July 29, 2008
Opposition to 151A - Guarantees of principle and minimum interest rates of return are not components of Risk associated with Securities. In 2002 a Fed. District Court in
Kentucky examined an index annuity issued by Amer. Equity Investment Life Ins. Co. The Judge decided that this index annuity was not an 'investment contract', further the judge included in his opinion why an index annuity meets the Rule 151 Safe Harbor criteria. Insurance carriers have purposely
built index annuities to satisfy the Safe Harbor guidelines.
Although the SEC has not resolved the issue, the presumption
is that most annuities are governed by the Rule 151 securities exemption. This is because most annuities function like insurance policies rather than investment securities, and Congress explicitly made insurance policies exempt from securities regulation.
Stop trying to regulate insurance policies.