A Report From Creative Marketing on the Fight Against 151A: Friday, May 8, 2009 Hearing

by Mike Tripses, President of Creative Marketing, Chairman of NAFA

The fight against SEC Rule 151A continued May 7 and 8 in Washington, D.C. Unless defeated, Rule 151A will require that indexed annuities become registered investment products. There are two parallel efforts to defeat the rule—judicial and legislative. On behalf of its producers and annuity carriers, Creative Marketing continued the fight, contributing money, time and talent.

The U.S. Circuit Court of Appeals hearing on the lawsuit filed by the Coalition for Indexed Products was held Friday, May 8 (with Creative’s Mike Tripses in the audience). Coalition attorneys contested the SEC’s rulemaking behavior and argued that the SEC’s concept of “investment risk” is unreasonable and without legal authority. The SEC argument is that the possibility of interest earnings in excess of the guaranteed minimum return is sufficient to constitute “investment risk”, but seemingly only for indexed annuities. Coalition attorneys argue that “investment risk” has always been focused on the risk of loss and not the risk of gain. Coalition attorneys are guardedly optimistic and expect a court decision by August.

The NAFA Annual Meeting and Summit, May 6-8, also in Washington, D.C., was focused on legislative efforts to defeat Rule 151A. NAFA is supporting efforts to pass a bill in Congress that would state that indexed annuities are fixed annuities under Federal securities law and that Rule 151A must be withdrawn. This bill is sponsored by Representatives Greg Meeks (R-NY) and Tom Price (R-GA) and will be submitted soon for Congressional action.

NAFA organized a series of meetings on Capitol Hill with Congressmen and staffers. Over 50 NAFA members educated all of our representatives on the 151A issues and our interests, and asked for additional co-sponsors of the Meeks-Price Bill. NAFA is also funding a public relations effort to obtain passage of the bill. Indexed Annuity producers need to give this effort their financial and political support, by their contributions to the NAFA campaign and their communications to their individual Congressional representatives. As a result of our request and your generosity, over $3,000 has been already contributed by Creative agents toward the cause. Go to http://www.creativemarketing.net/nafastop151a to contribute, obtain Congressional member contact information, and prepared talking points and letters so you can add your voice to the lobbying effort.

NOW is the time to join the fight against SEC Rule 151A when your help most matters. We ask you to partner with Creative Marketing and NAFA in support of this legislation. This may be the best opportunity to preserve the indexed annuity value proposition for your clients and yourselves. Thank you for all your help.

FOR AGENT USE ONLY – NOT FOR USE WITH THE GENERAL PUBLIC