State RegulationsNY specificDifficulty 2/5
A variable annuity contract marketed in New York is registered with the federal securities regulator. Which statement is correct?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Registration with the federal securities regulator does not displace New York law: variable annuities sold in New York remain subject to the Superintendent of Financial Services under Reg 77 (11 NYCRR Part 54.3), Reg 47, and the Insurance Law, including N.Y. Ins. Law §4240, in addition to federal securities requirements. Dual regulation is the rule for variable products.
Why the other options are wrong
- B) There is no preemption; the Superintendent's authority over insurance transactions in New York continues alongside federal securities oversight.
- C) New York regulates the insurance side of the agent's conduct, including under Reg 77, regardless of the federal registration.
- D) Being a security does not exempt the contract from New York insurance requirements administered by the Department of Financial Services.
Memory hook
An SEC card does not trump the Superintendent's badge.