With the introduction of variable annuities in the late 1950s, the life insurance industry commenced an ongoing journey into the world of investment oriented products. By the early 1990s, life insurers had become significant players in the sale of variable annuities, variable life insurance, interest-sensitive products, mutual funds and the like. In part this phenomenon has been market driven as consumers have become more familiar with and interested in investment oriented products. Also, competition from other financial institutions for the consumer dollar further spurred the growing presence of equity products in the life insurance industry. In doing so, however, the world of life insurance came into confrontation with the world of securities regulation, ultimately resulting in a highly complex system of dual securities and insurance regulation at both the federal and state levels.

By 1940, long before the life insurance industry contemplated entering the realm of securities products, Congress enacted a comprehensive statutory framework governing the securities industry and securities markets. Although such laws expressly or implicitly excluded life insurance and annuity products offered by insurance companies, over time the Securities and Exchange Commission (SEC) has come to directly or indirectly possess pervasive regulatory authority over the life insurance industry. To better understand this substantial overlay of federal regulation, at the outset, an overview of the federal securities laws most relevant in the insurance context should be helpful.