1 See Memorandum to SEC Rules Committee No. 83-97, dated August 29, 1997.
2 See Memorandum to SEC Rules Committee No. 108-97, dated November 11, 1997.
[9556]
December 30, 1997
TO: SEC RULES COMMITTEE No. 121-97
RE: ICI LETTER ON SEC CONCEPT RELEASE REGARDING EQUITY INDEX
INSURANCE PRODUCTS
______________________________________________________________________________
The Institute has filed the attached letter on the SECs concept release soliciting
comment on the status of equity index annuities and other equity index insurance products
under the federal securities laws.1
The Institutes letter is substantially similar to the draft letter circulated previously to
you.2 The letter takes the position that all equity index insurance products ("EIPs") should be
registered under the federal securities laws. The letter expresses the view that these products
are not eligible for the exemptions for insurance contracts provided under Section 3(a)(8) of the
Securities Act, and that they are outside the safe harbor of Rule 151 under that Act for certain
annuity products. The Institutes position is based on the fact that investors, not insurers,
assume the primary risk under EIPs, and that EIPs can be fairly marketed only as securities
rather than as insurance products. Accordingly, EIPs present significant investor protection
concerns that can be addressed only by regulating them under the federal securities laws,
including provisions of the Investment Company Act.
Amy B.R. Lancellotta
Associate Counsel
Attachment (in .pdf format)