(Photo: National Law Journal)
The Securities and Exchange Commission proposed late Tuesday its long-awaited summary prospectus for variable annuities and variable life insurance contracts.
The plan is designed to help investors "better understand these contracts' features, fees, and risks, and to more easily find the information that they need to make an informed investment decision," the SEC said in releasing the plan.
SEC Chairman Jay Clayton said the proposal "is another important step in the commission's efforts to provide Main Street investors with better information to make informed investment decisions."
Clayton said during the roundtables with retail investors over the last several months, "investors have emphasized their preference for clear and concise disclosure. Providing key summary information about variable annuities and variable life insurance contracts to investors is particularly important in light of the long‑term nature of these contracts and their potential complexity."
The 480-page proposal would allow, for the first time, these contracts to use a summary prospectus to provide disclosures to investors, akin to the mutual fund summary prospectus that's been around since 2009.
"This document would be a concise, reader‑friendly summary of key facts about the contract," the SEC said. "More detailed information about the contract would be available online, and an investor also could choose to have that information delivered in paper or electronic format at no charge."
