Registration for Index-Linked Annuities Act

Bill: 117-s-3198
Sponsor: full_name: Sen. Smith, Tina [D-MN]
Introduced: 2021-11-04
Policy area: Finance and Financial Sector
Subjects: Insurance industry and regulation

Interest, dividends, interest rates

Licensing and registrations

Performance measurement

Securities

Securities and Exchange Commission (SEC)
Latest action: action_date: 2022-12-07
text: Held at the desk.

Summaries:
action_date: 2021-11-04
action_desc: Introduced in Senate
text: <p><b>Registration for Index-Linked Annuities Act</b></p> <p>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.</p> <p>The bill defines a <em>registered index-linked annuity</em> 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performance of a specified benchmark index or rate, and (2) may be subject to a market value adjustment if amounts are withdrawn early.</p>

action_date: 2022-12-06
action_desc: Passed Senate
text: <p><b>Registration for Index-Linked Annuities Act</b></p> <p>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.</p> <p>The bill defines a <em>registered index-linked annuity</em> 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performance of a specified benchmark index or rate, and (2) may be subject to a market value adjustment if amounts are withdrawn early.</p>

tv_txt: II 117th CONGRESS 1st Session S. 3198 IN THE SENATE OF THE UNITED STATES November 4, 2021 Ms. Smith (for herself and Mr. Tillis ) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs A BILL 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.

1. Short title This Act may be cited as the Registration for Index-Linked Annuities Act . 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— (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 applies to that annuity after an early withdrawal or contract discontinuance. (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 required to be registered with the Commission; (C) that is issued by an insurance company that is subject to the supervision of the insurance commissioner of the applicable State; (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; 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. (2) Design of form In developing the form 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. (d) Rules of construction Nothing in this section may be construed to— (1) limit the authority of the 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.

tv_txt: 117th CONGRESS 2d Session S. 3198 IN THE SENATE OF THE UNITED STATES AN ACT 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.

1. Short title This Act may be cited as the Registration for Index-Linked Annuities Act . 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. Secretary