NU Online News Service, April 9, 4:07 p.m. — Washington
The U.S. Securities and Exchange Commission is set to unveil a new registration form that is tailor-made for variable life insurance.
The new form is scheduled to be reviewed at the SEC’s April 11 meeting. Assuming the commissioners approve it, it will be the culmination of a nearly 10-year effort by life insurers to develop a form specifically suited to variable life.
Carl Wilkerson, chief counsel with the American Council of Life Insurers, Washington, says no one outside the SEC has seen the final version of the registration form that the SEC will consider.
During the April 11 meeting, the commissioners will discuss the form and vote on whether to accept it, but it will take another five to seven days before the form is published, Wilkerson says.
Nonetheless, Wilkerson says, he is confident that the new form will be simpler, streamlined, shorter and designed to provide information to consumers in plain English.
For life insurers, the new form will offer significant savings in terms of printing, postage and storage costs, thanks to the streamlined disclosure and plain-English requirements, Wilkerson says.
Wilkerson predicts the form will put variable life on an equal footing with mutual funds, which have had a streamlined prospectus for some time.
The new form will also benefit consumers, Wilkerson says, because it will be easier for them to read variable life documents and thus make a more informed purchasing decision.
The current variable life registration form is a blend of pre-existing forms that were never designed for variable life products, Wilkerson says.
Wilkerson says he is confident the new form will be streamlined, but he emphasizes that insurers will not know how the SEC resolved certain important issues until the form is published.
These issues include the rules for disclosing fees and charges and the standards for policy illustrations, Wilkerson says.