NAILBA: Fixed indexed annuities not securities

The National Association of Independent Life Brokerage Agencies has announced its opposition to the SEC's regulation of fixed indexed annuities as securities.
AUG 27, 2008
By  Bloomberg
The National Association of Independent Life Brokerage Agencies has announced its opposition to the Securities and Exchange Commission’s regulation of fixed indexed annuities as securities. A key provision in proposed Rule 151A states that annuitants bear the majority of the investment risk if they are likely to receive payments that exceed the guaranteed payment within an FIA. The risk in this case is that the gain in the annuity contract will be higher than the guaranteed floor within the annuity but subject to a cap and therefore lower than some higher number. NAILBA asserted that this risk isn’t the same as what investors find in mutual funds and other securities, so these annuities shouldn’t be regulated as securities “The decision to purchase an FIA is frequently rooted in the desire to put money into a guaranteed-savings vehicle that is protected from loss,” the Fairfax, Va.-based organization said in a statement. “NAILBA objects to the idea that simply because the potential interest credit on an FIA is tied in part to a security or index, it should be considered a security.” NAILBA also said that the SEC would be compromising consumer choice by regulating FIAs as securities, as well as keeping salespeople who aren’t securities licensed from competing in the financial services world.

Latest News

JPMorgan tells fintech firms to start paying for customer data
JPMorgan tells fintech firms to start paying for customer data

The move to charge data aggregators fees totaling hundreds of millions of dollars threatens to upend business models across the industry.

FINRA snapshot shows concentration in largest firms, coastal states
FINRA snapshot shows concentration in largest firms, coastal states

The latest snapshot report reveals large firms overwhelmingly account for branches and registrants as trend of net exits from FINRA continues.

Why advisors to divorcing couples shouldn't bet on who'll stay
Why advisors to divorcing couples shouldn't bet on who'll stay

Siding with the primary contact in a marriage might make sense at first, but having both parties' interests at heart could open a better way forward.

SEC spanks closed Osaic RIA for conflicts, over-charging clients on alternatives
SEC spanks closed Osaic RIA for conflicts, over-charging clients on alternatives

With more than $13 billion in assets, American Portfolios Advisors closed last October.

William Blair taps former Raymond James executive to lead investment management business
William Blair taps former Raymond James executive to lead investment management business

Robert D. Kendall brings decades of experience, including roles at DWS Americas and a former investment unit within Morgan Stanley, as he steps into a global leadership position.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.