SEC Regulation of Indexed Annuities?

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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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