The U.S. Securities and Exchange Commission has just given the retirement income planning community a gift that, in easier times, would have led to much drinking of champagne: the final regulations for a new summary prospectus for variable life insurance contracts and variable annuity contracts.
The new summary prospectuses are supposed to look like mutual fund summary prospectuses.
Life insurers, and advisors who help clients buy variable products, have been hoping for years that access to a consumer-friendly explanatory document could increase consumers’ understanding of variable products; increase advisors’ own understanding of the products; and, possibly, increase sales, simply by making the product disclosures look less terrifying.
- A copy of the final regulation, and links to copies of the associated forms, are available here.
- An article about comments on the summary prospectus project is available here.
- A news article about the release of the final regulations is available here.
Both the Insured Retirement Institute and the American Council of Life Insurers put out statements welcoming the arrival of the new regulations.
“This is a major leap forward in the ability to provide consumers with information they need to make educated investment decisions about financial products that can be essential to ensure a secure and dignified retirement,” Jason Berkowitz, the IRI chief legal and regulatory affairs officer, said.
Carl Wilkerson, the ACLI’s chief counsel for insurers, called the new summary prospectus “truly a win, win, win.”
“It is a win for consumers because it will help them make informed purchasing decisions,” Wilkerson said. “It is a win for life insurers because it improves disclosure and reduces printing, postage, storage and transportation costs. And it is a win for the environment because it will significantly lower the carbon footprint through electronic delivery and less paper waste.”
Here are seven facts about the new regulations.
1. Effective Date
The regulations are set to take effect July 20.
2. The People
The contact people listed in the introduction, in the full regulatory packet, are Daniel Chang, Pamela Ellis, Bradley Gude, James Maclean, Amy Miller, Michael Pawluk, Harry Eisenstein and Michael Kosoff.