On March 11, 2020, the Securities and Exchange Commission announced the adoption of new rule 498A under the Securities Act to help investors make informed investment decisions regarding variable annuity and variable life insurance contracts. Rule 498A adopts certain provisions regarding information made available to investors, including amendments to registration Forms N-3, N-4, and N-6, which are intended to improve the content, format, and presentation of information to investors. In addition, the Commission adopted amendments to require the use of Inline XBRL for the submission of certain required disclosures in the variable contract statutory prospectus.
The Commission received mixed comments to their initial rule proposal on variable annuity products concerning whether Inline XBRL should be required; and noted in the final rule that several commenters expressed concern that developing a taxonomy “would be exceptionally difficult for these products with their bespoke features.” XBRL US submitted a comment letter to the SEC in response to the proposal in March 2019, which referenced a prototype variable annuity taxonomy we developed in support of the proposal. The SEC final rule referenced that demonstration taxonomy in response to the concerns noted by these commenters.
In addition to the final rule, the SEC published a draft Variable Insurance Product (VIP) Taxonomy which had been posted for a 90-day public review to begin after publication in the Federal Register.
Read the SEC release.
Read the final rule.
