Good News! On Monday, July 12, the United States Court of Appeals for the District of Columbia completely vacated 151A.
So, what does this mean? It means that the court effectively settled 151A. As far as the judicial branch is concerned, there is not sufficient evidence to suggest that indexed annuities should be regulated as securities. The court also reissued the entire ruling with the new language.
Here is language from the court’s order: “Having determined that the SEC’s Section 2(b) analysis is lacking, we grant the petitions insofar as they assert the SEC failed properly to consider the effect of the rule upon efficiency, competition, and capital formation…We therefore order that Rule 151A be vacated.”
Is the securities status of indexed annuities settled for good? According to Sheryl Moore, Advantage Group Associates, Inc., “No. Remember, the Securities and Exchange Commission first questioned the securities status of indexed annuities in 1997. They did so again in June of 2008 with their proposed rule 151A. If we want to ensure that indexed annuities will be regulated as fixed insurance products indefinitely, we need to continue our current legislative strategy.”
NAFA is indicating that if the Harkin Amendment passes (which it looks like it will), the law will legislate out the existence of 151A (meaning that the SEC will not have the power to pass regulations deeming FIAs as securities). [SAC]
Jerry L. Thomas
1925–2010
The brokerage industry has lost another icon — Jerry L. Thomas, founder and chairman of J.L. Thomas & Co., Inc., Cleveland, OH, passed away July 5.
In 1950, after graduating from the University of Pennsylvania Wharton School of Finance with a degree in economics, Thomas began his insurance career with Prudential, joining his father Willis B. Thomas, a Prudential agent for 40 years, in Pittsburgh, PA. Jerry received his CLU in 1953, presented by Dr. Solomon Huebner, founder of The American College and Thomas’ economics and insurance professor at Wharton.
Thomas moved to Cleveland in 1962 to manage the Acacia Mutual Life office, then joined State Mutual in 1964, where he was a very successful brokerage manager and assistant general agent. He and a partner started a brokerage agency from scratch in 1970. He bought his partner out and renamed the agency J.L. Thomas & Co., Inc., in 1979.
Many brokerage agencies are family firms, but few if any can claim to have three sons working together for more than 30 years. Michael, David and Craig, who run the agency today, claim that accomplishment as a testament to the fact that their father always treated them equally—evidenced by even the absence of titles on their business cards. The brothers attribute their success to values their father passed down to them— honesty, integrity, experience, work ethic and knowledge—combined with the fact that their father believed in life insurance in his heart. A staunch believer in the independent brokerage distribution system, his entrepreneurial mantra was “Free to Succeed or Fail.” A son-in-law, James Kelly, also contributes at the agency, as does grandson Jerry Thomas, who joined the firm in January.
In addition to the CLU, Thomas’ industry accomplishments include being a member emeritus of the Society of Financial Service Professionals, having been a member for more than 50 years; past president and board member of the Cleveland CLU chapter; 50 year member of NAIFA and its predecessor NALU; charter member of NAILBA; and past president of SUB Centers. The agency is a charter member of the NAILBA Charitable Foundation and a partner in LifeMark Partners.
At Jerry’s direction, J.L. Thomas & Co. contributed to many local charities and community sponsorships; one was the J.L. Thomas baseball team, which was sponsored from little league into the players’ college years.
Described by his sons as truly a great father and husband, Jerry was preceded in death in July 2009 by Larna, his beloved wife of 58 years. He is survived by his daughter Jane Ann Kelly and husband James; Michael and wife Michele; Craig and wife Stella; and David and wife Paula.
An accomplished trumpet player, he passed his love of music on to several of his eight grandchildren. He enjoyed spending winters golfing in Naples, FL, and his summers bass and muskie fishing at the family’s cottage on Crane Lake in Ontario. Bought through tenacious bidding at a Canadian government land auction, it became his favorite place in the world for more than 40 years—in large part because all members of the family have shared the best times of their lives together there.
Thomas proudly served his country in World War II in France and Germany with the 89th Infantry Division of the United States Army, yet never spoke much about it despite receiving seven decorations and citations, including two bronze service stars.
We say goodbye to another of the brokerage industry’s great men and a member of “Our Greatest Generation.” Rest in peace. [SPH]
