Duplicative, Confusing, And Legally Inaccurate: The Sec's Attempt to Regulate Fixed Indexed Annuities‪.‬

I. INTRODUCTION Across the United States many investors have seen their portfolios' value fall significantly during the recent credit crisis. Because of this, investors are reminded of the risk associated with equity investments. This is the risk equity investors take in exchange for the chance to participate in theoretically limitless profits. One financial product--a Fixed Indexed Annuity (FIA)--offers its owners the opportunity to participate in the gains of the stock market (albeit, not limitless gains), with zero downside risk. However, the cost of an FIA may soon increase, thanks to a new rule that the Securities and Exchange Commission (SEC) recently finalized, Rule 151A (the Rule), which is now tied up in litigation. (1) The D.C. Court of Appeals remanded the rule to the SEC to address problems with the SEC's analysis of "efficiency, competition and capital formation" as required under section 2(b) of the Securities Act of 1933 ('33 Act). (2) Should the Rule withstand the aforementioned challenges, it would reclassify all FIAs as securities products rather than insurance products (3) as soon as mid-2012. (4)