The Financial Industry Regulatory Authority has drafted rules that could affect marketers of variable annuity and variable life products.
FINRA, Washington, wants to streamline existing rules and staff interpretations and also to create new rules for how member firms should handle variable products, illustrations of hypothetical performance and investment analysis tools, officials say.
The draft, FINRA Regulatory Notice 08-39, would update NASD Interpretive Material 2210-2, "Communications with the Public About Variable Life Insurance and Variable Annuities," a batch of guidance first issued in 1993.
Two sections in the draft that concern communications about product liquidity, guarantee claims and riders would:
- Prohibit communications from implying that a variable product is a mutual fund.
- Prohibit communications from implying that variable products are short-term, liquid investments.
- Create, for the first time, specific provisions regarding variable product riders.
