SEC Asked For More Time On Variable Product Rules

The extension was sought by the American Council of Life Insurers, Washington, and the Securities Industry Association, New York.

The ACLI says its concern stems from the impact it may have on life insurance agents who are registered representatives of a broker-dealer. "Because broker-dealers affiliated with life insurers are significantly different from full-service broker-dealers, compliance [with certain provisions] of the new rule will present different compliance and timing challenges…," the ACLI request, signed by Carl Wilkerson, vice president and chief counsel, securities and litigation, said.

It says that because broker-dealers affiliated with life insurers often conduct supervision and compliance through an insurance distribution system, business is often conducted in small, geographically-disperse offices in non-branch locations. "The rule's compliance date, therefore, is more logistically complex for insurance affiliated broker-dealers than for full-service firms," the ACLI says.

Another reason for the delay is that the provision requiring brokers who offer financial planning services to treat these accounts as advisory accounts emerged later in the rulemaking process, the ACLI argues.

But the consumer groups oppose the extension. They say the general direction the SEC was likely to take in the rulemaking process "has been clear since the rule was re-proposed last December." They add: "While we agree that brokers and insurance agents will be required to undertake a significant effort to come into compliance with the rule in the allotted time, we believe the substantial added protections investors will receive and the long delay in providing those protections justify the effort."