U.S. Reps. Zach Nunn (R-IA) and Brittany Pettersen (D-CO) have introduced legislation that would increase transparency on life insurance and annuity forms.
The legislation, the Consumer-Led Enhancement of Annuity and Insurance Registration Forms (CLEAR Forms) Act, is a bipartisan bill that would require the Securities and Exchange Commission (SEC) to create clear, tailored registration forms for certain life insurance and annuity products. The lawmakers said that while the SEC already maintains registration forms for variable annuities and variable life insurance, no equivalent form exists for Registered Index-Linked Life Insurance, Contingent Deferred Annuities, or other registered non-variable insurance contracts. As a result, issuers need to register those products on the same general purpose forms used for corporate stocks and debt offerings.
“Planning for retirement is hard enough without forcing Iowans to dig through hundreds of pages of Washington paperwork,” Nunn said. “Federal disclosures should help Iowa families understand what they’re buying, not bury the answers they need. Our bipartisan CLEAR Forms Act cuts the red tape, puts clear information front and center, and helps Iowans make the best decisions for their families and financial futures.”
The legislation, if passed, would require the SEC to propose tailored forms within 12 months and finalize them within 30 months. The forms would be required to focus on consumer information and allow them to make knowledgeable decisions, as well as to reduce duplicative disclosure, and include investor testing for Contingent Deferred Annuities.
“Too often American workers and families are being locked out of retirement savings and wealth-building opportunities because of a complex insurance policy structure. As families across the nation face a cost-of-living crisis, it is more important than ever we invest in policies that help make the American dream a reality,” Pettersen said. “The bipartisan Consumer-Led Enhancement of Annuity and Insurance Registration (CLEAR) Forms Act will help simplify life insurance, so more families are equipped to make informed decisions for themselves and their loved ones.”