On June 26, 2008, the Securities and Exchange Commission (the “SEC”) published proposed Rules 151A and 12h-7 relating to indexed annuities and certain other insurance contracts. Rule 151A would clarify when such annuity
contracts will be deemed securities and, therefore, subject to the federal securities laws. Rule 12h-7 would provide
insurance companies an exemption from federal reporting requirements when selling such contracts, provided
that the contracts being sold are regulated as insurance under applicable state law and meet certain other
conditions. Due to the ambiguity surrounding the status of annuity contracts under current federal securities
laws, the proposed rules, if adopted, will be applied prospectively and will become effective 12 months from the
date that a final rule is published in the Federal Register.
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