Protecting Investors with Enhanced Disclosure Requirements for Registered Index-Linked Annuities

The Securities and Exchange Commission (SEC) recently proposed tailored disclosure requirements and offering processes for registered index-linked annuity (RILA) offerings. The amendments are designed to enhance investor protections and provide investors with easily understandable information in order to make informed decisions. The new rules will ensure investors have access to relevant details about the risks associated with RILAs, as well as the potential gains or losses an investor may face when investing in them. The proposed amendments seek to build on the current SEC framework for variable annuities, by requiring information be provided in a way that is easy for retail investors to understand. The proposal seeks to extend certain antifraud guidance to RILA advertisements and sales literature, and would allow insurance companies to conduct offerings of RILAs in the same way they conduct offerings of variable annuities. Investor testing was done in conjunction with the proposed changes to help inform the approach taken. The goal is for the improved disclosure process for these complex products to provide investors with the necessary information they need to make informed decisions.