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Are Annuities Regulated At The State Or Federal Level?

Stan The Annuity Man

Question: Who regulates and oversee annuities?  Is it at the state level or at the federal level?  Bart from Santa Barbara, California

Answer: Great question Bart, but as usual with annuities, the answer is a little complex.  Annuities are regulated at the state level, and each state has a guarantee fund that backs up policies to a certain dollar amount.  To find out the specific levels for your state, go to  There’s no uniformity in coverage, and every state has different dollar protection limitations.  With that being said, your primary decision in choosing an annuity should always be the claims paying ability of the carrier, not the state guarantee fund.  It’s important for you to know that state guarantee fund coverage is not FDIC, and should never be compared to that federal program.

Each state has an insurance commissioner that oversees all annuity business within their state.  You can find out more information on your specific state at the National Association of Insurance Commissioners website at Your state insurance commissioner’s office is the place that you can check on the background of a specific agent, file a complaint, check on the legitimacy of a carrier, and educate yourself on all types of annuities.  I encourage you to become familiar with your state insurance web site from an educational standpoint.  They are there to help the consumer, so take advantage of that.

Fixed annuities, fixed indexed annuities (also incorrectly referred to and hyped as “hybrids”), single premium immediate annuities, and longevity annuities (aka: deferred income annuities) are regulated at the state level.  Variable annuities are also overseen at the state level, but draws additional oversight at the federal level because variable annuities are considered a security.

The Financial Industry Regulatory Authority (aka: FINRA) and the Securities Exchange Commission (aka: SEC) are the 2 federal governing bodies that help monitor variable annuity products and sales.  You can learn more by going to the FINRA site (click here) and to the SEC site (click here).

A few years ago, there was a huge legal fight over the question of whether an indexed annuity should be considered a security.  After a lot of time, effort, emotion, and legal expense, it was determined that indexed annuities did not qualify to be classified as a security and only should be considered a fixed annuity.  The bottom line is that indexed annuities are regulated only at the state level……for now.

In my opinion, the states are doing a poor job in regulating and enforcing how agents advertise and promote annuities.  If you Google the word “annuity”, you will find out what I am talking about.  Agents can say anything, and seem to get away with this ongoing huckster selling strategy.

It’s the wild wild west out there, so be careful and do your homework before signing that annuity application.

The “Ask Stan The Annuity Man” educational series is provided by a nationally recognized annuity critic and annuity consumer advocate.  Stan The Annuity Man has over 25 years of experience in the financial services industry, and is the author of the highly acclaimed book, The Annuity Stanifesto.

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About the Author:

Stan The Annuity Man is a nationally recognized annuity expert and annuity critic, and has been called the national consumer advocate for annuities… and a walking middle finger of annuity truth.  He is a weekly RetireMentor columnist for The Wall Street Journal’s, and is the exclusive annuity contributor for  His highly acclaimed book, The Annuity Stanifesto, is a top seller in its category, and is known as the go to resource for all things annuity.

Stan The Annuity Man has clients nationwide, and is considered one of the top independent annuity agents in the country.  You can learn more at


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  • John Olsen says:

    One of the anomalies in the regulatory climate is that although index annuities are NOT securities (because the SEC withdrew Rule 151A which asserted that they are, and because Sect 989J of the Dodd-Frank Act states – albeit indirectly – that they are not), some STATE Departments of SECURITIES assert jurisdiction over these contracts. The usual rationale is that if the selling agent has acted as an "investment advisor" in selling the index annuity, that sale is within the jurisdiction of the Dept. of Securities. Generally, such jurisdiction is asserted when (a) the agent lacks either a Registration as an Investment Advisor or as a Registered Representative and (b) the "source of funds" for the annuity is a securities account.

    Some "authorities" claim that to be safe, the agent should acquire a Series 65 registration and register as an Investment Advisor or Advisory Representative. I think that makes sense if, and only if, the agent has both the desire and the capabilities of acting as such.

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