The Securities and Exchange Commission may issue a long-awaited variable annuity summary prospectus rule this year, while the Department of Labor’s redraft of its rule to amend the definition of fiduciary on retirement accounts could be released in the first two weeks of April.
Lee Covington, senior vice president and general counsel for the Insured Retirement Institute, said Thursday at IRI’s Marketing conference held at National Harbor, Maryland, just outside Washington, that part of the holdup on a VA summary prospectus can be attributed to the SEC’s Investment Management division changing directors three times since IRI started pressing the agency to issue such a rule seven years ago.
However, Covington added that the current SEC commissioners, as well as SEC Chairwoman Mary Jo White, support a VA summary prospectus, which would be similar to a mutual fund prospectus.
Cathy Weatherford, IRI’s president and CEO, queried James Shorris, executive vice president and deputy general counsel at LPL Financial, as to why it has taken the SEC so long to agree on a VA summary prospectus, which would be good for investors. “The SEC is a complicated beast,” Shorris replied. The SEC has had a “very loaded agenda,” he said, particularly under Dodd-Frank mandates. “It takes a long time for this stuff to move through, and they are very conservative when it comes to rulemaking.”
But Covington said that IRI remains “optimistic” that the SEC will “take action” on such a rulemaking this year.