1.8.5 Intervention by the SEC (1959)
A year later, the Securities and Exchange Commission (SEC) presented its own challenge to the industry. At issue were variable annuities and variable life insurance. The Supreme Court ruled that even though the bulk of the insurance industry is regulated at the state level, regulation of these variable products should go to the SEC. Variable annuities were considered investment products and were defined as "securities" rather than "insurance." Yet the products are sold by licensed insurance professionals and, therefore, SEC regulations required agents to hold a securities license before selling any variable annuity.
WE BOTH WIN...!!!
NOTE: Agents who want to sell variable annuities must be properly licensed by the state after examination in both the life and variable annuity areas, and be appointed as a life including variable annuity insurance agent by the insurance company underwriting the risk (see page 472, "What are the variable annuity licensing requirements?" in the Florida study manual).
