At its open meeting last week, the SEC voted 4-1 to adopt new Rule 151A under the Securities Act of 1933, as amended (the “1933 Act”), which will require registration of certain equity-indexed annuity contracts. The new rule provides that certain contracts are not considered an “annuity contract” or an “option annuity contract” excluded from the 1933 Act’s registration requirements under Section 3(a)(8) of the 1933 Act. The SEC announced that Rule 151A will apply only to equity-indexed annuities issued on or after January 12, 2011. The SEC also approved new Rule 12h-7 under the Securities Exchange Act of 1934, which will provide a conditional exemption from the Act’s periodic reporting requirements for insurance companies issuing equity-indexed annuities and certain other contracts. At the open meeting, the SEC staff stated that the final rule includes a provision designed to avoid conflicts relating to state laws. The Alert will provide additional coverage once the SEC publishes a formal adopting release for the new rules.
Alert December 23, 2008