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Rule 151: Exempt Annuity Contracts
Section 3(a)(8) of the Securities Act of 1933 exempts annuity or optional annuity contracts issued by a corporation supervised by an insurance commissioner, a bank commissioner, or a state regulatory authority from federal security regulations. Under Rule 151, the scope of exempt annuity contracts extents to the following criteria: • The insurer assumes investment risk according to the rules of the contract • The annuity contract is not solely an investment The insurer will be considered assuming the risk under the contract if the following criteria are met: • For the life of the contract the insurer: o Guarantees principal amount of purchase payments and credited interest minus administrative and sale fees o Credits interest rate equal to at least the minimum rate specified by applicable state law • The issuer guarantees the interest rate credited above the aforementioned minimum rate not be modified more than once per year |
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