NASD and State Regulators Support Suitability Rule for Fixed Annuities

Fixed annuities are considered insurance products and regulated by the insurance industry, while variable annuities are considered securities and are regulated as such.  Thus, there has been confusion about whether insurance salesmen have a suitability obligation in recommending fixed annuities.  NASD and state regulators from North Dakota, Iowa and Minnesota announced today that they have signed a joint statement supporting a new rule to require that insurance companies and agencies recommend only suitable annuity products to their customers.