House Financial Services Committee OKs Annuity Bill
What You Need to Know
RILA contract issuers have had to use the same SEC registration process used to take a company public.
Rep. Alma Adams, D-N.C., introduced the bill.
Adams has 18 Republican co-sponsors and 17 Democratic co-sponsors.
The Senate companion bill, S. 3198, was introduced by a Democrat and has a Republican co-sponsor.
The House Financial Services Committee has approved a bill that could lead to a big increase in the number of registered index-linked annuities on the market.
Committee members approved H.R. 4865, the Registration for Index-Linked Annuities Act, on Thursday by a unanimous vote.
The bill would direct the Securities and Exchange Commission to develop a registration form designed for RILA products within 18 months after enactment of the act.
The Insured Retirement Institute has been one of the most visible supporters of the bill. IRI President Wayne Chopus said the committee’s vote on the bill is a step toward giving consumers more access to innovative retirement savings products.
“IRI will now work to bring this bipartisan measure to the House floor quickly,” Chopus said.
What It Means
If the bill becomes law and works as drafters expect, it would increase the number of small RILA issuers and the number of specialized RILA products introduced by big insurers by slashing registration costs.
Your clients would see a bigger menu of products that offer a limited amount of protection against investment market losses, rather than no protection or full principal protection.
The Background
The SEC now requires RILA issuers to register the products using the same S-1 and S-3 forms that might be used to take a company such as Brighthouse Financial public.
If the SEC did not develop a special RILA registration form within 18 months after the enactment date, an issuer could register RILA products using the Form N-4 form, which the SEC has developed for separate accounts organized as unit investment trusts.
