Registration for Index-Linked Annuities Act
Bill: H.R.4865 | Sponsor: Rep. Adams, Alma S. (D-NC)
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 must be 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performance of a specified benchmark index or rate, and (2) may be subject to a market value adjustment if amounts are withdrawn early.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.

    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) 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).
            (2) Market value adjustment.--The term ``market value 
        adjustment'' means, with respect to a registered index-linked 
        annuity--
                    (A) an adjustment to the value of such annuity 
                based on calculations using a predetermined formula; or
                    (B) a change in interest rates (or other factor, as 
                determined by the Securities and Exchange Commission) 
                that applies to such annuity following an early 
                withdrawal or contract discontinuance.
            (3) Purchaser.--The term ``purchaser'' means a purchaser of 
        a registered index-linked annuity.
            (4) Registered index-linked annuity.--The term ``registered 
        index-linked annuity'' means an annuity that--
                    (A) is deemed a security;
                    (B) is required to be registered with the 
                Securities and Exchange Commission;
                    (C) is issued by an insurance company that is 
                subject to the supervision of the insurance 
                commissioner of the applicable State;
                    (D) 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; and
                            (ii) may be subject to a market value 
                        adjustment if amounts are withdrawn prior to 
                        the end of the period during which such 
                        adjustment applies.
            (5) 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) Revision to Rules.--
            (1) In general.--Not later than 180 days after the date of 
        the enactment of this Act, the Securities and Exchange 
        Commission shall propose and, not later than 18 months after 
        the date of enactment of this Act, the Commission shall prepare 
        and finalize any 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 
        such registered index-linked annuity, subject to conditions the 
        Commission determines appropriate.
            (2) Design of form.--In developing the form to be 
        established under paragraph (1), the Securities and Exchange 
        Commission shall--
                    (A) design such form to ensure that purchaser using 
                such form receive the information necessary to make 
                knowledgeable decisions, taking into account--
                            (i) the availability of information;
                            (ii) the knowledge and sophistication of 
                        such purchasers;
                            (iii) the complexity of the registered 
                        index-linked annuity; and
                            (iv) any other factors the Commission 
                        determines appropriate; and
                    (B) engage in investor testing and incorporate the 
                results of such testing 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 Revisions Not Completed in a Timely Manner.--If 
the Securities and Exchange Commission fails to complete the revisions 
required by subsection (b)(1) by the time required by such subsection, 
any registered index-linked annuity may be registered on the form 
described in section 239.17b of title 17, Code of Federal Regulations. 
Such registration shall be prepared pursuant to applicable provisions 
of the form.
    (d) Rule of Construction.--Nothing in this Act shall be construed 
to--
            (1) limit the authority of the Securities and Exchange 
        Commission to determine the information to be requested in the 
        form described in subsection (b); or
            (2) preempt any State law, regulation, rule or order.
                                 <all>