Staying power: life insurers value fairness and institutional memory in government, traits that Susan Nash provides. (Regulation: The Big Picture).

When the life insurance industry goes to the Securities and Exchange Commission with a new or revised variable product, Susan Nash plays an important role in regulating how those products are sold, and the industry appears to greatly value her work.

Nash is an assistant director of the SEC's Division of Investment Management. She works closely with Paul F. Roye, the division's director, and Assistant Director Bill Kotapish. "I'm there to consult and work with both Bill and Paul on the policy issues and rule makings," she said. "I handle these matters independently or bring them to the attention of Paul, if needed."

Nash counts among her top accomplishments the creation of a registration form for variable-life products. Nash said the form, which replaced forms not tailored to variable life, 'streamlined the information insurers must submit, "shone light" on cost disclosures and made prospectuses more user friendly. Another major accomplishment was a brochure for consumers on variable annuities, available both in print and at the SEC's Web site, www.sec.gov. SEC Press Officer Herb Perone said the brochure, designed to help the public understand the complicated products, has been very popular.

And simply keeping up with the workload, or "keeping the trains running on time," as Nash said, is a constant challenge at the SEC. Nash said it's something of which she is proud.

Nash arrived at the SEC in July 1989. She earned a bachelor's degree from the University of Notre Dame, a master's degree from the University of Chicago and a law degree from Harvard University Her previous insurance experience was in an actuarial training program for about a year with Equitable Life Assurance Society of the United States. She also worked with law firms. Her first position at the SEC was in the general counsel's office, and she later held several positions in the Division of Investment Management.

Ever-Changing Issues

A big reason Nash has stayed with the SEC for so long is that she finds it constantly challenging. "The insurance industry is extremely creative, and the issues that come up are ever-changing," she said. "We're challenged to respond in a way that serves investors and allows the industry to exist and prosper without unnecessary regulatory rules."

Nash's job isn't generally in the public eye, but she speaks publicly to lawyers' groups and the National Association for Variable' Annuities. She said her role is to 'protect investors' interests, and she isn't concerned about personal fame.

She values her ability to analyze. "You learn you have to look at every issue critically," she said. "You have to. confront each issue' with an open mind, listen to all the parties and consider all the policy arguments."

Some members of the insurance industry said they highly value Nash's industry experience and her long 'tenure' as a regulator of insurance products and marketing.

"She is respected throughout the variable products industry," said Carl Wilkerson, chief counsel for securities and litigation at the American Council of Life Insurers. "She handles complex rule making with an open mind and methodical attention to details. She considers all sides in crafting administrative decisions."

Wilkerson credited her with many precedent-setting regulatory actions, including:

* Development of the variable-life registration form, which enabled plain-English variable life insurance prospectuses. Before the new form, insurers had to provide prospects and owners with phone-book sized prospectuses filled with legal language. The new, user-friendly documents are often less than 30 pages and present information essential to the customer. The SEC estimated the new forms and slimmer prospectuses have saved the insurance industry $64 million a year, Wilkerson said.

* A new interpretation of Section 11 of the Investment Company Act allowing a "retail exception" to a company when a competitor tries to replace a policy with one of its own. The exception allows the company to make a counter offer when the competitor tries to lure the business with a bonus. "Ms. Nash was instrumental in defining how the original company could make internal exchange offers on a basis equivalent to external exchange offers," said Wilkerson. "She kept the interest of contract owners paramount by requiring special disclosure and undertakings but also applied the securities laws flexibly enough to accommodate the innovations in the marketplace." That was a "tall challenge," he added, in that the securities laws first were written more than 60 years ago, when variable insurance products didn't exist.

* Emergency exemptive relief from daily pricing and redemption of securities in anticipation of possible widespread computer malfunctions at the beginning of 2000. Those problems never developed in 2000, but some financial-services companies in New York were affected severely by the events of Sept. 11,2001. "Because the SEC had invested the time and came up with sensible solutions that were ready to go instantly, it was able to pull them off the shelf and issue immediate emergency exemptive relief concerning pricing and redemption when the securities markets shut down due to the terrorist attacks," Wilkerson said.

Reaching Out to the Industry

Among Nash's most-appreciated traits is her practice of reaching out to the industry, according to its regulatory representatives. "If there's an SEC proposal on anything affecting variable products, she'll give me a call and let me know about the agenda for an upcoming meeting," said Mike DeGeorge, general counsel for the National Association for Variable Annuities. "We appreciate being kept in the loop."

Judith Hasenauer, a principal in the law firm Blazzard, Grodd & Hasenauer PC and chair of NAVA's Regulatory Affairs Committee, said Nash tries to communicate what a problem is, how to solve it and what she can and can't do. "She's approachable, but she's not like a politician, saying only what you want to hear," Hasenauer said. "She's matured as a regulator in understanding the complex industry she regulates."

According to Wilkerson, Roye sets the policy and implements it by delegating authority to people such as Nash. "He gives extreme deference to the wisdom and knowledge of associate directors," Wilkerson said.

Now, however, Nash spends much more time in non-insurance areas, including rule making for mutual funds and two new federal laws, Sarbanes-Oxley (on corporate governance) and the USA PATRIOT Act (on money laundering), said Hasenauer. "Rule making is a great concern to everyone now, and there is a very short time to work up those rules from Scratch," she said. Nash said her recent mutual-fund work has been on the issues of proxy-voting disclosure and more-frequent disclosures of fund holdings.

Making matters worse is that the SEC had no extra resources when it received the assignments. "Congress dictated the timing without considering other projects it is working on," Hasenauer said.

Nash said the SEC does an "effective job" regulating the variable insurance industry, given the commission's well-publicized problems with funding and staffing and its difficulty in recruiting experienced candidates "who can be up to speed when they come aboard."

Accelerating Transactions

In the variable-insurance realm, she would like to provide exemptive relief for certain transactions. For example, when an insurer wants to add or subtract a mutual fund from a variable contract, she would prefer to let it take advantage of a core rule rather than get approval from her office each time. "That would allow transactions to happen more quickly and would allow staff to do more with less," she said.

Wilkerson said the SEC has taken some initial steps to address the resources crunch and that Roye and Nash have brought in some "talented lawyers," including assistant directors Kotapish and Paul Cellupica. He said turnaround time on insurance-product innovation and approval is the toughest challenge facing the SEC staff, because the industry's rapid innovations in products generate an increasing volume of interpretive and disclosure issues.

In addition to the resource issue, Nash said the SEC faces challenges in the way its regulatory structure will need to change because of factors such as the globalization of markets, consolidation of the financial-services industry and what the electronic age will mean. "We're an information agency," she said. "As the needs of the world have changed, the commission will have to spend a lot of time in assessing the model under which the commission was formed and how it might have to change. There will be a lot of adaptations in coming years."

Given human nature, people might neglect to thank Nash and SEC staff members, but Wilkerson said insurers value their expertise and commitment. "You hear so much about the effects of the revolving door and the loss of institutional memory in government, but she's been there for almost 15 years. Susan's tenure and experience are important assets for consumers, the industry and the SEC."