NU Online News Service, Feb. 9, 2004, 3:43 p.m. EST, Washington – Life insurers are challenging a U.S. Securities and Exchange Commission variable product disclosure proposal.[@@]
The SEC proposal would require variable product separate accounts to publicly disclose details of tools used to prevent market timing abuses.
In a letter to the SEC, Carl Wilkerson, vice president and chief counsel with the American Council of Life Insurers, Washington, says the SEC's proposal exposes the separate accounts to possible litigation.
"This type of disclosure unnecessarily invites opportunistic litigation that second-guesses business judgment and management decisions," Wilkerson writes.
The SEC proposal calls for separate accounts to disclose, with specificity, any policies and procedures for deterring frequent purchases and redemptions, as well as arrangements to permit frequent purchases and redemptions.
Separate accounts would have to indicate whether any restrictions apply uniformly in all cases and whether the restrictions will not be imposed in certain cases, and they would have to describe such circumstances with specificity.
