Clear, Concise Disclosures For Variable Contracts In Sight
On Oct. 30, 2018, the U.S. Securities and Exchange Commission proposed rule changes designed to improve disclosure for investors about variable annuities and variable life insurance contracts (collectively, variable contracts). Following a disclosure framework that has long been in place for retail funds, the present proposal would permit a variable contract to use a summary prospectus, in accordance with proposed Rule 498A under the Securities Act of 1933.
The SEC proposal is designed to provide investors with more user-friendly, layered disclosures — efforts that investors likely will welcome. Improving the retail investor experience is a key priority for the SEC’s Division of Investment Management. The public comment period for the rule changes will remain open through Feb. 15, 2019.