Variable Annuities

Joint Statement of NASD and State Regulators in Support of Annuities Suitability Rule

 

On May 8, 2007, NASD and state regulators from North Dakota, Iowa and Minnesota signed a joint statement supporting a new rule to require that insurance companies and agencies recommend only suitable annuity products to their customers. All four are members of the Annuity Working Group, which was established in 2006 to evaluate regulatory standards for different types of annuities. Formation of the working group followed an Annuity Roundtable sponsored by NASD and the Minnesota Department of Commerce, to open a cross-jurisdictional dialogue on the regulatory framework under which annuities are marketed and sold.

The Annuity Working Group supports the Suitability in Annuity Transactions Model Regulation, recently approved by the National Association of Insurance Commissioners (NAIC). The model regulation – which, like other insurance regulations, would have to be adopted state-by-state – would impose a suitability requirement on the purchase or exchange of fixed annuities in those states that do not have such a requirement. Federal and certain state securities laws already impose suitability requirements on broker-dealer and investment adviser sales of variable annuities. The Suitability in Annuity Transactions Model Regulation would, for the first time, impose an express suitability obligation on insurance companies with respect to variable annuities.

News Releases

  • 5/8/07 - News Release
    NASD, State Regulators Issue Joint Statement to Support Insurance Regulators' Model Annuity Suitability Regulation 
  • 5/16/06 - News Release
    Joint Statement of NASD Chairman and CEO Robert Glauber, Minnesota Commerce Commissioner Glenn Wilson Regarding Success of Annuity Roundtable
  • 3/23/06 - News Release
    NASD, Minnesota Department of Commerce Announce Annuity Roundtable
  • 06/09/04 - News Release
    SEC and NASD Release Joint Staff Report on Broker-Dealer Sales of Variable Insurance Products
  • 06/01/04 - News Release
    NASD Fines Davenport & Co. in First Case of Deceptive Market Timing in Variable Annuities
  • 05/20/04 - News Release
    NASD Disciplines Three Firms, Three Brokers for Variable Annuity Abuses
  • 05/12/04 - Speech
    Remarks from NASD Vice Chairman and President, Regulatory Policy and Oversight Mary L. Schapiro at the 2004 Spring Securities Conference.
  • 04/26/04 - News Release
    NASD Proposes Specific Requirements for Deferred Variable Annuity Sales
  • 01/29/04 - News Release
    NASD Fines Prudential $2 Million; Orders $9.5 Million to Customers for Annuity Sales in Violation of NY Insurance Regs
  • 01/14/04 - News Release
    NASD Charges Waddell & Reed with Suitability Violations Relating to Thousands of Variable Annuity Exchanges and Seeks Customer Compensation
  • 01/12/04 - News Release
    NASD Bars Louisiana Broker and Orders Restitution for Unsuitable Sales of Variable Annuities and Mutual Funds
  • 05/27/03 - News Release
    NASD Takes Disciplinary Actions for Variable Annuity Abuses and Issues Investor Alert on Variable Products
  • 02/15/01 - News Release
    NASD Regulation Files Six Enforcement Actions Involving Marketing and Sales of Variable Annuities
  • 12/05/01 - News Release
    NASD Regulation Announces Two Enforcement Actions Involving Sales of Variable Annuity and Life Insurance Contracts

Notice to Members and Guidance

  • Notice to Members 04-45
    NASD Seeks Comment on Proposed Rule to Impose Specific Sales Practice Standards and Supervisory Requirements on Members for Transactions in Deferred Variable Annuities; Comment Period Expires August 9, 2004 (Notice posted on 06/09/04
  • Member Alert
    NASD Reminds Members of Their Responsibilities Regarding Hypothetical Tax-Deferral Illustrations in Variable Annuity Communications
  • Notice to Members 00-44
    The NASD Reminds Members of Their Responsibilities Regarding The Sale of Variable Life Insurance (Notice posted on 06/16/00
  • Notice to Members 99-35
    The NASD Reminds Members of Their Responsibilities Regarding the Sales of Variable Annuities (Notice posted 05/99)
  • Notice to Members 96-86
    NASD Regulation Reminds Members and Associated Persons that Sales of Variable Contracts are Subject to NASD Suitability Requirements (Notice posted 12/96)

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