HB 846 -- SECURITIES REGULATION

SPONSOR:  Page

COMMITTEE ACTION:  No executive action taken by the Committee on
Insurance Policy.

This bill changes the definition of "security" as it is used in
the laws regulating securities so that the sale of variable
annuities will be regulated by the Secretary of State.
Currently, the sale is regulated by the Department of Insurance.

FISCAL NOTE:  Estimated Income on General Revenue Fund of $24,500
in FY 2006, FY 2007, and FY 2008.  No impact on Other State Funds
in FY 2006, FY 2007, and FY 2008.

PROPONENTS:  Supporters say the bill clarifies that the
Department of Insurance will regulate variable annuity products.
Too often agents selling variable annuity products may not be
capable of determining the client's specific investment needs and
may sell a product that is not appropriate for their client.  A
71-year-old person was sold a variable annuity that was attached
to technology stocks.  The $1 million investment became $500,000
in no time at all.  It was definitely not appropriate to sell a
71-year-old person a variable annuity.  The bill will help stop
similar situations from happening.

Testifying for the bill was Representative Page.

OPPONENTS:  Those who oppose the bill say that the Department of
Insurance is already in charge of regulating these products.
Variable annuities are one of the most heavily regulated
financial products in today's market place.  Missouri's insurance
code strictly governs inappropriate replacements and
misrepresentations in the sale of insurance and annuity
contracts.  The bill will result in redundant and possibly
conflicting patterns of regulation that will disrupt the market
and cause more expensive insurance and annuities for consumers.

Testifying against the bill were MetLife; General American; Life
Insurance Association of Missouri; Prudential Insurance; American
Council of Life Insurers; and Missouri Insurance Coalition.

OTHERS:  Others testifying on the bill say the Department of
Insurance currently has the authority to regulate these products;
however, no regulations have been drafted.  The department plans
to work with the parties involved to draft regulations in the
next few months.

Others testifying on the bill was Department of Insurance.

Marc Webb, Legislative Analyst

Missouri House of Representatives
93rd General Assembly, 1st Regular Session
Last Updated August 25, 2005 at 1:20 pm