NASD continues to tinker with a pending variable annuity suitability
rule, making a fourth proposed change in almost two years.
In an amendment filed with the Securities and Exchange Commission last
month, Washington-based NASD proposed that supervisory principals review
VA sales within seven days before submitting an application to an insurer.
Earlier, it had wanted the review done within five days after an
application was transmitted. But NASD said in its filing that a
post-sale review “is not workable.”
It said that canceling contracts that already had been issued could be
difficult.
“Some principals might hesitate to revoke” a sale, said Michael
DeGeorge, general counsel for NAVA Inc. in Reston, Va., formerly the
National Association for Variable Annuities.
“At least that’s the fear of some of the regulators,” he added.
Mr. DeGeorge said that NAVA has not taken a position on the latest
proposals.
The seven-day, pre-sale review period is a welcome change, said Victoria
Bach-Fink, chief compliance officer at Wall Street Financial Group Inc.
in Fairport, N.Y. The latest change is one in a series of about-faces by
NASD.
