Equity indexed annuities, which provide investors a portion of the market’s rise but do not decline in value when the market falls, have become increasingly popular among seniors.


The Securities and Exchange Commission is looking to change that, The Wall Street Journal reports, by shifting oversight of EIAs from the 50 state insurance commissioners to the SEC, and treating them like securities rather than insurance products and permitting only licensed brokers—adhering to strict suitability provisions—to sell them.


The SEC’s main concern is that salespeople have been pressuring older investors, for whom the long lock-up periods may not be suitable, into buying them, at that, without properly explaining fees, surrender charges or other penalties.


It is expected the SEC will require insurance carriers to disclose the fees equity index annuities charge, along with a clear explanation of how they work along with performance.


Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.