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COI Litigation Update

COI Litigation Update

June 25, 2018

Life insurers that defend challenges to their exercises of discretion to adjust cost of insurance (COI) rates on universal life insurance policies continue to seek opportunities to narrow the scope of the claims through early dispositive motions.

Expect Slower SEC Processing of Investment Company Filings

Expect Slower SEC Processing of Investment Company Filings

June 25, 2018

The SEC has reported to Congress that it expects the Division of Investment Management (IM) to provide comments at a slower pace during the 2018 and 2019 fiscal years.

FINRA Moves Toward SEC Anti-Churning Proposal

FINRA Moves Toward SEC Anti-Churning Proposal

June 25, 2018

On April 18, the SEC voted to propose major rule changes to reconcile and clarify the standards of conduct that apply to broker-dealers and investment advisers.

FINRA Proposes to Ease Regulation of Outside Business Activities

FINRA Proposes to Ease Regulation of Outside Business Activities

June 25, 2018

FINRA has proposed a major paradigm shift for regulating outside business activities (OBAs) and private securities transactions (PSTs) of broker-dealer personnel.

New York Pushes Mutual Fund Active Share Disclosure

New York Pushes Mutual Fund Active Share Disclosure

June 25, 2018

New York’s Attorney General issued a report on its recent investigation of fees charged by actively managed equity mutual funds and a metric known as "Active Share."

Ninth Circuit: Face Amount Controls Amount-in-Controversy Questions Where Policy’s Validity is Disputed

Ninth Circuit: Face Amount Controls Amount-in-Controversy Questions Where Policy’s Validity is Disputed

June 25, 2018

In March, the Ninth Circuit provided clarity on a key and recurring issue relevant to a district court’s ability to exercise subject matter jurisdiction in actions involving the validity of life insurance policies.

Recalls of Loaned Securities by Insurance Dedicated Funds

Recalls of Loaned Securities by Insurance Dedicated Funds

June 25, 2018

In March, the SEC sanctioned the investment advisers of two funds supporting variable insurance contracts for inadequate disclosure about the funds’ recalls of loaned portfolio securities in advance of the securities’ dividend record dates.

SEC Warns About Third-Party Destruction of Broker-Dealer Records

SEC Warns About Third-Party Destruction of Broker-Dealer Records

June 25, 2018

The SEC staff issued an April 12 letter addressing broker-dealer contracts with third-party recordkeeping service providers under which the service provider can delete or discard records of a broker-dealer who fails to pay fees due under the recordkeeping agreement, among other scenarios.

South Carolina First State to Adopt NAIC Insurance Data Security Model Law

South Carolina First State to Adopt NAIC Insurance Data Security Model Law

June 25, 2018

On May 3, Governor Henry McMaster signed the South Carolina Insurance Data Security Act, making South Carolina the first state to adopt the NAIC Insurance Data Security Model Law.

Supreme Court Set to Rule on Constitutionality of SEC’s ALJs

Supreme Court Set to Rule on Constitutionality of SEC’s ALJs

June 25, 2018

In April, the U.S. Supreme Court heard oral argument in Lucia v. SEC to resolve the federal circuit court split on whether the SEC’s administrative law judges (ALJs) are "inferior officers" of the United States who must be appointed in accordance with the Appointments Clause of the U.S. Constitution, and not mere employees whose hiring is not required to meet constitutional standards.

To Preempt or Not to Preempt - Courts Issue Competing SLUSA Rulings

To Preempt or Not to Preempt - Courts Issue Competing SLUSA Rulings

June 25, 2018

During two weeks in April, two different courts — the Second Circuit and the New Jersey Superior Court — considered nearly identical allegations regarding variable products and reached diametrically opposed conclusions about the extent to which the claims were barred by the Securities Litigation Uniform Standard Act (SLUSA).

Unclaimed Life Insurance Benefits: The First Half of 2018 in Review

Unclaimed Life Insurance Benefits: The First Half of 2018 in Review

June 25, 2018

The pace of developments in the unclaimed life insurance benefits space remained active in the first six months of 2018, with new judicial decisions and state legislative enactments making an impact.

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