(a) Any annuity contract or optional annuity contract (a contract) shall be deemed to be within the provisions of section 3(a)(8) of the Securities Act of 1933 (15 U.S.C. 77c(a)(8)), Provided, That
(1) The annuity or optional annuity contract is issued by a corporation (the insurer) subject to the supervision of the insurance commissioner, bank commissioner, or any agency or officer performing like functions, of any State or Territory of the United States or the District of Columbia;
(2) The insurer assumes the investment risk under the contract as prescribed in paragraph (b) of this section; and
(3) The contract is not marketed primarily as an investment.
(b) The insurer shall be deemed to assume the investment risk under the contract if:
(1) The value of the contract does not vary according to the investment experience of a separate account;
(2) The insurer for the life of the contract
(i) Guarantees the principal amount of purchase payments and interest credited thereto, less any deduction (without regard to its timing) for sales, administrative or other expenses or charges; and
(ii) Credits a specified rate of interest (as defined in paragraph (c) of this section to net purchase payments and interest credited thereto; and
(3) The insurer guarantees that the rate of any interest to be credited in excess of that described in paragraph (b)(2)(ii) of this section will not be modifed more frequently than once per year.
(c) The term specified rate of interest, as used in paragraph (b)(2)(ii) of this section, means a rate of interest under the contract that is at least equal to the minimum rate required to be credited by the relevant nonforfeiture law in the jurisdiction in which the contract is issued. If that jurisdiction does not have any applicable nonforfeiture law at the time the contract is issued (or if the minimum rate applicable to an existing contract is no longer mandated in that jurisdiction), the specified rate under the contract must at least be equal to the minimum rate then required for individual annuity contracts by the NAIC Standard Nonforfeiture Law.
[51 FR 20262, June 4, 1986]
Notes of Decisions
Am. Equity Inv. Life Ins. v. Sec. & Exch. Comm'n, 613 F.3d 166 (D.C. Cir. 2009).
· cites it 4× “In some guaranteed investment contracts, however, the insurer may agree to periodically pay the purchaser an additional discretionary amount above the already guaranteed return amount.”
Berent v. Kemper Corp., 780 F. Supp. 431 (E.D. Mich. 1991).
· cites it 3× “12 First, the contract must be issued by an insurer subject to supervision of the applicable state insurance department. Rule 151(a)(1).”
Malone v. Addison Ins. Mktg., Inc., 225 F. Supp. 2d 743 (W.D. Ky. 2002).
· cites it 4× “17, 1986) (noting that a contract which satisfies Rule 151 will be excluded from all provisions of the Securities Act).”
Assocs. in Adolescent Psychiatry v. Home Life Ins., 729 F. Supp. 1162 (N.D. Ill. 1989).
· cites it 2× “) The SEC has wrestled with these questions as well; after extensive consideration, the agency promulgated Rule 151, 17 C.F.R. § 230.151 , a safe-harbor provision that became effective on June 4, 1986 (and which the Court sets out in full later in this memorandum opinion).”
New Mexico Life Ins. Guar. v. Quinn & Co., 809 P.2d 1278 (N.M. 1991).
“17 C.F.R. § 230.151 (1989). In order to be eligible to rely on Rule 151, a contract must (1) be an annuity or optional annuity contract issued by an insurance company; (2) include certain guarantees of principal and interest sufficient for the insurer to be deemed to assume the…”
Luzerne Cnty. Ret. Bd. v. Makowski, 627 F. Supp. 2d 506 (M.D. Penn. 2007).
· cites it 3× “Rule 151 Safe Harbor The Court also notes that the SEC Rule 151 Safe Harbor, 17 C.F.R. § 230.151 , does not apply to the variable annuities purchased from Safeco, Provident and Manulife.”
Novinger Grp., Inc. v. Hartford Ins., Inc., 514 F. Supp. 2d 662 (M.D. Penn. 2007).
“See 17 C.F.R. § 230.151 . That rule states that an insurance contract is not to be considered a security if: (1) it is issued by an insurer subject to supervision of the applicable state insurance department, (2) the insurer assumes the investment risk under the contract, and…”
Holding v. Cook, 521 F. Supp. 2d 832 (C.D. Ill. 2007).
· cites it 2× “To support that conclusion, Fidelity asserts that the accounts meet the safe harbor provisions of Rule 151, 17 C.F.R. § 230.151 , which defines a certain subset of annuities as exempt under § 3(8)(a).”
Am. Equity Inv. Life Ins. v. Sec. & Exch. Comm'n, 572 F.3d 923 (D.C. Cir. 2009).
· cites it 4× “In some guaranteed investment contracts, however, the insurer may agree to periodically pay the purchaser an additional discretionary amount above the already guaranteed return amount.”
Am. Equity Inv. Life Ins. Co. v. SEC (D.C. Cir. 2010).
· cites it 4× “See 17 C.F.R. § 230.151 . Guaranteed investment contracts are like traditional fixed annuities, in that they promise a return at a guaranteed rate of return for the life of the contract.”
Rothwell v. Chubb (D.N.H. 1998).
· cites it 3× “Under Rule 151, an annuity or insurance policy is exempt under section 3(a)(8) if: (1) the contract is issued by an insurer subject to the supervision of the applicable state insurance department; (2) "the insurer assumes the investment risk under the contract"; and (3) the…”
— 17 C.F.R. § 230.151(b) — 1 case
Berent v. Kemper Corp., 780 F. Supp. 431 (E.D. Mich. 1991).
“12 First, the contract must be issued by an insurer subject to supervision of the applicable state insurance department. Rule 151(a)(1).”
— 17 C.F.R. § 230.151(c) — 1 case
Berent v. Kemper Corp., 780 F. Supp. 431 (E.D. Mich. 1991).
“12 First, the contract must be issued by an insurer subject to supervision of the applicable state insurance department. Rule 151(a)(1).”
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