UPDATE - Appeals Court Vacates Rule 151A

Wanted to post this update first thing this morning when my Google Alert popped it up...looks like things are moving in the right direction on 151A! Stay tuned as I'll keep posting as news develops! Few excerpts below and a link to the full article.

P.S. You might notice the blog/website has gotten a "face lift", stay tuned for more changes including an article library, more videos of sales ideas, more ways to interact and network and more!

A 3-judge panel at the D.C. Circuit Court of Appeals has granted the plaintiffs' request for a rehearing in American Equity vs. SEC because the panel agrees with the plaintiffs' view that the SEC "failed properly to consider the effect of the rule upon efficiency, competition, and capital formation."

"The SEC argues it is likely to reissue Rule 151A but it also acknowledges it is in the midst of analyzing the effect of the rule upon the law of each state," the panel says. "As the petitioners point out, the commission cannot know whether that analysis will support reissuing Rule 151A until it has been completed."

The decision to grant the request for a rehearing revises a decision the same panel issued in July 2009. The said then that the SEC's efforts to analyze the effects of Rule 151A on securities market efficiency, competition and capital formation were “lacking.”

The panel says in its latest decision that the SEC “cannot justify the adoption of a particular rule based solely on the assertion that the existence of a rule provides greater clarity to an area that remained unclear in the absence of any rule.”

Eric Marhoun, general counsel of Old Mutual Insurance Company, Baltimore, one of the leaders of efforts to fight Rule 151A, welcomed the appeals court ruling.

“Most likely this means that the SEC will drop efforts to regulate this product,” Marhoun says. "We are very pleased by the court’s action because it wipes the slate clean and clarifies that Rule 151A is null and void. This was a big victory both for agents and for consumers who have come to rely on the guarantees provided by FIAs, but we plan to stay vigilant until we're sure the threat has passed."

Because the court vacated Rule 151A, the SEC must completely start over. The SEC can now rethink the rule and may simply drop it, Bartz says.

Full Article