SEC Proposes Rule for Variable Annuity and Life Insurance Contracts
SEC proposed to amend the rule and certain related forms for variable annuity and life insurance contracts. The proposal would modernize disclosures by using a layered disclosure approach designed to provide investors with key information on the terms, benefits, and risks of a contract in a concise and more reader-friendly presentation, with access to more detailed information available online and electronically or in paper format on request. The comment period for the proposal will close on February 15, 2019.
The amendments are intended to help investors make informed investment decisions about variable annuity and variable life insurance contracts. The proposed rule would permit a person to satisfy its prospectus delivery obligations under the Securities Act of 1933 for a variable annuity or variable life insurance contract by sending or giving a summary prospectus to investors and making the statutory prospectus available online. The proposed rule would consider a person to have met its prospectus delivery obligations for any portfolio companies associated with a variable annuity or variable life insurance contract if the portfolio company prospectuses are posted online. In addition, SEC proposed amendments to the registration forms for variable annuity and variable life insurance contracts to update and enhance the disclosures to investors in these contracts and to implement the proposed summary prospectus framework.
SEC proposed to require variable contracts to use the Inline eXtensible Business Reporting Language (Inline XBRL) format for the submission of certain required disclosures in the variable contract statutory prospectus. The proposal includes certain technical and conforming amendments to the rules and forms, including amendments to rules related to variable life insurance contracts as well as rescission of certain related rules and forms. Lastly, SEC seeks comments on parallel amendments to the rules governing mutual fund summary prospectuses and registration forms applicable to other types of registered investment companies.
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Comment Due Date: February 15, 2019
Keywords: Americas, US, Securities, Insurance, Variable Annuity, Variable Life Insurance Contracts, Disclosure Requirements, Summary Prospectus, SEC
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