The Republican lawsuit targets reinsurance that helps insurance companies provide universal coverage without accounting for pre-existing conditions.
SARASOTA, Fla. / Following a two-year David vs. Goliath battle that pitted insurance agents against federal regulators, a federal appeals court now sides with insurance agents and allows them to remain the sellers of indexed annuities.
While financial markets were collapsing during the country's worst economy since the Great Depression, Florida life insurance agent Phillip Wasserman couldn't understand why the U.S. Securities and Exchange Commission, blamed in part for that collapse, wanted to start treating indexed annuities as securities by regulating them.
"I chose to get involved on behalf of everyone at my own expense, because the SEC was worried about a fixed insurance product that was safe and already well-regulated by the states," said Wasserman, president of Phillip Roy Financial Consultants. Indexed annuities have long been sold through insurance companies, and are therefore not under the control of the SEC.
In early 2009, a coalition of insurers led by American Equity Investment Life Insurance Company sued the SEC to keep indexed annuities separate from securities and free from regulatory authority. The points raised in a supplemental brief filed by Wasserman caused Rule 501A to be overturned. The rule would have given the SEC authority to classify indexed annuities as securities beginning in January 2011.
And this week, a federal appeals court vacated Rule 151A, because "the SEC failed to properly consider the effect of the rule upon efficiency, competition, and capital formation."
"I'm relieved that the court recognized how this rule would have had a tremendously negative impact on the industry and the public," said Wasserman.
There are indications that the U.S. Senate will this week approve the financial services bill, which contains an amendment to solidify the notion that state insurance regulators, rather than the SEC, should oversee indexed annuities. State insurers have always regulated these annuities.
About Phillip Roy Financial Consultants: Phillip Wasserman, an authority on life insurance and indexed annuities, regularly speaks to agents and retirees nationwide about indexed annuities. His Sarasota company, Phillip Roy Financial Consultants, a top seller of indexed annuities.
Phillip Wasserman, President, Phillip Roy Financial Consultants
Phone: (727) 743-2781