Federal Legislative Developments

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The U.S. Securities and Exchange Commission (“SEC”) has recently proposed regulations that would limit fund sales charges and increase disclosure requirements under Rule 12b-1.  Rule 12b-1, adopted under the Investment Company Act of 1940, permits mutual funds to use a portion of fund assets to pay for the cost of promoting sales of fund shares, effectively eliminating sales load charges. …
Read More SEC Calls for New Limits on Use of 12b-1 Distribution Fee Provisions in the Mutual Funds of Variable Annuity Subaccounts

This updates our July 23, 2010 posting.  Rep. Gene Taylor’s (D.-Miss.) Multiple Peril Insurance Act (H.R. 1264) failed to reach a floor vote prior to U.S. House of Representatives’ month-long recess that began this week.  H.R. 1264 would expand the National Flood Insurance Program (“NFIP”) to cover windstorm insurance.  The measure will not be picked up again until the House reconvenes in September. …
Read More Multiple Peril Insurance Act Stalls In House While Compromise Bill Introduced In Senate

Spurred by media reports alleging deception by some life insurers in their use of retained asset accounts[1] for disbursing death benefits to the beneficiaries of fallen United States military personnel and the apparent lack of oversight by federal and state regulators, New York Attorney General, and gubernatorial hopeful, Andrew Cuomo has issued subpoenas to leading life insurers regarding their alleged “reaping [of] hundreds of millions in secret profits while misleading families into putting benefits into insurer controlled, low yield, potentially risky accounts.” …
Read More Life Insurer Use of Retained Asset Accounts Under Fire by State Attorneys General

The enactment of the Comprehensive Iran Sanctions, Accountability and Divestment Act of 2009 (the “Iran Sanctions Act”), signed by President Obama in the first week of July, threatened the status quo regarding the insurance and reinsurance by international insurance firms of risks relating to the Iranian petroleum industry, including cargos of oil and petrochemical equipment. …
Read More A Consensus Emerges on Iranian Sanctions: Compliance May be Easier for Global Insurers

Proposed legislation that would limit a tax deduction for reinsurance premiums paid to a foreign affiliate of a US insurer has drawn the formal opposition of the German government.  Ambassador Klaus Scharioth, in a recent letter to House Ways and Means Chairman Sander Levin (D-MI), said that the so-called Neal Bill (HR 3424) “goes well beyond” the undisputed goal of combating tax avoidance and evasion and, as a result, conflicts with provisions of the German-US tax treaty. …
Read More German Government Opposes US Legislation Limiting Deductibility of Reinsurance Premiums

In response to the Centers for Medicare and Medicaid Services’ (CMS’) proposed hospital inpatient rule for FY 2011, lawmakers urged the agency to reconsider payment reductions in a July 12 letter.  The following week, the agency released its proposed rules for home health and skilled nursing facilities.  In other news, the Department of Health and Human Services (HHS) issued final rules for achieving “meaningful use” of electronic health records. …
Read More Healthcare News from Capitol Hill and the Department of Health and Human Services – July 26, 2010

The Obama Administration, through the Office of Management and Budget, has reiterated its position that it is against the expansion of the National Flood Insurance Program (“NFIP”) to include coverage for windstorm damage. …
Read More Obama Administration Reiterates Opposition of NFIP Expansion to include Windstorm Coverage

The Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 (collectively, the “Affordable Care Act”) require group health plans and insurers that provide dependent coverage to extend health care coverage to adult children until they reach age 26. …
Read More Extension of Group Health Plan Coverage to Adult Children

This updates our December 22, 2008 blog, and other related postings.  In December 2008, the U.S. Securities and Exchange Commission (the “SEC”) adopted Rule 151A (the “Rule”) classifying equity-indexed annuities (“EIAs”) as securities, and subjecting them to federal regulation effective 2011.  The Rule has been hotly debated, as some believe that EIAs are adequately regulated by states and that federal regulation would only result in additional costs in registering and selling the products. …
Read More Financial Reform Package Preserves the Role of State Insurance Departments in Regulating Indexed Annuities

The National Flood Insurance Program (“NFIP”) expired on May 31, 2010 and, for the third time this year, the NFIP lapsed for a month.  On July 1, 2010 the NFIP was reauthorized retroactive to June 1, 2010 and this reauthorization will expire on September 30, 2010. …
Read More National Flood Insurance Program Reinstated by Temporary Extension