Sen. Thomas Harkin (D-Iowa) has offered an amendment to the financial reform bill, S. 3217 (the Restoring Financial Stability Act), that would give states explicit authority to regulate indexed annuities.
The amendment, S.A. 3920, would define indexed annuities as insurance products and nullify Rule 151A, an effort by the Securities and Exchange Commission to classify indexed annuities as securities and put regulation of the products in the hands of securities regulators. According to the text of the amendment:
“Rule 151A promulgated by the Securities and Exchange Commission and entitled ‘Indexed Annuities and Certain Other Insurance Contracts,’…shall have no force or effect.’”
The initial amendment cosponsors are Sens. Charles Grassley (R-Iowa), Earl Benjamin Nelson (D-Nebraska), Michael Johanns (R-Nebraska) and Patrick Leahy (D-Vermont). The text of the Harkin amendment is identical to that of H.R. 2733, an indexed annuity bill introduced by Reps. Gregory Meeks (D-New York), and Thomas Price (R-Georgia). Sen. Nelson is the primary sponsor of S. 1389, the H.R. 2733 companion bill.
Senators are now debating S. 3217 on the floor, and they may resume voting on motions and amendments as early as today (Tuesday). Insurance industry lobbyists believe efforts will be made to limit debate on the bill to 30 hours either Thursday or Friday. If a motion to limit debate passes, a final vote on the bill could occur by next Tuesday (May 18).
S.A. 3920 is far from the only amendment awaiting action, and it is far from certain that lawmakers will end up debating the amendment, let alone voting on it. Lawmakers have introduced scores of amendments, and a number of amendments that refer directly to insurance, insurers or annuities. Accordingly, I strongly recommend that you make your position known to your representatives about Rule 151A and this proposed legislation. Please make some calls and write some letters today (e-mail is fine).