ALI-ABA Topical Courses Life Insurance Company Products: Key State and Federal Regulatory Developments Update April 25, 2012 Telephone Seminar/Audio Webcast PROGRAM FACULTY PARTICIPANTS FACULTY BIOGRAPHIES STUDY MATERIALS TABLE OF CONTENTS 1. Motion to NAIC Life Insurance Annuities Committee to Accept Report of Contingent Deferred Annuity Subgroup and Accept Subgroup s Determination that CDAs Are Life Insurance Products (Motion made by Thomas B. Leonardi, Connectucut Insurance Commissioner) 2. Report from Contingent Deferred Annuity (CDA) Subgroup to NAIC Life Insurance and Annuities (A) Committee - February 22, 2012 By Felix Schirripa, Chair, NAIC CDA Working Group 3. CDA Subgroup Report to A Committee - March 4, 2012 By Felix Schirripa, Chair, NAIC CDA Working Group 4. Discussion Guide for CDA Subgroup Call - February 16, 2012 Prepared by Felix Schirripa, Chair, NAIC CDA Working Group 5. Industry Presentation on Contingent Deferred Annuities - February 16, 2012 By Sara Richman, Bryan Pinsky, and Tim Bennett 6. Letter of January 19, 2012, from Insured Retirement Institute to NAIC Contingent Annuities Working Group regarding Consumer Need for Contingent Annuities and Proper Classification of Contingent Annuities as Annuities under State Law By J. Lee Covington, II Page ix xi xiii 1 5 11 27 35 55 vii
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PROGRAM SCHEDULE April 25, 2012 Program Schedule Eastern Central Mountain Pacific & Arizona Alaska Hawaii National Teleseminar/Webcast 12:00 pm 11:00 am 10:00 am 9:00 am 8:00 am 6:00 am Adjournment 1:00 pm 12:00 pm 11:00 am 10:00 am 9:00 am 7:00 am In just 60 minutes, our panel of experts briefs you on all the important recent federal and state regulatory developments affecting life insurance company products. Corresponding course materials may be downloaded or viewed online, but might not be followed precisely by the faculty during the presentation. You can email your questions to the faculty throughout the program. What You Will Learn Co-chaired by Richard T. Choi of Jorden Burt LLP and Stephen E. Roth of Sutherland Asbill & Brennan LLP, this audio-only program examines: The recent decision by the National Association of Insurance Commissioners on the treatment of Contingent Deferred Annuities Recent developments on legally insulated separate accounts used to support insurance products Recent and pending Financial Industry Regulatory Authority (FINRA) and Securities Exchange Commission (SEC) proposals and initiatives affecting issuers and distributors of variable annuities Program Schedule (All times eastern daylight) 12:00 p.m. Life Insurance Company Products: Key State and Federal Regulatory Developments Update Messrs. Choi and Roth The NAIC Decision on the treatment of Contingent Deferred Annuities Recent Developments on Legally Insulated Separate Accounts Used To Support Insurance Products Recent And Pending FINRA And SEC Proposals and Initiatives Affecting Issuers and Distributors of Variable Annuities 1:00 p.m. Adjournment Total 60-minute hours of instruction: 1.0; total 50-minute hours: 1.2 ix
Suggested Prerequisite: Limited experience in legal practice in subject matter or completion of Basic CLE Course in subject matter Educational Objective: Acquisition of knowledge and skills to develop proficiency as a practitioner; maintenance of professional competence as a practitioner; provision of information on recent legal developments. Level of Instruction: Advanced Nothing in this program, the program materials, or communications stemming from the program (including questions and answers) should be considered as the rendering of legal advice. Non-lawyers should seek the advice of a licensed attorney in all legal matters. Registrants/readers should assure themselves that these presentations/materials/communications are still current and applicable at the time they are delivered or read. Neither ALI-ABA nor the speakers/authors can warrant that these presentations/ materials/communications will continue to be accurate, nor do they warrant them to be completely free of errors when delivered/published. Registrants/readers should verify statements before relying on them. These presentations/materials/communications reflect the viewpoints of their speakers/authors and do not necessarily express the opinions of ALI-ABA Continuing Professional Education or its sponsors. The members of this program's faculty are contributing their services to further the continuing legal education of their fellow members of the Bar. x
ALI-ABA Topical Courses Life Insurance Company Products: Key State and Federal Regulatory Developments Update April 25, 2012 Telephone Seminar/ Audio Webcast PLANNING CHAIRS Stephen E. Roth, Esquire Sutherland Asbill & Brennan LLP 1275 Pennsylvania Avenue, NW Washington, DC 20004 Richard T. Choi, Esquire Jorden Burt LLP Suite 400 East 1025 Thomas Jefferson Street, NW Washington, DC 20007 FACULTY Beverly A. Byrne, Esquire Chief Legal Officer Great-West Life & Annuity Insurance Company Suite 2T3 8525 East Orchard Road Englewood, CO 80111 J. Lee Covington, II, Esquire Senior Vice President and General Counsel Insured Retirement Institute 1645 1 st Place McLean, VA 22101 Clifford E. Kirsch, Esquire Sutherland Asbill & Brennan LLP Grace Building, 40 th Floor 1114 Avenue of the Americas New York, NY 10036 James R. Mumford, Esquire First Deputy Commissioner, Division of Insurance, Department of Commerce State of Iowa 330 Maple Street Des Moines, IA 50319 Ms. Patricia A. Roy Chief Compliance Officer AXA Advisors, LLC 1290 Avenue of the Americas F1 CONC1 New York, NY 10104-0105 xi
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FACULTY BIOGRAPHIES PLANNING CHAIRS Richard T. Choi Richard T. Choi is a Partner in the Washington, DC office of Jorden Burt LLP. Mr. Choi has extensive experience advising investment companies, investment advisers, brokerdealers, and life insurance companies on federal and state securities and insurance compliance and regulatory matters. Mr. Choi's experience includes advising investment company boards, independent directors and trustees, and special committees of directors and trustees. He counsels clients on the development and distribution of sophisticated financial products, such as variable annuities, variable life insurance, and face-amount certificates. His experience also includes representation of investment advisers and investment companies in regulatory compliance inspections and examinations, opinions on the availability of 1940 Act exemptions in connection with various types of transactions, and in-house training and education seminars on a variety of regulatory and compliance matters. Mr. Choi has published numerous articles and regularly speaks on federal securities issues relating to variable insurance products and mutual funds. Mr. Choi has appeared on Bloomberg TV and has been quoted in Bloomberg, the Chicago Tribune, the Los Angeles Times, National Underwriter, U.S. Banker, the Wall Street Journal Online, and other financial and trade publications. Speeches and Publications All papers (other than contributions to treatises and white papers) were the subject of speeches at the conferences indicated. This list does not include training, educational, and other seminars or presentations that Mr. Choi provided to or on behalf of clients. 2011 Co-Chair, 29th Annual Advanced ALI-ABA Conference on Life Insurance Products: Current SEC, FINRA, Insurance, Tax, and ERISA Regulatory and Compliance Issues, Washington, DC (November 3-4, 2011) Moderator, SEC Initiatives, Insured Retirement Institute (IRI), 2011 Government, Regulatory & Compliance Conference, Washington, DC (June 26-28, 2011) Co-Moderator, Life Insurance Company Products: Key Federal Regulatory Developments Update, ALI-ABA Webinar (February 3, 2011) xiii
2010 Co-Chair, 28th Annual Advanced ALI-ABA Conference on Life Insurance Products: Current SEC, FINRA, Insurance, Tax, and ERISA Regulatory and Compliance Issues, Washington, DC (October 28-29, 2010) Moderator, SEC Regulation & Rulemaking, Insured Retirement Institute (IRI), 2010 Government, Regulatory & Compliance Conference, Washington, DC (April 28-30, 2010) Speaker, Variable Annuity Summary Prospectus, Insured Retirement Institute (IRI), 2010 Government, Regulatory & Compliance Conference, Washington, DC (April 28-30, 2010) Speaker, How Regulation Will Shape Our Future, LIMRA's 61st Distribution Leaders Round Table, Bonita Springs, FL (February 3-5, 2010) 2009 Co-Chair, 27th Annual Advanced ALI-ABA Conference on Life Insurance Products: Current SEC, FINRA, Insurance, Tax, and ERISA Regulatory and Compliance Issues, Washington, DC (November 5-6, 2009) Moderator, SEC Regulation & Rulemaking, National Association for Variable Annuities (NAVA), 2009 Compliance and Regulatory Affairs Conference, Washington, DC (June 8-9, 2009) Bar and Court Admissions District of Columbia Virginia Education J.D., University of Virginia School of Law, 1987 B.A. (with honors), University of Chicago, 1984 Noteworthy Member, Smithsonian Institution Libraries Advisory Board (2011-present) Member, University of Chicago Visiting Committee on the College and Student Activities (2004-2010) Professional Affiliations Member, American Bar Association xiv
Stephen E. Roth Steve Roth is the Practice Group Leader of Sutherland s Financial Services Practice Group, where he focuses his practice on securities and insurance regulatory matters for financial services clients. Steve advises life insurance companies on the development, marketing and distribution of new insurance and annuity products, including registration of variable and fixed life and annuity contracts with the U.S. Securities and Exchange Commission (SEC). He also has extensive experience in the development and regulation of pooled investment vehicles, including mutual funds, other regulated investment companies and hedge funds. In addition, Steve has extensive experience with regulatory and compliance issues for investment advisers and broker-dealers. Representative Experience Steve regularly counsels clients concerning the following issues: Sales practices, market conduct and other compliance issues affecting investment advisers, broker-dealers and other distributors of financial products. Insurance regulatory and licensing matters. Mergers and acquisitions. Reinsurance transactions. Professional Honors and Awards Recognized by Chambers USA: Guide to Leading Business Lawyers in the area of insurance regulation and investment funds (2008-2011) Named to The Best Lawyers in America in the area of mutual funds law (2005-2012) Professional and Community Involvement Chair, Securities Section, Association of Life Insurance Counsel Co-chair, ALI-ABA Conference on Life Insurance Company Products (1999- Present) Recent Publications and Speaking Engagements Co-author, Securities or Not: Uncertainties Remain For Fixed Insurance Products After Dodd-Frank, BNA Securities Regulation & Law Report (October 18, 2010) xv
Co-author, Navigating the SEC Framework for Registered Non-Variable Annuity Products, The Review of Securities & Commodities Regulation (June 2010) Co-author, Changes in Living Benefits and Other Fixed and Variable Insurance Product Evolutions, Insured Retirement Institute (IRI) Annual Meeting (June 2009) Co-author, Reorganizing Insurance Company Separate Accounts Under Federal Securities Laws, 46 The Business Lawyer 537 (1991) Speaker, Fixed Annuity Trends and Issues, Society of Actuaries Life & Annuity Symposium (May 16-17, 2011) Speaker, The Securities Status of Fixed Indexed Annuities and Other Products in the Aftermath of the Harkin Amendment and the Withdrawal of Rule 151A, ALIC Annual Meeting (May 14-17, 2011) Speaker, Guaranteed Retirement Income Products and Bank Collective Trusts, ALI-ABA Collective Trust Funds Current Banking SEC and ERISA Regulatory and Compliance Issues (May 5, 2011) Speaker, Selected Regulatory Developments Affecting Variable Insurance Products and Underlying Funds, PLI s Investment Management Institute (February 10-11, 2011) Speaker, Regulation of Variable Annuity and Variable Life Insurance Products under the Federal Securities Laws, PLI s Securities Products of Insurance Companies in the Face of Regulatory Reform (January 28, 2011) Speaker, Regulation of Variable Annuity and Variable Life Insurance Products Under the Federal Securities Laws, PLI s Securities Products of Insurance Companies in the Face of Regulatory Reform 2010 (January 29, 2010) Speaker, The Federal Regulation of Insurance, Sutherland Regulatory Symposium (June 25, 2009) Speaker, Synthetic Guaranteed Lifetime Withdrawal Benefit Offerings: Legal and Practical Issues, ALIC Annual Meeting (May 2009) Speaker, Synthetic Guaranteed Lifetime Withdrawal Benefit Offerings: Legal and Practical Issues, PLI s Investment Management Institute (April 2009) Speaker, Securities Regulation of Variable Insurance Products, PLI s Understanding the Securities Products of Insurance Companies 2009 (January 5-6, 2009) Speaker, Hot Topics in Insurance Products, PLI s Investment Management Institute (April 24-25, 2008) Speaker, The Securities Status of Life Insurance Company Products, PLI s Understanding the Securities Products of Insurance Companies Conference (January 2008) Speaker, Regulatory and Litigation Developments Related to Revenue Sharing Arrangements, ALIC Annual Meeting (May 7-8, 2007) Speaker, Fitting Variable Life Insurance and Variable Annuities into the Regulatory Framework of the Investment Company Act of 1940, PLI s Understanding the Securities Products of Insurance Companies Conference (January 2007) xvi
Education J.D., Yale Law School, 1976, Editor, Yale Law Journal A.B., summa cum laude, University of Notre Dame, 1973, Phi Beta Kappa Bar Admissions District of Columbia FACULTY Beverly A. Byrne Current Position Chief Compliance Officer and Chief Legal Counsel, Financial Services at Great-West Life & Annuity Insurance Company Past Positions Chief Compliance Officer & Chief Legal Officer, Financial Services at Great- West Retirement Services Education Washburn University School of Law J. Lee Covington, II Current Position Senior Vice President & General Counsel at Insured Retirement Institute Past Positions Partner at Squire, Sanders & Dempsey Director at PricewaterhouseCoopers Director (Gubenatorial Cabinet Member) at Ohio Department of Insurance Deputy Commissioner at Arkansas Insurance Department Policy and Legal Aide, Insurance, Banking, and Commerce at Governor Mike Huckabee xvii
Attorney at Mitchell Williams Law Firm Law Clerk at United State District Judge Jimm Hendren Education University of Arkansas School of Law, Fayetteville University of Arkansas at Fayetteville Wynne High School Clifford E. Kirsch Cliff Kirsch is a member of Sutherland s Financial Services Practice Group, practicing in the areas of securities regulation and compliance with a particular focus on broker-dealer and investment adviser regulatory compliance matters. He regularly advises clients on issues raised in connection with the design and distribution of a broad range of investment products including wrap-fee programs and other advisory products, mutual funds, bank collective investment funds and insurance products. In addition, Cliff focuses on issues related to the design and implementation of corporate compliance programs at financial services firms, advising on privacy and information security, anti-money laundering, assessment of compliance risks and related matters. Before joining Sutherland, Cliff served as Chief Legal Officer of one of the largest dually-registered broker-dealers and investment advisers as well as Assistant Director of the U.S. Securities and Exchange Commission s (SEC) Division of Investment Management. This unique background, coupled with his role in connection with various Financial Industry Regulatory Authority (FINRA) committees and working groups, allows him to provide a unique and practical perspective when advising clients. Cliff is the author and editor of two of the leading treatises in the broker-dealer and adviser arena: Broker-Dealer Regulation and Investment Adviser Regulation (both published by the Practising Law Institute). He appears regularly on industry and legal panels that discuss broker-dealer and adviser matters and serves as chair of ALI-ABA s course on Investment Adviser Regulation and PLI s courses on Broker-Dealer and Investment Adviser Regulation. Professional and Community Involvement Member, New York City Bar Association Faculty, FINRA Compliance Institute at The Wharton School of the University of Pennsylvania Former Chair, FINRA Variable Products Committee xviii
Former Board Member, National Society of Compliance Professionals Recent Publications and Speaking Engagements Co-author, "Supervising Reps' Outside Activities," Compliance Reporter (February 7, 2011) Co-author, FINRA Restricts Internal Use Only Rules Through Enforcement Actions, Market Solutions, Financial Markets Association (October 2010) Co-author, "The Resurgence of Collective Investment Trusts," Law360 (June 15, 2010) Co-author, FINRA s Take On Internal Communications, Securities Law360 (February 18, 2010) Chair, PLI Fundamentals of Investment Adviser Regulation 2010 (July 16, 2010) Chair, PLI Fundamentals of Broker-Dealer Regulation (June 28, 2010) Co-chair, PLI Nuts and Bolts of Financial Products 2010 (February 22 23, 2010) Speaker, Risk: How to Serve the Growing Needs of Clients and Advisors While Managing Organizational Risk, One Voice 2012: FSI Broker-Dealer Conference (January 23-25, 2012) Speaker, CLO/CCO Liability as Supervisors Seminar (June 10, 2011) Speaker, SEC Examinations of Investment Advisers Are You Ready? Seminar (July 13, 2010) Speaker, The Pattern of Regulation, PLI s Fundamentals of Mutual Funds 2010 Seminar (June 9, 2010) Speaker, Advertising Regulation Updates, 2010 Financial Industry Regulatory Authority (FINRA) Annual Conference (May 26 28, 2010) Speaker, Proposed Uniform Standard of Conduct for Broker-Dealers and Advisers Practical Implications for Insurance Company Products, 2010 Association of Life Insurance Counsel (ALIC) Annual Meeting (May 22 25, 2010) Speaker, Social Networking Compliance: What it takes to be Linked In (April 29, 2010) Speaker, Webinar: Real Estate Funds and Alternative Investments: Impact of Recent FINRA Developments (March 25, 2010) Education J.D., Hofstra University School of Law, 1985 B.A., Cornell University, 1981 Bar Admissions District of Columbia, New Jersey, New York xix
James R. Mumford James R. Mumford is First Deputy Commissioner of the Iowa Insurance Division and also is Securities Administrator which is the lead position for the Iowa Securities Bureau. Mr. Mumford graduated from Iowa State University in 1960 with a degree in agriculture economics. He graduated from Harvard University Law School in 1963. Mr. Mumford has worked in the insurance industry since 1965 starting in private practice. In 1970 he became counsel with Equitable Life Insurance Company of Iowa. In 1976 he started a law firm specializing in insurance related matters. He worked extensively in insurance related matters including variable annuity and indexed annuity products, pension and tax matters, and financial and corporate governance matters. In 1997, he joined ING Americas as Chief Counsel, Corporate Affairs and also later undertook the duties of Chief Counsel, Special Projects. During that time he was general counsel of several ING insurance subsidiaries and furnished oversight on ING state government relations activities. In 2003, he retired from ING and became Of Counsel with Nyemaster, Goode, West, Hansell & O'Brien Law Firm in Des Moines, Iowa. In 2005 he was appointed to his current position. Mr. Mumford was active in the National Organization of Life and Health Guaranty Association (NOLHGA) where he was a member of its legal committee for 5 years (chair 2 years), member of its audit committee for 3 years (chair 1 year), member of its executive committee for 3 years (chair 1 year), member of its Board of Directors for 6 years (chair 1 year), member of its financial modernization committee for 3 years and cochaired its Guaranty Association Modernization Task Force for 2 years. During his career, Mr. Mumford was active with the National Association of Insurance Commissioners (NAIC) on behalf of his clients. He was also active representing member companies of the American Council of Life Insurers (ACLI). Mr. Mumford represents the Iowa Insurance Division by serving on various NAIC Working Groups and Task Forces including currently chairing the NAIC Receivership and Insolvency Task Force and a working group reviewing the NAIC Annuity Disclosure Model Regulation. xx
Patricia A. Roy Pat Roy is Vice President and Associate General Counsel of AXA Equitable and Chief Compliance Officer for its retail broker dealer, AXA Advisors. Pat has over twenty years of experience in the securities industry. Prior to joining AXA, Pat held several legal and compliance positions at Prudential Securities and Wachovia Securities. She received her Juris Doctorate from Boston University School of Law and her undergraduate degree from the University of Vermont. xxi
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