Registration for Index-Linked Annuities Act
Bill: S.3198 | Sponsor: Sen. Smith, Tina (D-MN)
Policy area: Finance and Financial Sector

Summary:
Registration for Index-Linked Annuities Act
This bill requires the Securities and Exchange Commission (SEC) to create a new form for the registration of index-linked annuities to ensure that a purchaser can make a knowledgeable decision.
The bill defines a registered index-linked annuity as an annuity that is deemed a security, that is registered with the SEC, and that is issued by an insurance company subject to state supervision. Furthermore, the returns of these annuities (1) are based on the performance of a specified benchmark index or rate, and (2) may be subject to a market value adjustment if amounts are withdrawn early.

To direct the Securities and Exchange Commission to revise any rules 
necessary to enable issuers of index-linked annuities to register on a 
 form tailored specifically to registered index-linked annuities, and 
                          for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Registration for Index-Linked 
Annuities Act''.

SEC. 2. PARITY FOR REGISTERED INDEX-LINKED ANNUITIES REGARDING 
              REGISTRATION RULES.

    (a) Definitions.--In this section:
            (1) Commission.--The term ``Commission'' means the 
        Securities and Exchange Commission.
            (2) Investment company.--The term ``investment company'' 
        has the meaning given the term in section 3 of the Investment 
        Company Act of 1940 (15 U.S.C. 80a-3).
            (3) Market value adjustment.--The term ``market value 
        adjustment'' means, with respect to a registered index-linked 
        annuity, after an early withdrawal or contract discontinuance--
                    (A) an adjustment to the value of that annuity 
                based on calculations using a predetermined formula; or
                    (B) a change in interest rates (or other factor, as 
                determined by the Commission) that apply to that 
                annuity.
            (4) Purchaser.--The term ``purchaser'' means a purchaser of 
        a registered index-linked annuity.
            (5) Registered index-linked annuity.--The term ``registered 
        index-linked annuity'' means an annuity--
                    (A) that is deemed to be a security;
                    (B) that is registered with the Commission in 
                accordance with section 5 of the Securities Act of 1933 
                (15 U.S.C. 77e);
                    (C) that is issued by an insurance company that is 
                subject to the supervision of--
                            (i) the insurance commissioner or bank 
                        commissioner of any State; or
                            (ii) any agency or officer performing like 
                        functions as a commissioner described in clause 
                        (i);
                    (D) that is not issued by an investment company; 
                and
                    (E) the returns of which--
                            (i) are based on the performance of a 
                        specified benchmark index or rate (or a 
                        registered exchange traded fund that seeks to 
                        track the performance of a specified benchmark 
                        index or rate); and
                            (ii) may be subject to a market value 
                        adjustment if amounts are withdrawn before the 
                        end of the period during which that market 
                        value adjustment applies.
            (6) Security.--The term ``security'' has the meaning given 
        the term in section 2(a) of the Securities Act of 1933 (15 
        U.S.C. 77b(a)).
    (b) Rules.--
            (1) In general.--Not later than 180 days after the date of 
        enactment of this Act, the Commission shall propose, and, not 
        later than 18 months after the date of enactment of this Act, 
        the Commission shall prepare and finalize, new or amended 
        rules, as appropriate, to establish a new form in accordance 
        with paragraph (2) on which an issuer of a registered index-
        linked annuity may register that registered index-linked 
        annuity, subject to conditions the Commission determines 
        appropriate, which may include requiring the issuer to take the 
        steps described in section 240.12h-7(e) of title 17, Code of 
        Federal Regulations, or any successor regulation, with respect 
        to the registered index-linked annuity.
            (2) Design of form.--In developing the form required to be 
        established under paragraph (1), the Commission shall--
                    (A) design the form to ensure that a purchaser 
                using the form receives the information necessary to 
                make knowledgeable decisions, taking into account--
                            (i) the availability of information;
                            (ii) the knowledge and sophistication of 
                        that class of purchasers;
                            (iii) the complexity of the registered 
                        index-linked annuity; and
                            (iv) any other factor the Commission 
                        determines appropriate;
                    (B) engage in investor testing; and
                    (C) incorporate the results of the testing required 
                under subparagraph (B) in the design of the form, with 
                the goal of ensuring that key information is conveyed 
                in terms that a purchaser is able to understand.
    (c) Treatment if Rules Not Prepared and Finalized in a Timely 
Manner.--
            (1) In general.--If, as of the date that is 18 months after 
        the date of enactment of this Act, the Commission has failed to 
        prepare and finalize the rules required under subsection 
        (b)(1), any registered index-linked annuity may be registered 
        on the form described in section 239.17b of title 17, Code of 
        Federal Regulations, or any successor regulation.
            (2) Preparation.--A registration described in paragraph (1) 
        shall be prepared pursuant to applicable provisions of the form 
        described in that paragraph.
            (3) Termination.--This subsection shall terminate upon the 
        establishment by the Commission of the form described in 
        subsection (b).
    (d) Rules of Construction.--Nothing in this section may be 
construed to--
            (1) limit the authority of the Commission to--
                    (A) determine the information to be requested in 
                the form described in subsection (b); or
                    (B) extend the eligibility for the form described 
                in subsection (b) to a product that is similar to, but 
                is not, a registered index-linked annuity; or
            (2) preempt any State law, regulation, rule, or order.

            Passed the Senate December 6, 2022.

            Attest:

                                                             Secretary.
117th CONGRESS

  2d Session

                                S. 3198

_______________________________________________________________________