By Steven A. Morelli, Senior Editor
June 24, 2010 -- The financial reform bill includes an amendment to keep indexed annuities under state regulation in a surprising, 11th-hour vote by the House and Senate side of the HR 4173 conference committee.
The House committee members voted 12-4 today to include the amendment sent over by the Senate members after they approved it by 8-4 Tuesday night. The amendment was proposed by Sen. Tom Harkin, D-Iowa, who faced opposition from some in his own party. Reportedly, Rep. Barney Frank, D-Mass., whose House bill the amendment now hangs on, did not want the annuity rule but saw that Harkin had the required votes on the House side.
The finance reform bill still faces a tough slog through the House on its way to approval. The latest skirmish over the bill is a provision on derivatives, which threatens to upend the entire legislation, according to a Wall Street Journal report.
The Harkin amendment’s inclusion is a surprise because it was not part of either the House or Senate version of the finance reform bills when they were approved last year. A committee has been reconciling the two and it was only moments before the Senate version was sent to the House side of the committee that the amendment was approved.
The amendment would allow states that have adopted the National Association of Insurance Commissioners’ model regulations to regulate the products, nullifying the Securities and Exchange Commission’s Rule 151A. The SEC adopted Rule 151A in the last days of the Bush administration but was put on hold by a federal district court because of a lawsuit brought by American Equity and others. The SEC has not yet responded to the judges’ request for a new procedural review.
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