On June 25th, Chairman of the U.S. Securities and Exchange Commission (SEC), Christopher Cox, proposed a new rule that could cause equity indexed annuities (EIA) to be regulated as securities, which was approved with a 3 to 0 vote by the commission. The SEC cited deceptive sales’ practices as a key concern for this proposed regulation, but this is not the first time that insurance companies have come under scrutiny.
This news is sure to stir-up a lot of conjecture and hearsay in the EIA industry. When discussing deceptive sales’ practices, Cox paused to show a segment of the recent airing of Dateline NBC’s episode, which criticized the sales’ practices of certain unscrupulous EIA producers.
Cox’s public announcement was to notify of the SEC’s intentions and following will be an official proposed ruling by the SEC detailing their recommended changes. There is then a process that the proposal must go through, and if approved, there will be one full year before the new rules take affect.
Just last year, nearly $25 billion was placed into EIAs, which meet the legitimate needs for retirement dollars.
“Whether the names and rules change, our carriers are going to continue to present cutting-edge products that we can market to a growing number of retirees,” said Karlan Tucker, CEO of Tucker Advisory Group. “My company will still provide essential support in the sales’ arena for a line of innovative products that have just as much potential for our clients as they do for us.”
Tucker, who is the CEO of the number two sales’ organization with the nation's second all-time indexed annuity carrier, encourages all EIA advisors to read the news’ literature published about this proposal and become knowledgeable of the specifics of how and when these changes may take place.
