Registration for Index-Linked Annuities and Registered Market Value Adjustment Annuities; Amendments To Form N-4 for Index-Linked Annuities, Registered Market Value Adjustment Annuities, and Variable Annuities; Other Technical Amendments

<RULE> SECURITIES AND EXCHANGE COMMISSION <CFR>17 CFR Parts 230, 232, 239, and 274</CFR> <DEPDOC>[Release No. 33-11294; 34-100450; IC-35273; File No. S7-16-23]</DEPDOC> <RIN>RIN 3235-AN30</RIN> <SUBJECT>Registration for Index-Linked Annuities and Registered Market Value Adjustment Annuities; Amendments To Form N-4 for Index-Linked Annuities, Registered Market Value Adjustment Annuities, and Variable Annuities; Other Technical Amendments</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Securities and Exchange Commission. <HD SOURCE="HED">ACTION:</HD> Final rule. <SUM> <HD SOURCE="HED">SUMMARY:</HD> The Securities and Exchange Commission (“Commission”) is adopting rule and form amendments to provide a tailored form to register the offerings of registered index-linked annuities (“RILAs”). Specifically, the Commission is amending the form currently used by most variable annuity separate accounts, Form N-4, to require issuers of RILAs to register offerings on that form as well. To facilitate this amendment, the Commission is also amending certain filing rules and making other related amendments. These changes will implement the requirements relating to RILAs contained in the Consolidated Appropriations Act, 2023. The Commission is also extending the registration, filing, and disclosure requirements that the Commission is adopting for RILA offerings to the offerings of registered market value adjustment annuities. Further, the Commission is adopting other amendments to Form N-4 that will apply to all issuers that use that form. The Commission is applying to RILA and registered market value adjustment annuity advertisements and sales literature a current Commission rule that provides guidance as to when sales literature is materially misleading under the Federal securities laws. Finally, the Commission is adopting technical amendments to Forms N-6 and N-3 to correct errors from prior Commission rulemakings. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> <E T="03">Effective date:</E> This rule is effective September 23, 2024. <E T="03">Compliance dates:</E> The applicable compliance dates are discussed in section II.J of this Release. </EFFDATE> <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> Pamela Ellis, Alexis Hassell, Rachael Hoffman, Michael Khalil, Amy Miller, or Gregory Scopino, Senior Counsels; Bradley Gude, Branch Chief; Amanda Hollander Wagner, Senior Special Counsel; or Brian McLaughlin Johnson, Assistant Director, Investment Company Regulation Office, at (202) 551-6792; Min Oh, Senior Counsel; or Elizabeth Bentzinger or Michael Kosoff, Senior Special Counsels, Disclosure Review and Accounting Office, at (202) 551-6921, Division of Investment Management, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-8549. </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> The Commission is amending the following rules and forms: <FTREF/> <FTNT> <SU>1</SU>  15 U.S.C. 77a <E T="03">et seq.</E> </FTNT> <GPOTABLE COLS="2" OPTS="L2,tp0,i1" CDEF="s200,xs105"> <TTITLE> </TTITLE> <CHED H="1">Commission reference</CHED> Securities Act of 1933 (“Securities Act”):  <SU>1</SU> </ENT> </ROW> <ROW> <ENT I="03">Rule 156</ENT> <ENT>§ 230.156.</ENT> </ROW> <ROW> <ENT I="03">Rule 172</ENT> <ENT>§ 230.172.</ENT> </ROW> <ROW> <ENT I="03">Rule 405</ENT> <ENT>§ 230.405.</ENT> </ROW> <ROW> <ENT I="03">Rule 415</ENT> <ENT>§ 230.415.</ENT> </ROW> <ROW> <ENT I="03">Rule 424</ENT> <ENT>§ 230.424.</ENT> </ROW> <ROW> <ENT I="03">Rule 433</ENT> <ENT>§ 230.433.</ENT> </ROW> <ROW> <ENT I="03">Rule 456</ENT> <ENT>§ 230.456.</ENT> </ROW> <ROW> <ENT I="03">Rule 457</ENT> <ENT>§ 230.457.</ENT> </ROW> <ROW> <ENT I="03">Rule 485</ENT> <ENT>§ 230.485.</ENT> </ROW> <ROW> <ENT I="03">Rule 497</ENT> <ENT>§ 230.497.</ENT> </ROW> <ROW> <ENT I="03">Rule 498A</ENT> <ENT>§ 230.498A.</ENT> </ROW> <ROW> <ENT I="22">Regulation S-T:</ENT> </ROW> <ROW> <ENT I="03">Rule 313 of Regulation S-T</ENT> <ENT>§ 232.313.</ENT> </ROW> <ROW> <ENT I="03">Rule 405 of Regulation S-T</ENT> <ENT>§ 232.405.</ENT> </ROW> <ROW> <ENT I="22">Forms:</ENT> </ROW> <ROW> <ENT I="03">Form N-3</ENT> <ENT>§ 239.17a and 274.11b.</ENT> </ROW> <ROW> <ENT I="03">Form N-4</ENT> <ENT>§ 239.17b and 274.11c.</ENT> </ROW> <ROW> <ENT I="03">Form N-6</ENT> <ENT>§ 239.17c and 274.11d.</ENT> </ROW> <ROW> <ENT I="03">Form 24F-2</ENT> <ENT>§ 239.66 and § 274.24.</ENT> </ROW> </GPOTABLE> <HD SOURCE="HD1">Table of Contents</HD> <EXTRACT> <FP SOURCE="FP-2">I. Introduction and Background</FP> <FP SOURCE="FP1-2">A. Overview of RILA Features</FP> <FP SOURCE="FP1-2">B. Overview of Registered MVA Annuity Features</FP> <FP SOURCE="FP1-2">C. Current Registration Requirements for RILAs and Registered MVA Annuities</FP> <FP SOURCE="FP1-2">D. Developments and Analysis Informing Final Amendments</FP> <FP SOURCE="FP1-2">1. Investor Testing Informing Final Amendments</FP> <FP SOURCE="FP1-2">2. Analysis of Comments on Recurring Disclosure Topics Informing Final Amendments</FP> <FP SOURCE="FP1-2">E. Overview of the Final Amendments</FP> <FP SOURCE="FP-2">II. Discussion</FP> <FP SOURCE="FP1-2">A. Use of Form N-4 for RILAs</FP> <FP SOURCE="FP1-2">B. Use of Form N-4 for Registered MVA Annuities</FP> <FP SOURCE="FP1-2">C. Contents of Form N-4</FP> <FP SOURCE="FP1-2">1. Front and Back Cover Pages (Item 1)</FP> <FP SOURCE="FP1-2">2. Overview of the Contract (Item 2)</FP> <FP SOURCE="FP1-2">3. Key Information Table (Item 3)</FP> <FP SOURCE="FP1-2">4. Principal Disclosure Regarding Index-Linked Options and MVA Options (Items 6 and 17)</FP> <FP SOURCE="FP1-2">5. Principal Risks of Investing in the Contract (Item 5)</FP> <FP SOURCE="FP1-2">6. Addition of Contract Adjustments and Other Amendments to Fee and Expense Disclosures (Items 4, 7, and 22)</FP> <FP SOURCE="FP1-2">7. Information About Contracts With Index-Linked and/or MVA Options (Item 31A)</FP> <FP SOURCE="FP1-2">8. Other Amendments and Provisions</FP> <FP SOURCE="FP1-2">9. Remaining Form N-4 Items</FP> <FP SOURCE="FP1-2">10. Inline XBRL</FP> <FP SOURCE="FP1-2">D. Option To Use a Summary Prospectus</FP> <FP SOURCE="FP1-2">1. Overview—Use of Summary Prospectus for Non-Variable Annuities</FP> <FP SOURCE="FP1-2">2. Initial Summary Prospectus</FP> <FP SOURCE="FP1-2"> 3. Updating Summary Prospectus </FP> <FP SOURCE="FP1-2">4. Online Accessibility of Contract Statutory Prospectus and Certain Other Documents Relating to the Contract</FP> <FP SOURCE="FP1-2">5. Other Requirements for Summary Prospectus and Other Contract Documents</FP> <FP SOURCE="FP1-2">E. Accounting (Items 16 and 26)</FP> <FP SOURCE="FP1-2">F. Filing and Prospectus Delivery Rules</FP> <FP SOURCE="FP1-2">1. Fee Payment Method and Amendments to Form 24F-2</FP> <FP SOURCE="FP1-2">2. Post-Effective Amendments and Prospectus Supplements</FP> <FP SOURCE="FP1-2">3. Prospectus Delivery</FP> <FP SOURCE="FP1-2">G. Communication Rules Applicable to Non-Variable Annuities Sales Literature (Rule 156)</FP> <FP SOURCE="FP1-2">2. Free Writing Prospectuses and Advertisements (Rules 433 and 482)</FP> <FP SOURCE="FP1-2">H. Existing Commission Letters</FP> <FP SOURCE="FP1-2">I. Technical Amendments to Forms N-3 and N-6</FP> <FP SOURCE="FP1-2">J. Effective and Compliance Dates</FP> <FP SOURCE="FP-2">III. Other Matters</FP> <FP SOURCE="FP-2">IV. Economic Analysis</FP> <FP SOURCE="FP1-2">A. Introduction</FP> <FP SOURCE="FP1-2">B. Baseline</FP> <FP SOURCE="FP1-2">1. Affected Parties</FP> <FP SOURCE="FP1-2">2. Current Regulatory Requirements</FP> <FP SOURCE="FP1-2">3. Market Practice</FP> <FP SOURCE="FP1-2">C. Benefits and Costs</FP> <FP SOURCE="FP1-2">1. Benefits</FP> <FP SOURCE="FP1-2">2. Costs</FP> <FP SOURCE="FP1-2">D. Effects on Efficiency, Competition, and Capital Formation</FP> <FP SOURCE="FP1-2">E. Reasonable Alternatives Considered</FP> <FP SOURCE="FP1-2">1. Creating an Entirely New Registration Form for RILAs</FP> <FP SOURCE="FP1-2">2. Alternatives to Specific Form N-4 Amendments</FP> <FP SOURCE="FP1-2">3. Limiting Scope of Structured Data Requirements</FP> <FP SOURCE="FP-2">V. Paperwork Reduction Act</FP> <FP SOURCE="FP1-2">A. Rule 498A</FP> <FP SOURCE="FP1-2">B. Form N-4</FP> <FP SOURCE="FP1-2">C. Form 24F-2</FP> <FP SOURCE="FP1-2">D. Investment Company Interactive Data</FP> <FP SOURCE="FP-2">VI. Regulatory Flexibility Act Certification Statutory Authority</FP> </EXTRACT> <HD SOURCE="HD1">I. Introduction and Background</HD> The Commission is adopting rule and form amendments (“final amendments”) that are designed to help investors make informed decisions regarding RILAs. To modernize and enhance the registration and disclosure framework for RILAs, we are adopting amendments that will require offerings of RILAs to be registered on Form N-4, the registration form for most variable annuities, as well as adapt that form to accommodate RILAs. These amendments finalize rule and form amendments that the Commission proposed in September 2023. <SU>2</SU> <FTREF/> <FTNT> <SU>2</SU>   <E T="03">See</E> Registration for Index-Linked Annuities; Amendments to Form N-4 for Index-Linked and Variable Annuities, Investment Company Act Release No. 35028 (Sept. 29, 2023) [88 FR 71088 (Oct. 13, 2023)] (“Proposing Release” or “proposal”). The Commission voted to issue the Proposing Release on September 29, 2023. The release was posted on the Commission website that day, and comment letters were received beginning the same day. The comment period closed on November 28, 2023. We have considered all public comment received through May 28, 2024. The comment letters on the Proposing Release are available at <E T="03">https://www.sec.gov/comments/s7-16-23/s71623.htm.</E> </FTNT> The amendments implement Congress' directive to the Commission in Division AA, Title I of the Cons ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 962k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━