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This Article highlights a harmful and far-reaching unintended consequence of two major pieces of securities litigation reform legislation1 that were passed as part of the Republican party's Contract with America in the mid-1990s. These reforms were justified, in part, on the grounds that they would benefit investors by improving disclosure of financial information by corporations. However, for many aggrieved investors, the effect of the legislation was just the opposite. Because of inadequate and misleading disclosures made by life insurance companies and their registered representatives, consumers were induced to purchase inappropriate investments carrying excessive fees that reduced the value of their retirement nest eggs. Had the purveyors of these variable annuities adequately disclosed the nature of the product and fully explained the complicated factors that go into a decision to purchase a variable annuity, most consumers would not have purchased variable annuities with tax-deferred moneys from their Individual Retirement Accounts ("IRAs") and 401(k)s. ...

Part I of this Article explains the text and legislative history of the Reform Act of 1995 and the Uniform Standards Act of 1998. Specifically, Part I highlights the lack of attention with which the crucial definition of "covered security" in the 1998 law was drafted.4 Part II explains the investment instrument known as the variable annuity and its fundamental inappropriateness as an investment for many purchasers, namely those buying a variable annuity to place into a tax-qualified plan such as an IRA or 401(k). Part III describes changes in the ways Americans and their employers provide for retirement security. Part III also demonstrates that because of those changes, purchasers of annuities have suffered important financial harms that should not go unremedied. Part IV explains how this problem was addressed on multiple fronts by various institutions. Part IV further shows how the Reform Act and the Uniform Standards Act operated to decapitate a judicial process that seemed to be leading toward a resolution of the problem. Part V reveals the upshot of the legislative preemption of the annuities cases and provides some statistics indicating that any disciplinary effect that would have been accomplished by the responses outlined in Part IV has been totally undercut by the inability of plaintiffs to gain meaningful access to the courts.