Insurance Agent Forum

[jjjtrio]

Does the SIPC cover a person's FIA account against bankruptcy up to 500k per account or do they only cover variable annuities?

This is what I found on their site.

Among the investments that are ineligible for SIPC protection are commodity futures contracts and currency, as well as investment contracts (such as limited partnerships) and fixed annuity contracts that are not registered with the U.S. Securities and Exchange Commission under the Securities Act of 1933.

They just have to be registered with the SEC and a member of the SPIC?
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I will answer my own question.

SIPC does not cove fixed annuities. They are covered up to a certain amount through State Guaranty Association.

Here is a link I found

Guaranty Associations

[Norwayguy]

Originally Posted by jjjtrio

Does the SIPC cover a person's FIA account against bankruptcy up to 500k per account or do they only cover variable annuities?

This is what I found on their site.

Among the investments that are ineligible for SIPC protection are commodity futures contracts and currency, as well as investment contracts (such as limited partnerships) and fixed annuity contracts that are not registered with the U.S. Securities and Exchange Commission under the Securities Act of 1933.

They just have to be registered with the SEC and a member of the SPIC?
- - - - - - - - - - - - - - - - - -
I will answer my own question.

SIPC does not cove fixed annuities. They are covered up to a certain amount through State Guaranty Association.

Here is a link I found

Guaranty Associations

You have a point that SIPC does not cover fixed annuities...however if you listen to FINRA and my B/D they consider FIA to be securities I'm not sure if it would be covered by SIPC and if covered I do not think it would be covered at 500K but at 100K which is the limit for cash....Finally who cares because it is covered by the states guarantee association your not going to be able to claim loss under 2 seperate entities to be made more than whole

[Freddie]

Originally Posted by Norwayguy

You have a point that SIPC does not cover fixed annuities...however if you listen to FINRA and my B/D they consider FIA to be securities I'm not sure if it would be covered by SIPC and if covered I do not think it would be covered at 500K but at 100K which is the limit for cash....Finally who cares because it is covered by the states guarantee association your not going to be able to claim loss under 2 seperate entities to be made more than whole

The series 65/66 clearly state that FIA are NOT securities.

The SEC wants to turn EIA's into securities because the BDs and everyone else wants their vig.

AFAIK - EIAs and FIA are not covered under SIPC.

What is absurd is some Madoff "investors" are getting SIPC coverage even though they may not have put money into Bernie's BD. These people are screaming for their "bailout."

Some of them ae quiet because their foundations and other dealins with Bernie may have been illegal. Many of them thought Bernie did the "big numbers" and (fake) high returns because Bernie was front running.

[Norwayguy]

Originally Posted by Freddie

The series 65/66 clearly state that FIA are NOT securities.

The SEC wants to turn EIA's into securities because the BDs and everyone else wants their vig.

AFAIK - EIAs and FIA are not covered under SIPC.

Oh I agree that FIA are not securities but I wish we could convince FINRA and my B/D of that not only would it save me 35% of my commission but it would remove the limitations of only using products approved by my B/D and the paperwork issue....

[InsureGuy5]

In most states it is the guaranty fund that would cover the fixed annuity contract. The limits are usually $100,000 per contract, per person, per company - with a household maximum of $300,000 from the fund itself.

[Freddie]

Originally Posted by Norwayguy

Oh I agree that FIA are not securities but I wish we could convince FINRA and my B/D of that not only would it save me 35% of my commission but it would remove the limitations of only using products approved by my B/D and the paperwork issue....

Well Bernie Madoff was the vice chairman of NASD (FINRA). Maybe he has a pension with them and he needs the dough for cigarettes and candy in Rikers.

Are you an independent? I know a few BDs who do not take a haircut. I am not trying to sell you anything but PM me and I will give you a few names.

[insuranceexec]

Originally Posted by Norwayguy

Oh I agree that FIA are not securities but I wish we could convince FINRA and my B/D of that not only would it save me 35% of my commission but it would remove the limitations of only using products approved by my B/D and the paperwork issue....

Is your B/D providing you an office for that 65% GDC?

[Norwayguy]

Originally Posted by insuranceexec

Is your B/D providing you an office for that 65% GDC?

No, the the 65% gives my manager her cut on the business..I know its not the best but it isn't worth losing my client base to switch at this point..Also I'm looking to dump the securities license.