It looks like the battle is over for fixed indexed annuities and other indexed annuity products. The U.S. Securities and Exchange Commission said they would have to reevaluate their information after the U.S. Court of Appeals vacated the SEC’s Rule 151A. The SEC had hoped to get indexed annuities classified as securities so they would be put under the SEC’s jurisdiction. According to National Underwriter’s “Rater: Indexed Annuity Ruling Will Stick,” Standard & Poor’s Ratings Services believes that the SEC will not pursue their indexed annuity fight, at least for the next year and a half.
After the Court of Appeals announcement, President Obama signed H.R. 4173 forbidding the SEC from claiming jurisdiction over fixed indexed annuities and other annuity products in the general account of insurance companies. The rule is known as the Dodd-Frank Wall Street Reform and Consumer Protection Act bill and states that you cannot compare annuities to the other stock market products that the SEC is in charge of. Without H.R. 4173, the SEC’s Rule 151A would have taken effect next January. Standard & Poor’s announced with their outlook improvement for American Equity Investment Life Holding Company that it is unlikely the SEC will revisit this issue in the next couple years, if at all.