ACLI Challenges SEC Proposal On Separate Account Disclosure
Life insurers are challenging a Securities and Exchange Commission proposal that would require variable product separate accounts to disclose publicly details of tools that are used to prevent market timing abuses.
In a letter to the SEC, Carl B. Wilkerson, vice president and chief counsel with the American Council of Life Insurers, Washington, says the SECs proposal exposes the separate accounts to possible litigation.
“This type of disclosure unnecessarily invites opportunistic litigation that second-guesses business judgment and management decisions,” he 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 restriction applies uniformly in all cases, whether it will not be imposed in certain cases and to describe such circumstances with specificity.