SEC adopted a tailored registration form for offerings of registered index-linked (RILA) and registered market-value adjustment (MVA) annuities proposed in 2023, #186682.
Will provide investors with tailored disclosures about complex products and modernize and enhance registration, filing, and disclosure framework for non-variable annuities.
Provided fact sheet on registration for RILA, MVA, Form N4 and public comment file.
SEC released Chair Gensler, Commissioners Peirce and Uyeda statements on proposal.
Background
Market for complex products has grown significantly in recent years; sales of RILAs reached approximately $47.4bn in 2023 alone, more than quintupling since 2017.
Final amendments build on SEC’s existing registration, filing, and disclosure framework for variable annuities to provide a tailored approach for non-variable annuities.
Designed to provide investors with a better understanding of these products.
Will provide efficiencies for insurance company issuers that offer both variable and non-variable annuities as well as for the Commission in reviewing those filings.
Registration Form
Required offerings of RILAs and registered MVA annuities to be registered on Form N-4
Provided investors with tailored disclosures and key information about these products.
Non-variable annuity issuers must follow same rules to update registration statements
Also, these issuers are permitted to use summary prospectus framework on Form N-4.
Amendments require that insurance companies tag certain information in the form using the Inline eXtensible Business Reporting Language (Inline XBRL) format.
Non-variable annuity issuers must pay registration fees in arrears on Form 24F-2.
Required non-variable annuity issuers comply with Rule 156 (17 CFR 230.156), which provides guidance as to when sales literature is materially misleading under law.
Non-variable annuities will be permitted to use summary prospectus framework that highlights key data for investors while making additional information available.
Implement requirements related to RILAs contained in the Consolidated appropriations act (CAA) (PL 117-328) and incorporate the results of investor testing conducted.
Effectiveness
Amendments will become effective 60 days after publication in the federal register.
Filers will have until May 1, 2026, to comply with final amendments to Form N-4 and related rule amendments; for amendments to Rule 156, compliance on effective date.
Jul. 24, 2024 SEC Fed Reg Final Rule
On Jul. 24, 2024, SEC published final rule in federal register, effective Sep. 23, 2024.
