The U.S. Securities and Exchange Commission may free insurers from one part of proposed investment advisor disclosure requirements.

The proposed rule and form changes would require investment advisors to give clients and prospective clients plain English brochures describing their business practices and potential conflicts of interest, SEC officials write in a preamble to the proposed changes, which appear today in the Federal Register.

The proposal would require advisors that accept prepaid fees to give clients’ audited balance sheets for the most recent fiscal year. The advisors also would have to disclose conditions that could threaten their solvency and the safety of the prepaid fees.

The SEC proposed a similar change in 2000, but it now proposes to “exclude [advisors] from the balance sheet requirement if they require prepaid fees but are qualified custodians or insurance companies,” officials write. “These firms are subject to capital and regulatory requirements, designed to guard against insolvency, that eliminate the need for [advisor] to deliver a balance sheet.”