Series 63 practice questionmediumExempt Securities — Insurance Policies
In a state-administrator case study, the scenario starts here. Prioritize the registration trigger and ignore irrelevant noise. An insurance policy or fixed annuity contract issued by an insurance company authorized to do business in the state is:
- ARequired to be registered as a security with the state Administrator
- BExempt from the definition of a security under the USA✓ Correct answer
- CConsidered a federal covered security
- DRegulated exclusively by FINRA
Explanation
Why B — Exempt from the definition of a security under the USA
Under USA Section 401(b), insurance policies and fixed annuity contracts issued by companies authorized to do business in the state are excluded from the definition of a security. Since they are not considered securities under the USA, registration requirements do not apply. However, variable annuities and variable life insurance are considered securities. The governing USA principle is unchanged even though the framing is different.
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