SEC headquarters in Washington. (Photo: AP)

The Securities and Exchange Commission said Wednesday that it has adopted its long-awaited variable annuity summary prospectus rule.

The new 713-page rule and amendments are designed to simplify and streamline disclosures for investors about variable annuities and variable life insurance contracts.

“The Commission is taking this important step to improve Main Street investors’ understanding of these products,” said SEC Chairman Jay Clayton, in a statement. “With today’s technology and the benefits of layered disclosure, investors should not have to work through hundreds of pages of disclosure to understand these products’ risks, fees, and features in order to make informed investment decisions.”

Dalia Blass, director of the SEC’s Division of Investment Management, said in November that the VA summary prospectus rule would likely be released by April.

The changes permit the use of a concise, reader-friendly prospectus designed to improve investors’ understanding of the contracts’ features, fees and risks.

“The framework’s use of layered disclosure and technology will provide investors with a roadmap so that they can more easily access information that they need to make an informed investment decision. These changes are an important milestone in the Commission’s ongoing efforts to improve the investor experience,” the SEC said.

The new rule permits variable annuity and variable life insurance contracts to use a summary prospectus to provide disclosures to investors, much like a mutual fund prospectus.

Jason Berkowitz, chief legal and regulatory affairs officer for the Insured Retirement Institute, said that IRI is “carefully scrutinizing the final rule with our members to fully understand its ramifications and to ensure that it allows for a more rational disclosure of important consumer information versus today’s required book-length paper versions delivered by U.S. mail.”