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December 31, 2008
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HERE for the PDF version of this newsletter.
Inside this Issue
A Letter from the Executive Director
NALC Highlights
Member Survey Coming Soon
Looking Ahead
NAIC Focus
NAIC Disappointed With Anti-Consumer Ruling
Spring 2009 National Meeting
NCOIL Notes
News from the States
Illinois and North Dakota Choose State Based
Systems
Six States Earn NAIC Accreditation
New York Receives Esprit De Corps Award
North Carolina Commissioner Receives
Leadership Award
On the National Front
Treasury Distributes 1.546 Million
Additional Stimulus Checks
Industry News
Choose Indexed Life
Calendar of Industry
Events
 Save
the Date…Register Now!
The NALC will hold its 2009 Spring Conference April 22 - 25,
2009, at the Hyatt Regency Coconut Point, Bonita Springs, Florida.
Online conference registration, the hotel reservation form, golf
registration, tentative agenda and sponsorship list are available at
www.nalc.net. You have the option of registering online, or
completing the forms on your computer. PLEASE NOTE: Registration
fees are subject to a 50.00 late fee if not received by April 1,
2009. Registration fees are non-refundable after April 10, 2009.
The cut-off date for the NALC room block at the Hyatt Regency
Coconut Point is March 6, 2009. Any reservations received after
March 6, 2009, will be based on availability. See hotel reservation
form for pertinent information.
Contact Dawn Bergsma for
sponsorship opportunities.
You can help the NALC chose its future conference venues. Just
watch your e-mail for an online survey that will ask you to rate
several possible conference sites. In order to prepare for the
survey, you may visit the websites of the resorts under
consideration. The list of sites under consideration appear below
and on the NALC website at
http://www.nalc.net/site_survey.htm.
Please make note of these future NALC conference dates and add
them to your calendar. You won’t want to miss them!
- 2009 Fall Conference: September 29 - October3, 2009
Westin Kierland Resort & Spa, Scottsdale, AZ
- 2010 Spring Conference: April 14 – April 17, 2010
Kiawah Island Golf & Resort, Kiawah Island, South Carolina
- 2010 Fall Conference: September 22 – September 25, 2010
Stoweflake Resort, Stowe, Vermont
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The NAIC held its Winter 2008 National Meeting December 5 - 8,
2008, at the Gaylord Texan Hotel & Convention Center in Grapevine,
Texas. The sections below represent some of the action taken at that
meeting.
NAIC Elects 2009 Officers
The NAIC elected its 2009 officers at the Winter National
Meeting.
- President: New Hampshire Insurance Commissioner Roger
Sevigny
- President-Elect: West Virginia Insurance Commissioner Jane
Cline
- Vice President: Iowa Insurance Commissioner Susan Voss
- Secretary-Treasurer: Florida Insurance Commissioner Kevin
McCarty
 The
newly elected officers will assume their duties following the
completion of the Winter National Meeting.
Roger Sevigny was appointed New Hampshire insurance commissioner
in 2003. Prior to becoming insurance commissioner, Sevigny was
assistant commissioner at the New Hampshire Insurance Department. He
also worked at Travelers Insurance for more than 30 years in a
variety of technical and management positions. He holds a commission
in the U.S. Army, having retired at the rank of colonel. A native of
New Hampshire, Sevigny graduated from St. Anselm College with a
bachelor’s degree in biology.
Jane Cline was appointed West Virginia insurance commissioner in
2001. Prior to her appointment as commissioner, Cline operated a
government consulting firm, Jane L. Cline & Associates. Before that,
Cline served as commissioner of the West Virginia Division of Motor
Vehicles (DMV) and as deputy commissioner of the West Virginia
Division of Highways. Cline earned a bachelor’s degree in business
administration from West Virginia University and an MBA from the
University of West Virginia College of Graduate Studies.
Susan Voss was appointed Iowa insurance commissioner in 2005.
Prior to her appointment as commissioner, she served as Iowa’s first
deputy commissioner. Voss has held a number of different positions
with state government, including assistant attorney general for the
Iowa Department of Transportation, legal counsel to the state
ombudsman, counsel to the Iowa Legislature in the area of taxation
and economic development, and tax policy attorney for the Iowa
Department of Revenue and Finance. She is a graduate of Simpson
College in Indianola, Iowa, and earned a J.D. from Gonzaga
University in Spokane, Wash.
Kevin McCarty is the commissioner and agency head of the Florida
Office of Insurance Regulation. McCarty became Florida’s first
appointed insurance commissioner in January 2003. He is responsible
for Florida’s insurance market, with oversight of company solvency,
policy forms and rates, market investigations and new insurance
business. McCarty began his career in public service in 1988,
becoming an expert in workers’ compensation issues with the Florida
Department of Labor and Employment Security. McCarty earned a
bachelor’s degree in political science and a J.D. from the
University of Florida.
2009 Zone Officers Elected
NAIC members also elected 2009 zone officers during the Winter
National Meeting. The newly elected zone officers will assume their
duties following the completion of the national meeting.
Northeastern Zone
- Steven M. Goldman — Chair, New Jersey
- Thomas Sullivan — Vice Chair, Connecticut
- Joel Ario — Secretary, Pennsylvania
Southeastern Zone
- Scott Richardson — Chair, South Carolina
- Leslie Newman — Vice Chair, Tennessee
- Jim Donelon — Secretary, Louisiana
Midwestern Zone
- Kim Holland — Chair, Oklahoma
- Sean Dilweg — Vice Chair, Wisconsin
- Merle Scheiber — Secretary, South Dakota
Western Zone
- Linda Hall — Chair, Alaska
- Kent Michie — Vice Chair, Utah
- Mo Chavez — Secretary, New Mexico
Reinsurance Reform Moves Ahead
Modernization Proposal Adopted; Guiding Principles Ratified
The NAIC has adopted its Reinsurance Regulatory Modernization
Framework Proposal, which modernizes U.S. state-based regulation of
reinsurance.
"This proposal sets forth a conceptual framework only," said New
Jersey Banking and Insurance Commissioner Steven M. Goldman, chair
of the NAIC Reinsurance Task Force, which drafted the proposal.
"Now, we must focus on developing the specifics of this new
regulatory regime and taking the appropriate legislative steps to
make the proposal a reality."
The proposal creates two new classes of reinsurers in the United
States: U.S.-domiciled national reinsurers and non-U.S.-based port
of entry (POE) reinsurers, and introduces modified collateral
requirements for eligible reinsurers. The proposal also establishes
a new framework for state-based reinsurance regulation based on the
concepts of supervisory recognition, single-state licensure for U.S.
reinsurers and single-state certification for non-U.S. reinsurers
from approved jurisdictions.
The proposal creates the NAIC Reinsurance Supervision Review
Department (RSRD), which will evaluate the reinsurance supervisory
regimes of other countries and establish standards for a state to be
certified to regulate reinsurance on a cross-border basis. In order
to be certified as a POE reinsurer, a reinsurer must be licensed by
a non-U.S. jurisdiction recommended as eligible for recognition by
the RSRD.
The following "Principles for the Creation of the RSRD" will be
used to guide the Task Force as the implementation process proceeds.
- The RSRD should be created as a transparent, publicly
accountable entity (contemplated to be part of the NAIC), with a
governing board composed of state or district insurance
regulators, and with director eligibility open to all state or
district insurance commissioners, directors and superintendents.
- RSRD criteria relating to ceded premium volume will not
unfairly discriminate against otherwise qualified small
jurisdictions from approval as a home state or POE state
supervisor.
The current NAIC Credit for Reinsurance Model Act remains in
place for reinsurers that do not choose to become either national or
POE reinsurers.
For more information, visit
www.naic.org/committees_e_reinsurance.htm.
SERFF Surpasses 500,000 Transactions
Speed-to-Market Tool Reaches Milestone During 10th
Anniversary Year
The NAIC announced that the System for Electronic Rate and Form
Filing (SERFF) reached a milestone in the month of November,
surpassing 500,000 filing transactions year-to-date.
The speed-to-market tool is projected to surpass 550,000
transactions by the end of December 2008. This accomplishment would
top the 2007 filing record by more than 160,000 — capping off
SERFF’s 10-year anniversary celebration.
"Ten years ago, many believed a nationwide system for the
submission and review of rates and forms was only a dream," said
NAIC President-Elect and New Hampshire Insurance Commissioner Roger
Sevigny, who chairs the SERFF Board of Directors. "Today, that dream
is a reality for regulators and insurers alike. In fact, the
efficiencies that have resulted from using SERFF are a huge reason
many states only accept filings via SERFF."
Nineteen states have either implemented a mandate of SERFF or
announced their intent to mandate the use of SERFF in 2009. Ten
states have mandated that their filing fees be paid via electronic
funds transfer (EFT).
In addition, 50 jurisdictions representing 144 business areas
have shown their commitment to uniformity by implementing the
product coding matrices — an NAIC membership initiative. Forty-four
of those jurisdictions have fully implemented all business areas.
For more information about SERFF, visit
www.serff.org.
NAIC Adopts 2009 Budget
The NAIC adopted the 2009 operating budget at the Winter meeting.
"We have crafted a 2009 budget that allows us to increase our
support of member initiatives and state participation in NAIC
activities," said NAIC President-Elect and New Hampshire Insurance
Commissioner Roger Sevigny. "In doing so, we are keeping our
commitment to protect policyholders and ensure strict regulatory
oversight of the insurance industry."
NAIC resources are continually evaluated and aligned with
important and priority membership services, products, systems and
data that serve as the backbone of a complex variety of state
insurance regulatory programs and tools.
The 2009 budget proposes revenues and expenses of $73.1 million
and $70.7 million, respectively, forecasting revenue growth of 7.1%.
The NAIC’s expense budget is projected to grow by 6.3%, largely
indicative of the NAIC’s continued investment in membership services
and proposal supporting the membership’s strategic initiatives.
New initiatives include:
- Continued investment in the State Producer Licensing
Reengineering project, representing consulting resources and one
full-time employee.
- Allocation of NAIC resources to the Market Conduct Annual
Statement proposal to (1) prepare and support the existing MCAS
process (updating it to collect 2008 data filed in 2009); (2)
enable the collection of data submitted by states to the NAIC;
and (3) automate the aggregation of data for limited analysis
and the creation of national ratios and averages by the NAIC,
which is still subject to discussion by the NAIC membership in
the coming months.
- A proof-of-concept proposal to evaluate the scope, timeline
and potential costs of leveraging the Florida Office of
Insurance Regulation’s Public Hurricane Risk and Loss Model in
order to build a national multi-peril model administered by the
NAIC for use by states potentially affected by natural
catastrophes.
- The addition of one full-time employee to support of the
NAIC’s goals and priorities in the work of the International
Association of Insurance Supervisors (IAIS).
NAIC staff began working on the budget in May and formally
presented it to the membership in September. A public hearing was
held in November to provide insurance trade associations and
consumer representatives, as well as NAIC members, an opportunity to
provide comments.
For more information about the NAIC budget, please visit
www.naic.org/about_budget.htm.
Kansas, Texas Regulators Earn NAIC’s Highest Individual Honor
Bruning, Smith-Daley Receive 2008 Robert Dineen Award
The NAIC honored two regulators with the 2008 Robert Dineen Award
at the Winter national Meeting:
- Larry Bruning, FSA, MAAA, CLU, chief actuary at the Kansas
Insurance Department; and
- Ana M. Smith-Daley, deputy commissioner of the Life Health
Division at the Texas Department of Insurance.
"Both of these individuals truly represent the ‘best of the best’
in insurance regulation," said NAIC President and Kansas Insurance
Commissioner Sandy Praeger. "Their tireless efforts to improve
regulatory uniformity and cooperation at the national level through
the NAIC — all while maintaining a full workload at their home state
insurance department — have not gone unnoticed."
Larry Bruning
Since joining the Kansas Insurance Department in 2003, Bruning has
provided leadership, expertise and counsel in a national effort to
establish principles-based reserving, which is a new framework for
determining life insurers’ required capital and reserves.
In addition, Bruning has served as chair of the Life and Health
Actuarial Task Force, chair of the Accident and Health Working Group
and chair of the C-3 Phase II Results Subgroup. He has been a member
of the Capital Adequacy Task Force and the Life Risk-Based Capital
(RBC) Working Group. He also is active with the American Academy of
Actuaries, serving on the organization’s board of directors and its
Life Practice Note Working Goup.
"I often hear Larry’s praises from fellow regulators and industry
representatives, among others," Praeger said. "In particular, they
value his thoughtfulness of the issues, professionalism in dealing
with difficult matters and overall effectiveness in communicating
complex, technical information."
Ana M. Smith-Daley
During her tenure, Smith-Daley has actively and effectively promoted
insurance regulatory modernization efforts by playing an
indispensable role in developing product standards that embody the
highest levels of consumer protection and filing efficiencies.
In addition, Smith-Daley has served as a member of the Interstate
Compact National Standards Working Group, Operational Efficiencies
Working Group, Senior Issues Task Force and Long-term Care Working
Group. She is active with the Interstate Insurance Product
Regulation Commission (IIPRC), serving as chair of its Product
Standards Working Group. She also served on an ad hoc team to
integrate IIPRC into the NAIC’s System for Electronic Rate and Form
Filing (SERFF).
"Ana has been very active at the NAIC and is viewed as a leader
among regulators," Praeger said. "In particular, her work on the
Interstate Compact has been enormously helpful in moving a diverse
coalition of states toward a common goal — to the benefit of
regulators, consumers and the industry alike."
About the Dineen Award
Established in 1989 and named in honor of the founder of the NAIC’s
Support and Services Office, the Robert Dineen Award is presented to
an individual in recognition of his or her outstanding achievement
as a career regulator. It is the highest individual honor bestowed
by the NAIC. For more information, visit
www.naic.org/members_dineen.htm.
SEC Adopts Rule 151A
The NAIC has expressed disappointment with the U.S. Securities
and Exchange Commission’s (SEC) adoption of Rule 151A on December
17. The move challenges state insurance regulatory oversight.
"We are extremely disappointed by today's SEC decision," said
NAIC Vice President and Iowa Insurance Commissioner Susan Voss.
"State insurance commissioners have taken active steps to protect
consumers of equity-indexed annuities — and will continue to do so."
Equity-indexed annuities, as a form of fixed annuities, are
currently regulated by state insurance departments. State laws
subject the products, the companies and producers selling these
products to state insurance regulatory oversight. With adoption of
the proposed rule, it is anticipated the SEC could begin regulating
indexed annuity products as securities after a two-year transition
period.
"We are very dismayed the SEC chose to ignore thousands of
comment letters opposing this rule," Voss said. "As insurance
products, equity-indexed annuities are subject to extensive and
ongoing regulatory initiatives taken by insurance regulators and
numerous state insurance laws. The states have a demonstrated record
of consumer protection, and we do not believe this rule is in the
best interest of insurance consumers."
Save the date for the NAIC Spring 2009 National Meeting: March 15
- 18, 2009, at the Manchester Grand Hyatt, San Diego, California.
Back to top
Calls for State Solidarity
The NCOIL issued a release on December 10 applauding The Council
of State Governments (CSG) for again stating its opposition to
federal insurance chartering and called on state officials to
convene a strategy meeting to discuss financial regulatory reform.
NCOIL President Senator James Seward (NY) commended the CSG for
adopting a Resolution Opposing Continuing Federal Insurance
Chartering Efforts during its recent December 3 through 7 Annual
State Trends & Leadership Forum in Omaha, Nebraska.
Sen. Seward said:
NCOIL agrees with the CSG resolution—which strongly opposes
the creation of federal insurance mechanisms, such as an
optional federal charter (OFC) and an Office of Insurance
Information (OII). NCOIL, like the CSG in its resolution, also
aggressively refutes the implication that failures at American
International Group (AIG) somehow reflect on state regulatory
oversight—a myth that has been debunked several times over.
Sen. Seward reinforced the need for state officials to come
together and develop consensus positions regarding the future of
regulatory reform. Legislators and certain insurance commissioners
had supported the idea during a Legislative Liaison session at the
NAIC Winter Meeting in Texas.
The NCOIL President said, "States cannot sit idly by as our
carefully crafted consumer protection laws and strong solvency
requirements are replaced by an untested federal system. The ongoing
financial crisis has again confirmed that deregulation via optional,
or mandatory, federal regulation does not protect American
consumers."
Sen. Seward continued, "Next year it will be more important than
ever for state officials, including governors, attorneys general,
insurance commissioners, and legislators, to work in unison to
safeguard our regulatory authority to protect our consumers and
businesses. The business of insurance provides millions of jobs to
our constituents and is a top five revenue source in every state
across our nation."
Announcing plans for a strategy summit of state officials, Sen.
Seward said, "We will soon send letters of inquiry to leadership of
national organizations, including the NAIC, National Governors
Association (NGA), National Association of Attorneys General (NAAG),
and the National Conference of State Legislatures (NCSL) to gauge
interest in a joint meeting. Recognizing that time is of the
essence, we should gather early next year so the states may have a
unified voice in Washington, DC."
The CSG Resolution was signed by CSG President Governor Jodi M.
Rell (CT) and by CSG Chair Representative Kim Koppleman (ND) on
December 6. NCOIL President-Elect Rep. Robert Damron (KY) and NCOIL
Past President Rep. Brian P. Kennedy (RI) were among the
resolution’s co-sponsors. NCOIL is an organization of state
legislators whose main area of public policy interest is insurance
legislation and regulation. Most legislators active in NCOIL either
chair or are members of the committees responsible for insurance
legislation in their respective state houses across the country.
More information is available at
www.ncoil.org.
For further details, please contact the NCOIL Washington, DC Office
at 202-220-3014, or by e-mail at
mhumphreys@ncoil.org.
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Teresa Miller became acting administrator of the Oregon Insurance
Division on Nov. 1, 2008. A graduate of Willamette University
College of Law, Miller worked as former Governor Ted Kulongoski’s
legislative director, playing a key role in developing his
legislative agenda and working with legislators and stakeholders. It
is in that role that she became familiar with the Insurance Division
and its parent agency, the Oregon Department of Consumer and
Business Services.
Teresa came to the Insurance Division as deputy administrator in July 2008
after handling consumer protection cases for the Oregon Department
of Justice.
 Several
states chose new commissioners in the 2008 general election (left to
right): Karen Weldin Stewart is the Commissioner-Elect for
Delaware’s Insurance Department. Montana citizens elected Monica
Lindeen as Commissioner of the Montana Insurance Department. Wayne
Goodwin won the election as Commissioner in the North Carolina
Insurance Division. More information will be published regarding
these commissioners after they assume their new offices.
The Illinois Division of Insurance and the North Dakota Insurance
Department have chosen State Based Systems (SBS) as their regulatory
system of choice.
"We believe that technology is the most important tool for
improving our ability to rapidly respond to an ever-expanding
customer base, while also contending with limited resources," said
North Dakota Insurance Commissioner Adam Hamm. "SBS, along with its
full integration with key NAIC and NIPR initiatives, allows us to
dramatically improve our online toolset, while minimizing our
costs."
"Achieving regulatory uniformity with other insurance departments
is a key priority for our division," said Illinois Insurance
Director Michael McRaith. "SBS offers the unique opportunity to
compare our processes and procedures with those of other SBS states
simply by implementing the system. The decision to move to SBS
illustrates our commitment to participating in uniformity
initiatives and streamlining regulatory compliance processes for our
producers and insurers."
"We are pleased to add Illinois and North Dakota to the family of
SBS states," said NAIC President and Kansas Insurance Commissioner
Sandy Praeger. "SBS is a key initiative for state-based insurance
regulation. And, as an NAIC product, it is uniquely positioned to
continue to grow and improve over time based on its sole focus of
meeting the needs of our members."
In addition to Illinois and North Dakota, SBS is the solution of
choice in Alabama, Delaware, Florida, Iowa, Kansas, Missouri, New
Hampshire, New Jersey, North Carolina, Puerto Rico, Rhode Island,
Tennessee and Washington, D.C.
For more information about SBS, visit
www.statebasedsystems.com.
Fifty Jurisdictions Meet Solvency Oversight Standards
Six state insurance departments received Accreditation Awards on
December 5 as part of the NAIC Financial Regulation Standards and
Accreditation Program. During the Opening Session of its 2008 Winter
National Meeting, NAIC President Sandy Praeger made the presentation
to California, Florida, Georgia, Illinois, Utah & Wisconsin.
Accredited insurance departments are required to undergo a
comprehensive review by an independent review team every five years
to ensure the departments continue to meet baseline financial
solvency oversight standards. The accreditation standards require
state insurance departments to have adequate statutory and
administrative authority to regulate an insurer’s corporate and
financial affairs, as well as the necessary resources to carry out
that authority.
Forty-nine states and the District of Columbia continue to be
accredited by the NAIC.
At its Winter National Meeting on December 5, the NAIC bestowed
its Esprit de Corps Award to the New York State Insurance
Department. This is the third time the NAIC has given the award. The
award was presented during Opening Session by NAIC President and
Kansas Insurance Commissioner Sandy Praeger.
"Under the leadership of Superintendent Eric Dinallo, New York
was instrumental in working with Pennsylvania and other states in
mobilizing the NAIC’s pursuit of consumer protection during the AIG
situation," Praeger said. "New York’s active participation in the
NAIC is truly a demonstration of sincere commitment and
cooperation."
Members of the New York State Insurance Department serve on many
NAIC committees, task forces and working groups — most notably as
chair of the Life Insurance & Annuities Committee, Financial
Condition Committee, Capital Adequacy Task Force and Receivership &
Insolvency Task Force.
In addition, Dinallo has testified before Congress numerous
times, serving as an outstanding ambassador for state-based
insurance regulation and resource for our colleagues on the Hill.
The Esprit de Corps Award was established in 2006 to recognize
outstanding service to the NAIC and the demonstration of a spirit of
cooperation with its members. The name of the award was chosen
because "Esprit de Corps" is defined as "a common spirit of
comradeship, enthusiasm and devotion to a cause among the members of
a group."
On December 5, North Carolina Insurance Commissioner Jim Long
became the first recipient os the NAIC President’s Award for
Distinguished NAIC Member Leadership. Long, who is retiring after 24
years as insurance commissioner, was presented with the award by
NAIC President and Kansas Insurance Commissioner Sandy Praeger. The
award honors an NAIC member who has shown exemplary leadership;
served a sustained length of service; and has significantly
contributed to advancing the mission of the NAIC.
"This award recognizes Jim as an advocate for the merits of
state-based insurance regulation and a champion of the NAIC,"
Praeger said. "Since his start on the job in 1985, Jim has
accomplished a great deal as an insurance commissioner and
contributed enormously to the growth and success of our
association."
Long’s accomplishments include:
- 1985 – 2008: North Carolina Insurance Commissioner
- 1990: NAIC Vice President
- 1991: NAIC President
- 1992: NAIC Immediate Past President
- 1997; 1998; 2001; 2005; 2007; 2008: NAIC Most Immediate Past
President
- 2002 – 2008: Chair, NAIC Information Resources Management
Committee
- 2005 – 2008: Promoted Compact legislation; served as a
member of Interstate Insurance Product Regulation Compact
Commission
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On December 17, 2008, the Securities and Exchange Commission
approved a new rule to help protect seniors and other investors from
fraudulent and abusive practices that can occur in the sale of
equity-indexed annuities.
Equity-indexed annuities, first introduced in the mid-1990s, have
grown significantly over the years. In 2004 alone, sales of
equity-indexed annuities increased more than 50 percent to
approximately $23 billion. Today, more than $123 billion is invested
in equity-indexed annuities.
Equity-indexed annuities are often sold to seniors and can lock
up older investors' money for more than a decade. Until now, the
question of whether equity-indexed annuities are insurance products
or securities subject to investor protections under the federal
securities laws has not been clearly answered. The rule that the SEC
approved establishes, on a prospective basis, the standards for
determining when equity-indexed annuities are considered not to be
annuity contracts under the securities laws and thus subject to the
investor protections against fraud and misrepresentation, limiting
the potential for sales practice abuses in the promotion of
equity-indexed annuities to older investors.
"Investors who buy equity-indexed annuities are typically looking
for a safer way to invest in securities. But if those investors need
their money for medical expenses or rent, for example, they risk
losing a substantial amount of the investment. At the same time,
their upside is typically limited to less than what they would have
gained by directly buying the indexed securities. Unfortunately,
many equity-indexed annuities appear to have been marketed to
investors who may be least able to scrutinize these details,
including America's seniors," said SEC Chairman Christopher Cox.
"Senior investors will particularly benefit from these additional
safeguards against abusive sales practices by unscrupulous
marketers," Chairman Cox continued. "Investors in all types of
securities are uniformly entitled to regulatory protections, and the
SEC's action today will result in the extension of these same
protections to investors in equity-indexed annuities who are exposed
to investment risk."
The SEC's new rule defines the terms "annuity contract" and
"optional annuity contract" under the Securities Act of 1933. The
rule clarifies the status under the federal securities laws of
equity-indexed annuities, under which payments to the purchaser are
dependent on the performance of a securities index.
Section 3(a)(8) of the Securities Act provides an exemption under
the Securities Act for certain insurance and annuity contracts. The
SEC's new rule provides that an indexed annuity is not an "annuity
contract" under this insurance exemption if the amounts payable by
the insurer under the contract are more likely than not to exceed
the amounts guaranteed under the contract.
The SEC's rule addresses the manner in which a determination will
be made regarding whether amounts payable by the insurance company
under a contract are more likely than not to exceed the amounts
guaranteed under the contract. The rule is principles-based,
providing that a determination made by the insurer at or prior to
issuance of a contract is conclusive if, among other things, both
the insurer's methodology and the insurer's economic, actuarial, and
other assumptions are reasonable.
The new definition applies only to equity-indexed annuities
issued on or after January 12, 2011. Complete information is
available at
http://sec.gov/rules/proposed/2008/33-8933.pdf.
The Treasury Department announced on December 5 that it
distributed 1.546 million additional stimulus payments in November,
totaling $1.092 billion. As of the end of November, a total of
118,919 million payments have been distributed totaling $96.130
billion since disbursements started April 28.
While mass disbursement of stimulus checks ended July 11, small
batches of payments continue to be sent out to American households.
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