H.R. 10234: Consumer-Led Enhancement of Annuity and Insurance Registration Forms Act

This bill would direct the Securities and Exchange Commission (SEC) to create new registration forms for certain insurance products that are treated as securities. The main products covered are:

• Contingent deferred annuities

• Registered index-linked life insurance

• Other similar registered non-variable insurance contracts

What the bill changes

The bill would require the SEC to write rules and create one or more forms that insurance companies could use to register these products with the agency. The forms would be designed to help buyers get the information they need to make informed decisions, while taking into account that these products can be complex.

SEC deadlines

The SEC would have to:

• Propose the new rules within 12 months after the bill becomes law

• Finalize the rules within 30 months after the bill becomes law

How the forms would be designed

In creating the forms, the SEC would have to:

• Focus on giving purchasers the information needed to make informed choices

• Consider the availability of information, the sophistication of the buyers, the length of the disclosure, and the complexity of the products

• Test the forms with consumers for contingent deferred annuities

• Use the results of that testing to make the disclosures easier to understand

Limits on the SEC

The bill says the SEC must keep certain disclosure and financial statement requirements for insurance companies aligned with existing SEC rules for similar products. It also says the SEC may not do anything in these rules that would block an existing exemption under SEC Rule 12h-7 for issuers that qualify for it.

Consistency with existing registration systems

The SEC would be directed, as much as possible, to make the new framework consistent with existing registration forms and related rules so that insurance companies can offer their registered products in a more uniform way. The bill specifically mentions rules that allow summary prospectuses, annual registration fee calculations, and certain amendments to become effective automatically or quickly.

State law

The bill says it does not override state or territorial insurance laws, regulations, rules, or orders.

If the SEC misses the deadline

If the SEC has not finalized the required rules within 30 months, then registered index-linked life insurance and contingent deferred annuities could be registered using existing SEC forms for similar products until the new rules are completed. That fallback would end once the SEC finalizes the new rules.

Relevant Companies

• PRU - Prudential Financial, Inc. could be affected because it sells annuities and retirement-related insurance products that may fall within the bill’s covered categories.

• ALL - The Allstate Corporation could be affected if its life insurance or annuity businesses offer products that are registered under these SEC rules.

• MET - MetLife, Inc. could be affected through its annuity and life insurance product lines if they are subject to the new registration forms.

• LNC - Lincoln National Corporation could be affected because it offers annuities and life insurance products that may be included under the bill.

• AFL - Aflac Incorporated could be affected if any registered life insurance or related insurance products it issues are covered by the new SEC forms.