Illinois Order Intimates Indexed Annuities Are Securities
Monday, June 6, 2011 at 11:27AM 
The Illinois Securities Department has issued an order that treats indexed annuities as securities.Illinois Secretary of State Jesse White, who oversees the department, recently entered the order in connection with In the Matter of: Senior Financial Strategies Inc., d/b/a Pinnacle Investment Advisers, Thomas N. Cooper and Susan B. Cooper (File Number 0800064).
After a three year investigation into the Illinois firm , the May 24 order barred these particular advisors from selling securities in the state of Illinois. The matter involved annuity transfers from older annuities to fixed indexed annuities even though the older products were still in their surrender periods. This order is significant as it is evident that at least the state of Illinois classifies fixed indexed annuities as securities.
Last year's Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 said that fixed indexed annuities were not classified as securities. This new order may start the discussion again.
NAFA Executive Director Kim O’Brien tells ANN what may be ahead and what advisors need to be aware of.
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