Who are variable annuities regulated by?
Regulation. Variable annuities are securities registered with the Securities and Exchange Commission (SEC), and sales of variable insurance products are regulated by the SEC and FINRA.
Are variable annuities regulated by the investment company Act of 1940?
The SEC regulates variable annuities under policies established by the Securities and Exchange Act of 1933 and the Investment Company Act of 1940. Each of them protects investors from fraud, conflict of interest, and misrepresentation.
Does the federal government regulate variable life policies?
In some ways, variable life insurance can be described as a form of securities. Why? Because of investment risks, variable policies are considered securities contracts. They are regulated under the federal securities laws.
What annuities are not regulated by the SEC?
Variable annuities are securities regulated by the SEC. An indexed annuity may or may not be a security; however, most indexed annuities are not registered with the SEC. Fixed annuities are not securities and are not regulated by the SEC.
What does FINRA Rule 2330 apply to?
Rule 2330 applies to only new recommendations in the form of a purchase or an exchange for a given client subaccount. It attempts to help the members provide recommendations for a deferred variable annuity only when it is required.
Who regulates variable life policy?
The Office of Insurance Products (OIP) is responsible for the regulation of variable insurance under the Investment Company Act of 1940.
Who can issue annuities?
Life Insurance. Life insurance companies and investment companies are the two primary types of financial institutions offering annuity products.
Are variable annuities regulated by SEC?
Variable annuities are securities registered with the Securities and Exchange Commission (SEC), and sales of variable insurance products are regulated by the SEC and FINRA.
Which FINRA rule covers suitability of sales of variable annuities?
FINRA Rule 2320
FINRA Rule 2320 (Variable Contracts of an Insurance Company) contains important requirements regarding cash and non-cash compensation arrangements associated with variable annuity sales.
Are variable annuities exempt securities?
Accordingly, variable annuities are not exempt from regulations under the Investment Company Act of 1940. Because most state laws still classify variable securities as insurance products, state securities regulators have traditionally been precluded from investigating complaints involving variable annuities.
Are variable annuities guaranteed?
Unlike a fixed annuity, variable annuities don’t offer any guaranteed return on your principal investment. But some investors are willing to take on this risk for greater potential returns.
Are variable annuities professionally managed?
Variable annuities and mutual funds are very popular investments. They both offer the average investor the benefits of professionally managed money and diversification.