Annuities are not securities: the regulatory Island in Illinois
Journal of Investment Compliance
ISSN: 1528-5812
Article publication date: 2 December 2019
Issue publication date: 3 December 2019
Abstract
Purpose
Discusses the significance of the Illinois Supreme Court ruling in Van Dyke v. White, which clarified that annuities are not securities in the state of Illinois, with a particular focus on the ramifications to insurance, brokerage and investment advisory standards of care as well as causes of action for breaches thereof.
Design/methodology/approach
Describes the Court’s ruling as it relates to the industry going forward. Does not discuss the specifics of the plaintiff’s case or history.
Findings
The statutory language of Illinois’ securities laws specifically excludes annuities from the definition of securities. For this reason, the Illinois Department of Insurance has sole authority over regulating annuities, giving the Illinois Department of Securities no authority, except to the extent there is an investment advisor breach pursuant to §12(J) of the Illinois Securities Law of 1953. The industry has yet to react or adjust to the Court’s ruling, so there may be a future wave of reactions.
Originality/value
Assists the reader in understanding the unique regulatory environment of annuities in Illinois, the relevant standards of care related to annuity advice and transactions, and remedies for grievances after the Illinois Supreme Court ruling in Van Dyke v. White.
Keywords
Citation
Schaff, M.L. and Schaff, J.E. (2019), "Annuities are not securities: the regulatory Island in Illinois", Journal of Investment Compliance, Vol. 20 No. 4, pp. 72-74. https://doi.org/10.1108/JOIC-10-2019-0055
Publisher
:Emerald Publishing Limited
Copyright © 2019, Michele L. Schaff and Jeffery E. Schaff.