The American Council of Life Insurers (ACLI) supports a new proposal from the Securities and Exchange Commission (SEC) to increase transparency for consumers considering variable life insurance and variable annuities.
The proposed rule change is designed to improve disclosure for investors and help them better understand the features, fees, and risks so they can make an informed investment decision. Specifically, it would allow for these products to have a summary prospectus, which is a concise, reader‑friendly summary of key facts about the contract. More‑detailed information would be available online or could be delivered in paper format if investors so choose. Mutual funds have used a similar approach since 2009.
SEC Chairman Jay Clayton said he has interacted with many retail investors over the last several months and most have emphasized their preference for clear and concise disclosure. ACLI agrees.
“Life insurers’ efforts to help consumers make informed purchasing decisions complements the industry’s continuing commitment to act in the best interest of consumers and dovetails with another SEC initiative, the proposed Regulation Best Interest, which is slated to be issued next year,” ACLI President and CEO Susan Neely said. “We salute the SEC for taking these pro-consumer steps. ACLI has actively engaged with the SEC over many years on projects to enhance the transparency of life insurance industry products.”