rule Under Legal Cloud, the rule was challenged by a group of insurers, and the DC Circuit found that the SEC’s interpretation in the rule of the term “annuity contract” was reasonable, but remanded the case to the SEC to address the deficiencies in its analysis of the effect of the rule on efficiency, competition, and capital formation.
The SEC's decision to delay the effectiveness of Rule 151A is in response to a petition filed by Old Mutual Financial Life Insurance Co., in which the company asked for a delay on the effective date of the rule while the regulator conducts the required analysis of how 151A would affect market efficiency, competition, and capital formation. The Commission's brief states that the required analysis is underway, and should be completed in the spring of 2010.
- SEC’s Indexed Annuity Rule Under Legal Cloud, July 27, 2009
- Indexed Annuities Under the SEC’s Eye, December 29, 2009