"UNRECOVERABLE: Timeout During Enrichment"

Conformed to Federal Register version 

SECURITIES AND EXCHANGE COMMISSION 

17 CFR Parts 230, 232, 239, and 274 

[Release No. 33-11250; 34-98624; IC-35028; File No. S7-16-23] 

RIN: 3235-AN30 

Registration for Index-Linked Annuities; Amendments to Form N-4 for Index-Linked and 

Variable Annuities 

AGENCY: Securities and Exchange Commission. 

ACTION: Proposed rule. 

SUMMARY: The Securities and Exchange Commission (“Commission”) is proposing rule and 

form amendments to provide a tailored form to register the offerings of registered index-linked 

annuities (“RILAs”). Specifically, the Commission is proposing to amend 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 

proposing to amend certain filing rules and make other related amendments. These changes 

would, if adopted, implement the requirements relating to RILAs contained in Division AA, Title 

I of the Consolidated Appropriations Act, 2023. Further, the Commission is proposing other 

amendments to Form N-4 that would apply to all issuers that would use that form under the 

proposal. The Commission is also proposing to apply to RILA advertisements and sales literature 

a current Commission rule that provides guidance as to when sales literature is materially 

misleading under the Federal securities laws. The Commission is proposing a technical 

amendment to Form N-6 to correct an error from a prior Commission rulemaking. Finally, the 



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Commission requests comment as to whether to require the registration of market-value 

adjustments associated with certain annuities on Form N-4 as well. 

DATES: Comments should be submitted on or before November 28, 2023. 

ADDRESSES: Comments may be submitted by any of the following methods: 

Electronic Comments: 

• Use the Commission’s internet comment form (https://www.sec.gov/rules/2023/09/rila); 

or  

• Send an email to [email protected]. Please include File Number S7-16-23 on the 

subject line. 

Paper Comments: 

• Send paper comments to Secretary, Securities and Exchange Commission, 100 F Street 

NE, Washington, DC 20549-1090. 

All submissions should refer to File Number S7-16-23. This file number should be 

included on the subject line if email is used. To help the Commission process and review your 

comments more efficiently, please use only one method of submission. The Commission will 

post all comments on the Commission’s website (https://www.sec.gov/rules/2023/09/rila). 

Comments are also available for website viewing and printing in the Commission’s Public 

Reference Room, 100 F Street NE, Washington, DC 20549, on official business days between 

the hours of 10 a.m. and 3 p.m. Operating conditions may limit access to the Commission’s 

public reference room. Do not include personal identifiable information in submissions; you 

should submit only information that you wish to make available publicly. We may redact in part 

or withhold entirely from publication submitted material that is obscene or subject to copyright 

https://www.sec.gov/rules/2023/09/rila
https://www.sec.gov/rules/2023/09/rila


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protection. Retail investors seeking to comment on their experiences with annuities generally and 

RILAs in particular may want to submit a short Feedback Flyer, available at Appendix D. 

Studies, memoranda, or other substantive items may be added by the Commission or staff 

to the comment file during this rulemaking. A notification of the inclusion in the comment file of 

any such materials will be made available on the Commission’s website. To ensure direct 

electronic receipt of such notifications, sign up through the “Stay Connected” option at 

www.sec.gov to receive notifications by email. 

A summary of the proposal of not more than 100 words is posted on the Commission’s 

website (https://www.sec.gov/rules/2023/09/rila). 

FOR FURTHER INFORMATION CONTACT: Christian Corkery, Michael Khalil, Rachael 

Hoffman, James Maclean, Amy Miller, or Laura Harper Powell, 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; 

Elisabeth Bentzinger or Min Oh, Senior Counsels; Michael Kosoff, Senior Special Counsel, 

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. 

SUPPLEMENTARY INFORMATION: The Commission is proposing amendments to the 

following rules and forms:  

Commission Reference CFR Citation (17 CFR) 
Securities Act of 1933 (“Securities Act”)1 

Rule 156 §230.156 
Rule 172 §230.172 
Rule 405 §230.405 

 

1  15 U.S.C. 77a et seq. 

https://www.sec.gov/files/rules/proposed/2023/rila-feedback-flyer.pdf
https://www.sec.gov/rules/2023/09/rila


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Commission Reference CFR Citation (17 CFR) 
Rule 415 §230.415 
Rule 424 §230.424 
Rule 456 §230.456 
Rule 457 §230.457 
Rule 485 §230.485 
Rule 497 §230.497 

Rule 498A §230.498A 
Regulation S-T 

Rule 313 of Regulation S-T §232.313 
Rule 405 of Regulation S-T §232.405 

Forms 
Form N-4 §239.17b and 274.11c 
Form N-6 §239.17c and 274.11d 

Form 24F-2 §239.66 and §274.24 

TABLE OF CONTENTS 

I. Introduction and Background ....................................................................................................5 
A. Typical RILA Features ........................................................................................................9 
B. Current Registration Process..............................................................................................14 
C. Evidence of Investor Views and Areas of Potential Confusion .........................................19 
D. Overview of Proposal ........................................................................................................28 

II. Discussion ................................................................................................................................29 
A. Use of Form N-4 ................................................................................................................29 
B. Contents of Form N-4 ........................................................................................................35 

1. Front and Back Cover Pages (Item 1) ..........................................................................37 
2. Key Information Table (Item 3) ...................................................................................41 
3. Principal Disclosure Regarding RILAs (Items 2, 6, and 17) .......................................69 
4. Principal Risks of Investing in the Contract (Item 5) ................................................105 
5. Addition of Contract Adjustments and Other Amendments to Fee and Expense 

Disclosures (Items 4, 7, and 22).................................................................................113 
6. Information about Contracts with Index-Linked Options (Item 31A) .......................125 
7. Other Amendments and Provisions ...........................................................................128 
8. Remaining Form N-4 Items .......................................................................................141 
9. Inline XBRL...............................................................................................................152 

C. Option to Use a Summary Prospectus .............................................................................158 
D. Accounting (Items 16 and 26) ..........................................................................................180 
E. Filing and Prospectus Delivery Rules ..............................................................................185 

1. Fee Payment Method and Amendments to Form 24F-2 ............................................185 
2. Post-Effective Amendments and Prospectus Supplements........................................191 
3. Prospectus Delivery ...................................................................................................196 

F. Materially Misleading Statements in RILA Sales Literature ...........................................198 
G. Existing Commission Letters ...........................................................................................205 
H. Registered Market-Value Adjustment Annuities .............................................................207 



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I. Technical Amendment to Form N-6 ................................................................................211 
J. Compliance Period ...........................................................................................................212 
K. General Request for Comment from Retail Investors......................................................214 

III. Economic Analysis ................................................................................................................215 
A. Introduction ......................................................................................................................215 
B. Baseline ............................................................................................................................218 

1. Affected Parties ..........................................................................................................218 
2. Current Regulatory Requirements .............................................................................225 
3. Market Practice ..........................................................................................................228 

C. Benefits and Costs............................................................................................................237 
1. Benefits ......................................................................................................................237 
2. Costs ...........................................................................................................................262 

D. Effects on Efficiency, Competition, and Capital Formation ............................................272 
E. Reasonable Alternatives...................................................................................................277 

1. Creating an Entirely New Registration Form for RILAs ...........................................277 
2. Alternatives to Specific Form N-4 Amendments.......................................................279 
3. Require the Use of Form N-4 for Registered MVAs .................................................281 
4. Limiting Scope of Structured Data Requirements .....................................................283 

F. Request for Comment ......................................................................................................284 
IV. Paperwork Reduction Act ......................................................................................................289 

A. Rule 498A ........................................................................................................................290 
B. Form N-4 ..........................................................................................................................293 
C. Form 24F-2 ......................................................................................................................296 
D. Investment Company Interactive Data .............................................................................298 
E. Request for Comment ......................................................................................................301 

V. Regulatory Flexibility Certification .......................................................................................302 
VI. Consideration of Impact on the Economy .............................................................................306 
Statutory Authority ......................................................................................................................306 

 

I. INTRODUCTION AND BACKGROUND 

An annuity contract (“annuity” or “contract”) is a type of insurance product in which an 

investor makes a lump-sum payment or a series of payments in return for future payments from 

the insurance company to meet retirement and other long-term financial goals. A RILA is one of 

several types of annuity contracts offered by insurance companies. An investor in a RILA 

allocates purchase payments to one or more investment options under which the investor’s 

returns (both gains and losses) are based at least in part on the performance of an index or other 



6 

benchmark (collectively, “indexes”), over a set period of time (“crediting period”).2 In some 

cases, insurance companies offer RILAs on a standalone basis with various index-linked 

investment options (“index-linked options”) for investors to choose from. In other cases, 

insurance companies offer “combination” annuity contracts that provide index-linked options 

together with other investment options, such as mutual funds (“portfolio companies”) offered as 

investment options under a variable annuity (“variable options”).3 An investor purchasing a 

combination contract, for example, may have the ability to allocate purchase payments under the 

contract to index-linked options; variable options that pass on the returns of mutual funds 

selected by the investor; and/or fixed account options for which the insurance company promises 

to pay a fixed and stated minimum rate of interest. The market for RILAs has grown 

significantly in recent years, with annual RILA sales of $41.1 billion in 2022 alone, more than 

 

2  Insurance companies frequently refer to crediting periods as “investment terms” or sometimes simply 
“terms.” See, e.g., Investor Testing Report on Registered Index Linked Annuities, Office of Investor 
Advocate Division (“OIAD Report”) at Section 2, RILAs: Structure of Contracts and Investment Options, 
Investment Terms. As noted in OIAD’s report, investor testing suggested that investors consistently 
struggled with this terminology, and a number of participants seemed to equate “investment term” or 
“term” with the length of the insurance contract rather than the length of the investment product options 
within the RILA contract, leading them to misunderstand the operation of the RILA. Id. at Section 5, 
Qualitative Testing, Results from Round 1. In an effort to mitigate that confusion, we have opted to use the 
term crediting period in this release and in the proposed amendments to Form N-4. The most common 
crediting periods are one, three, and six years. See id. at Section 3, Overview of the RILA Market and 
Simulated Performance over Historical Periods, RILA Indexes, Investment Terms, and Insurance Features, 
Figure 2. 

3  Variable annuity contracts and variable life insurance contracts (together, “variable contracts”) combine 
both investment and insurance features. Investors generally allocate their purchase payments to a range of 
investment options, typically mutual funds which are separately registered and have their own 
prospectuses. The investor’s account value changes depending on the performance of the investment 
options selected. Variable annuities allow investors to receive periodic payments for either a definite period 
(e.g., 20 years), or for an indefinite period (e.g., the life of the investor). See Updated Disclosure 
Requirements and Summary Prospectus for Variable Annuity and Variable Life Insurance Contracts, 
Investment Company Act Release No. 33814 (Mar. 11, 2020) [85 FR 25964 (May 1, 2020)] (“VASP 
Adopting Release”) at nn.4-5 and n.8 and accompanying text. 



7 

tripling since 2017.4 We understand that RILAs are predominantly sold by broker-dealers, 

although investment advisers may also provide advice on RILAs, and insurance companies also 

may offer RILAs directly.  

RILAs are securities for purposes of the Securities Act of 1933 (“Securities Act”).5 

Unlike variable annuity contracts for which the Commission has adopted a specific registration 

form tailored to those products, insurance companies currently register offerings of RILAs on 

Securities Act registration Forms S-1 or S-3.6 In 2022, Congress enacted Division AA, Title I of 

the Consolidated Appropriations Act, 2023 (“RILA Act”), directing the Commission to adopt a 

new registration form for RILAs within 18 months of enactment.7 The RILA Act requires the 

 

4  See LIMRA, “LIMRA: Record Annuity Sales in 2022 Expected to Continue Into First Quarter 2023,” news 
release, Mar. 8, 2023 (reporting 2022 RILA sales of $41.1 billion), 
https://www.limra.com/en/newsroom/news-releases/2023/limra-record-annuity-sales-in-2022-expected-to-
continue-into-first-quarter-2023/ and LIMRA, “LIMRA Secure Retirement Institute: Total Annuity Sales 
Continued to Decline in 2017,” news release, Feb. 21, 2018 (reporting 2017 sales of structured annuity 
products, i.e., RILAs, of $9.2 billion), https://www.limra.com/en/newsroom/news-releases/2018/limra-
secure-retirement-institute-total-annuity-sales-continued-to-decline-in-2017/.  

5 Depending on the context, “RILA” is also used in this release to collectively refer to both stand-alone 
RILAs and the index-linked options available in a combination contract. When referring to the entity 
registering the RILA, we use the term “RILA issuer” or “insurance company.” Index annuities that meet 
the requirements of section 989J of the Dodd-Frank Wall Street Reform and Consumer Protection Act 
(Pub. L. No. 111-203) or section 3(a)(8) of the Securities Act are treated as exempt securities for purposes 
of the Securities Act, but RILAs do not fall within this exemption due, in large part, to the shifting of a 
significant level of investment risk from the RILA issuer to the investor. RILAs and index-linked option, as 
used in this release, refer only to those index annuities that are securities for the purposes of the Securities 
Act. See, e.g., sections 101(a)(5) and (6) of Division AA, Title I of the Consolidated Appropriations Act, 
2023. 

6 The registration forms for variable annuity contracts are Form N-3 (for variable annuity separate accounts 
structured as management companies) and Form N-4 (for variable annuity separate accounts structured as 
unit investment trusts). The separate account established by the sponsoring insurance company is the legal 
entity that registers its securities. Separate accounts are typically registered as investment companies under 
the Investment Company Act. See section 2(a)(37) of the Investment Company Act. The Commission first 
adopted the registration form for variable annuities over 30 years ago. See Registration Forms for Insurance 
Company Separate Accounts that Offer Variable Annuity Contracts, Investment Company Act Release No. 
14575 (June 14, 1985) [50 FR 26145] (June 25, 1985)]. In this release, we focus only on Form N-4, and not 
Form N-3, because Form N-4 is the registration form identified in the RILA Act and the form used to 
register the majority of variable annuity contracts.  

7  Pub. L. 117-328; 136 Stat. 4459 (Dec. 29, 2022). 

https://www.limra.com/en/newsroom/news-releases/2023/limra-record-annuity-sales-in-2022-expected-to-continue-into-first-quarter-2023/
https://www.limra.com/en/newsroom/news-releases/2023/limra-record-annuity-sales-in-2022-expected-to-continue-into-first-quarter-2023/
https://www.limra.com/en/newsroom/news-releases/2018/limra-secure-retirement-institute-total-annuity-sales-continued-to-decline-in-2017/
https://www.limra.com/en/newsroom/news-releases/2018/limra-secure-retirement-institute-total-annuity-sales-continued-to-decline-in-2017/


8 

Commission to design the form to ensure that a purchaser using the form receives the 

information necessary to make knowledgeable decisions, taking into account (1) the availability 

of information; (2) the knowledge and sophistication of that class of purchasers; (3) the 

complexity of the RILA; and (4) any other factor the Commission determines appropriate. The 

RILA Act also requires the Commission to engage in investor testing as part of its rulemaking 

process and to incorporate the results of the 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. If the 

Commission fails to adopt the form within 18 months of enactment, the RILA Act provides that 

RILA issuers can begin registering RILA offerings on existing Form N-4. 

We are proposing to amend Form N-4 to require RILA issuers to register RILA offerings, 

including associated features of the RILA such as any contract adjustments, on that form and to 

tailor the form’s requirements accordingly.8 We also are proposing to amend other rules related 

to the securities offering process to allow these issuers to conduct RILA offerings in the same 

way issuers conduct offerings of variable annuities. Consistent with the RILA Act, these 

proposed amendments collectively are designed to provide investors disclosures tailored to 

RILAs and highlight key information about these complex products, building on the 

Commission’s layered disclosure framework in place for variable annuities. We are also 

proposing certain amendments to Form N-4 that would apply to offerings of variable annuities, 

based on our experience with the form since its last amendment and the investor testing 

 

8  Under this proposal, the amended Form N-4 will not register the RILA issuers themselves, only the 
offering of RILA securities. Unlike separate accounts which register variable annuities, RILA issuers are 
not investment companies, and thus need not register with the Commission as an investment company as 
separate accounts do. 



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conducted in connection with this rulemaking.9 In addition, we are proposing to apply a current 

Commission rule that provides guidance as to when sales literature is materially misleading 

under the Federal securities laws to RILA advertisements and sales literature. Finally, we are 

proposing a technical amendment to Form N-6 to correct an error from a prior Commission 

rulemaking. 

A. Typical RILA Features 

RILAs are complex financial products that are sold to retail investors. The following are 

some of the most prevalent features that contribute to this complexity, and that might make it 

challenging for an investor to assess the features, risks, and possible return profile of a RILA. 

These features also are important ones for financial professionals to consider when 

recommending that an investor purchase a RILA. 

• Bounded Return Structure. Under a RILA, the insurance company will credit positive 

or negative “interest” to the investor’s contract value at the end of each crediting 

period. The amount credited is based, in part, on the performance of the specified 

index (e.g., the S&P 500).10 The amount of any positive interest credited will also 

depend on whether the contract includes provisions such as a “cap rate” or 

“participation rate.” A cap rate places an upper limit on an investor’s ability to 

participate in the index’s upside performance directly (e.g., with a current cap rate of 

5%, if the index is up 10% at the end of the crediting period, the investor’s contract 

value will be credited with only 5% positive interest). A “participation rate” sets an 

 

9  See VASP Adopting Release. 
10  Insurance companies typically choose indexes for the RILA contract where any gains in the value of the 

index do not include dividends paid on the securities that make up the index. 



10 

investor’s return to some specified percentage of the index’s return (e.g., an 80% 

participation rate would result in an investor receiving positive interest of 80 cents on 

the dollar of gains in the index). The contract generally will include one of these 

limits on how much the insurance company will credit the investor if the performance 

of the index goes up in value by the end of the crediting period (collectively “limits 

on gains”). Similarly, the contract generally will include terms limiting the investor’s 

losses to some extent if the performance of the index goes down in value. This might 

include a “buffer” (which limits the investor’s exposure to losses up to a fixed 

percentage), or a “floor” (which places a lower limit on the investor’s exposure to 

loss) (collectively “limits on losses”). For example, with a “buffer” of -5%, if the 

index is down 2%, that investor will not lose anything, but if the index is down 7% 

the investor will lose 2% (the difference between the loss and the buffer rate). With a 

“floor” of -5%, if the index is down 2%, the investor will lose 2%, but if the index is 

down 7%, the investor will only lose 5%. These limits can be complex and 

overlapping, and may change at the beginning of each new crediting period, subject 

to certain minimum guarantees stated in the contract. Over time, the investor’s 

contract value will increase or decrease, depending on the performance of the index 

and the particular contract provisions (such as the bounded return structure). Despite 

the bounded return structure, a RILA is not necessarily a low-risk investment product 

as the investor could lose a significant amount of money if the index performs poorly. 

• Fees and Expenses. For many RILAs, the investor pays no direct or explicit ongoing 

fees and expenses under the RILA, and this is sometimes a feature disclosed in RILA 

marketing materials. However, the RILA’s bounded return structure requires 



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investors to agree to tradeoffs that come with their own economic costs. In exchange 

for some protection against losses if the index goes down in value, investors must 

also agree to contractual provisions limiting the amount of gains they will receive if 

the index goes up in value. A RILA’s upside limits on gains can reduce an investor’s 

return in the same way that a direct fee can and can help make the RILA more 

profitable to the insurance company.  

• Charges and Penalties for Early Withdrawals. Investors also can lose significant 

money if they withdraw their money early from an investment option or from the 

contract. This can arise in several circumstances. First, a RILA typically will specify 

a period of time during which a “surrender charge” will apply, for example nine years 

following an investor’s last premium payment. Typically, this charge is greatest in the 

first year of the surrender period, decreasing each year until the end of the surrender 

period. An investor who withdraws money during this period will pay a fee, such as 

9% of the amount withdrawn. Second, an insurance company may make an 

adjustment, either to the investor’s contract value or to the amount paid to the 

investor, if amounts are withdrawn from an index-linked option before the end of its 

crediting period or from the contract before the end of a specified period. For 

example, when an investor in a RILA chooses a particular index-linked option, the 

RILA may provide that the index-linked option’s crediting period is one year. If 

amounts are removed from that index-linked option before the end of this one-year 

crediting period, typically for any reason, the insurance company will apply an 

“interim value adjustment” or “IVA.” The IVA will adjust the contract value based, 

generally, on a complex formula where the IVA may change daily and can be positive 



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or negative.11 As a result, the investor could lose a significant amount of money, even 

if the index has a gain at the time of the withdrawal.  

Similarly, the insurance company might apply a positive or negative “market value 

adjustment” or “MVA” (collectively with IVAs, a “contract adjustment”) to the 

contract value if the investor partially or fully withdraws amounts from the contract. 

Contract adjustments could be made in response to a number of contract transactions, 

such as a surrender, withdrawal, payment of the death benefit, or the start of annuity 

payments, and an investor could experience a negative contract adjustment even when 

the investor takes an otherwise permissible withdrawal, such as under a guaranteed 

living benefit.12 These adjustments can also negatively impact other values under the 

contract, such as the surrender value and death benefit. Moreover, these fees and 

adjustments are not always mutually exclusive. Indeed, under the terms of certain 

RILA contracts, an investor could experience a decrease in contract value from a 

negative interim value adjustment and a negative market value adjustment, depending 

on the timing of the withdrawal, and also pay a surrender charge. An investor may 

 

11  Common methods of calculating this adjustment include prorating the crediting method based on the 
number of days that have elapsed since the start of the crediting period, employing a market-based formula 
designed to approximate the present value of the index and/or employing interest-rate-based MVAs to 
offset certain insurer losses and costs, or some combination of these two. See Clifford E. Kirsch, Variable 
Annuities and Other Insurance Investment Products (Third Edition 2022) at 29-8, available at 
https://plus.pli.edu/Details/Details?start=0&rows=50&fq=%7e2B%7etitle_id%7e3A282B22%7e240085%7
e2229%7e&fq=%7e2B%7eid%7e3A282B22%7e240085-
CH29%7e2229%7e&sort=s_date+desc&origin=title. 

12  Id. at 29-13. Under these benefits, RILA investors are permitted to take a certain amount of guaranteed 
withdrawals from their contract each year without reducing the value of guaranteed withdrawals for future 
years. These can be a standard feature or an optional rider chosen by an investor. Id. at 29-12. 



13 

also be subject to income taxes and face a Federal income tax penalty if the investor 

withdraws money before a certain age.13  

• Changes by Insurer. Crediting periods for an index-linked option in a RILA contract 

generally range from one to six years. The insurance company may change or remove 

key features of index-linked options, such as the cap rates, floors, or even change the 

index. These changes may often be made at the insurance company’s discretion and 

renewal provisions can and do change over time. Also, RILA contracts typically state 

that an investor will be automatically renewed at the end of a crediting period into the 

same or substantially similar index-linked option, often with a new limit on gains. If 

the same index-linked option is unavailable, the terms of the contract generally 

provide that the insurance company may place the investor into a more conservative 

investment option as a default, such as a fixed account or an index-linked option with 

a 0% floor. 

• Taxes. Special tax rules generally apply to RILAs and other annuities, with both tax 

advantages and potential adverse tax impacts in certain circumstances. For example, 

assets within a RILA generally grow tax-deferred. As discussed above, however, 

investors may face a Federal income tax penalty if money is withdrawn before the 

investor reaches a certain age.14 

 

13 See Updated Investor Bulletin: Indexed Annuities, SEC’s Office of Investor Education and Advocacy, July 
31, 2020, https://www.sec.gov/oiea/investor-alerts-and-bulletins/ib_indexedannuities. Staff reports and 
other staff documents (including those cited herein) represent the views of Commission staff and are not a 
rule, regulation, or statement of the Commission. The Commission has neither approved nor disapproved 
the content of these documents and, like all staff statements, they have no legal force or effect, do not alter 
or amend applicable law, and create no new or additional obligations for any person.  

14  For these and other reasons, insurance companies generally advertise RILAs as a long-term investment. 
This is similar to the treatment of variable annuities. See VASP Adopting Release at n.14 and 
accompanying text. 

https://www.sec.gov/oiea/investor-alerts-and-bulletins/ib_indexedannuities


14 

Providing investors with key information is particularly important in the context of 

RILAs, since their features are typically complex and their risks may not be apparent or easily 

understood by prospective investors absent clear disclosure. Form N-4’s existing disclosure 

requirements regarding features of annuities would complement the proposed RILA-specific 

disclosures, such that the amended Form N-4 would provide investors with key information both 

about the annuity contract and the associated registered index-linked or variable investment 

options. 

B. Current Registration Process 

The current requirements for issuers offering RILAs and variable annuities differ in many 

respects, both in terms of the disclosure issuers must provide, and with respect to the registration 

process. We highlight here some of these key differences.  

On required disclosure, because the Commission currently does not have a specific 

registration form for RILAs, insurance companies register the offerings of RILAs on Forms S-1 

or S-3.15 Although specific disclosure requirements apply for certain securities such as capital 

stock or debt, the forms’ disclosure requirements are not specifically tailored to particular kinds 

of securities given the wide range of securities offerings that can be registered on the forms.16 

Forms S-1 and S-3 thus do not include specific line-item requirements addressing disclosures 

about RILAs and their complex features, such as how limits on gains operate or the application 

of contract adjustments. These forms also require issuers to disclose information about the 

 

15  See, e.g., General Instruction I of Form S-1 (“This Form shall be used for the registration under the 
Securities Act of 1933 (‘Securities Act’); of securities of all registrants for which no other form is 
authorized or prescribed”). 

16  See Item 9 of Forms S-1 and S-3 and 17 CFR 229.202 (providing specific disclosure requirements for 
certain securities such as capital stock, debt, warrants or rights, and directing issuers of other types of 
securities to include a brief description that is comparable to that required for the specified kinds of 
securities). 



15 

offering itself as well as extensive information about the registrant issuing the securities that may 

be less material to a RILA investor than information about the contract’s features. Required 

information about the registrant includes, for example, management’s discussion and analysis of 

financial condition and results of operations (“MD&A”), which requires a narrative discussion of 

the registrant’s financial statements, and disclosure about executive compensation. Domestic 

registrants also must include financial statements prepared in accordance with U.S. generally 

accepted accounting principles (“GAAP”).17 

Most variable annuities, in contrast, are registered on Form N-4.18 This form is designed 

for variable annuities and has disclosure requirements tailored to these investments. Providing 

investors with key information in a reader-friendly format is particularly important in the context 

of variable annuity contracts because their structure is complex. Accordingly, Form N-4’s 

disclosure requirements are designed to provide investors with key information relating to a 

variable contract’s provisions, benefits, and risks in a concise and reader-friendly presentation, 

along with targeted information about the insurance company and the offering. Form N-4’s 

disclosure requirements thus focus more on the specific features of variable annuities than on the 

issuing insurance company. This presentation is designed to highlight the most important 

information for an investor in a variable annuity, so that the only matters included in the 

prospectus are those for which there is a substantial likelihood that a reasonable investor would 

 

17  See 17 CFR 210.4-01(a)(1) (stating that financial statements filed with the Commission which are not 
prepared in accordance with GAAP will be presumed to be misleading or inaccurate unless the 
Commission has otherwise provided). See also infra footnote 20. 

18  According to Form N-CEN filings received through March 23, 2023, there were 419 variable annuity 
separate accounts registered as unit investment trusts (“UITs”) in 2022. 



16 

consider them important in deciding whether to invest.19 This focus on the provisions of the 

variable contract itself, rather than certain details about the operation of the insurance company, 

reflects that a variable annuity contract is not a direct investment in the capital stock or debt of 

the insurance company, but rather a contract with the insurance company under which the 

investor’s exposure to the insurance company generally is limited to the company’s ability to 

honor any guarantees associated with the contract. In addition, rule 498A together with Form N-

4 implements a layered disclosure approach for variable annuities by permitting insurance 

companies and others to use a summary prospectus framework for variable annuities while 

making the more-detailed statutory prospectus, as well as the contract’s statement of additional 

information (“SAI”), available online. Form N-4 also provides a limited exception for insurance 

companies to file financial statements prepared in accordance with statutory accounting 

principles (“SAP”), referred to as “statutory requirements” in the form instructions, rather than 

GAAP. Specifically, insurance companies, which act as the depositors of variable annuity 

separate accounts registered on Form N-4, may use SAP financials solely when the insurance 

company does not otherwise prepare GAAP financial statements or GAAP financial information 

 

19  The Commission has long sought to tailor disclosures for annuity products. See Registration Forms for 
Insurance Company Separate Accounts, Investment Company Act Release No. 13689 (Dec. 23, 1983) [49 
FR 614 (Jan. 5, 1984)] (“Form[] N-4 would permit shorter and simpler prospectuses than are required 
under current practice,... by incorporating many of the reduced disclosure requirements of Form N-1A. 
Separate account disclosure requirements that experience has shown are unnecessary also would be 
eliminated, as well as certain disclosure requirements that are holdovers from the requirements applicable 
to non-separate account unit investment trust.”); Registration Form Used By Open-End Management 
Investment Companies, Investment Company Act Release No. 12927 (Dec. 27, 1982) [48 FR 813 (Jan. 7, 
1983)] (“In order to shorten and simplify the prospectus for mutual funds, the Commission has concluded 
that it is necessary to eliminate certain types of information from the prospectus, so that only matters of 
fundamental importance to most mutual fund investors will be included in the prospectus”). 



17 

for use by a parent in the parent’s Securities Exchange Act of 1934 (“Exchange Act”) reports or 

the parent’s registration statements filed under the Securities Act.20  

With respect to the registration process, insurance companies registering an offering of 

RILA securities are required under the Securities Act to pay a registration fee to the Commission 

at the time of filing a registration statement.21 This means that they pay registration fees at the 

time they register the offer and sale of the securities, regardless of when (or if) they sell them. 

The registration statement for the RILA offering also must include current financial information, 

including any annual update required by section 10(a)(3) of the Securities Act.22 An insurance 

company registering a RILA offering on Form S-1 must provide any section 10(a)(3) update to 

 

20  See, e.g., Instruction 1 to Item 31(b) in Form N-3 and Instruction 1 to Item 26(b) in Form N-4. In addition, 
although Form S-1 requires GAAP financial statements, exemptions have been granted pursuant to 17 CFR 
210.3-13 that permit insurance companies to substitute SAP financials in lieu of GAAP financials when 
registering RILAs on Form S-1 in circumstances permitted by Form N-4. See, e.g., Letter from Jenson 
Wayne, Chief Accountant, Division of Investment Management, to Stephen E. Roth, Eversheds Sutherland 
(US) LLP, regarding Fidelity & Guaranty Life Insurance Company and Fidelity & Guaranty Life Insurance 
Company of New York (Mar. 17, 2023) (available at https://www.sec.gov/files/fidelity-guaranty-
031723.pdf) (“F&G Life Letter”). 

21  Section 6(b)(1) of the Securities Act [15 U.S.C. 77f(b)(1)]. Certain “well-known seasoned issuers” or 
“WKSIs” can use a different registration process than what is described here. See generally Securities 
Offering Reform, Investment Company Act Release No. 26993 (July 19, 2005) [70 FR 44722 (Aug. 3, 
2005)] (“Offering Reform Release”). None of the insurance companies offering RILAs are WKSIs, 
however, and we generally do not anticipate that RILA issuers will meet the conditions to operate as a 
WKSI. We therefore do not generally discuss the WKSI registration process in this release. Even if a RILA 
issuer were to qualify as a WKSI, the Securities Act rules that provide a streamlined offering process for 
WKSIs generally would be inapplicable to RILA offerings on Form N-4, as proposed. For example, 
although a WKSI can file an automatic shelf registration statement, this would not be applicable under the 
proposal because Form N-4 does not permit a shelf registration statement and an automatic shelf 
registration statement must be filed on Forms S-3, F-3, or N-2. See rule 405 (definition of “automatic shelf 
registration statement”). As another example, WKSIs are permitted to use the “pay-as-you-go” method of 
paying securities registration fees, but the registration fees for RILA offerings would be paid annually in 
arrears under the proposal. See 17 CFR 230.456(b). 

22  Section 10(a)(3) of the Securities Act provides that when a prospectus is used more than nine months after 
the effective date of the registration statement, the information contained therein shall be as of a date not 
more than sixteen months prior to such use. 15 U.S.C. 77j. 



18 

the registration statement by filing a post-effective amendment which must be declared effective, 

typically by the staff acting pursuant to delegated authority.23  

If the offering is registered on Form S-3, the insurance company’s annual report on Form 

10-K containing audited financial statements will operate as a post-effective amendment to the 

registration statement for purposes of section 10(a)(3).24 The insurance company is required to 

provide a complete set of its financial statements, certain schedules, and executive compensation 

disclosures in a structured data format using Inline XRBL, but is not otherwise required to 

provide other information in the registration statement as structured data.25 Insurance companies 

offering RILAs also are not required to deliver prospectuses to investors because they can rely 

on the Commission’s “access equals delivery” framework in rule 172, although in practice we 

understand that insurance companies typically deliver prospectuses to accompany or precede 

other communications. 

When an insurance company registers a variable annuity separate account on Form N-4, 

in contrast, it pays registration fees based on the net issuance of securities, no later than 90 days 

after each fiscal year end.26 The insurance company can update its registration statement to 

include updated financial information required by section 10(a)(3) by filing an immediately 

effective post-effective amendment under rule 485. These provisions together are designed to 

allow insurance companies to efficiently conduct continuous offerings of variable annuities. The 

 

23  See Section 8(c) of the Securities Act [15 U.S.C. 77h(c)] and 17 CFR 230.462 (“rule 462”). 
24  An issuer filing a registration statement on Form S-3 will incorporate by reference information in reports 

under the Exchange Act filed after the registration statement has become effective, including the issuer’s 
annual report on Form 10-K. Accordingly, certain information required to be included in the prospectus 
may be included directly in the prospectus or included in an Exchange Act report that is incorporated by 
reference into the prospectus.  

25  See rule 405(b) of Regulation S-T. 
26  See 17 CFR 270.24f-2 (“rule 24f-2”). 



19 

insurance company also must structure certain key information in Inline XBRL to enhance the 

utility of that information to investors and must deliver a prospectus to investors because the 

“access equals delivery” framework in rule 172 is not available for variable annuities. 

C. Evidence of Investor Views and Areas of Potential Confusion 

Consistent with the RILA Act, the Commission received feedback on individuals’ 

comprehension and views on RILA disclosure through investor testing. Specifically, we received 

feedback through qualitative investor testing interviews, as well as quantitative testing designed 

to assess whether the design of certain hypothetical RILA disclosure provided to participants 

affects their comprehension of the disclosed information. Each of these aspects of investor 

testing was designed by the Commission’s Office of the Investor Advocate (“OIAD”). As 

described in more detail in section II.B below, this feedback helped us to identify areas of Form 

N-4 that we propose to amend to help ensure that a RILA purchaser receives key information 

that the purchaser is able to understand. 

OIAD conducted two rounds of qualitative interviews with a mix of investors across 

demographic characteristics, locations, and levels of financial literacy who either already owned 

annuities or had expressed interest in investing in an annuity product.27 These interviews aimed 

to generate hypotheses about certain content areas in RILA disclosure—specifically, disclosure 

that could appear in select rows of the “Key Information Table” (or “KIT”) in RILA registration 

statements, as discussed below—that may cause confusion and lead to impediments to investor 

 

27  OIAD’s qualitative testing consisted of two rounds of in-depth hour-long interviews with twenty 
participants, using a semi-structured, open-ended format so that participants could express their reactions 
and beliefs, regardless of whether they are accurate, in order to assess the reasoning of a sampling of 
investors regarding RILA products, and their reactions to potential RILA disclosures. See OIAD Report at 
Section 5, Qualitative Testing, Methods. 



20 

understanding of key information.28 These interviews concentrated on assessing: (1) potential 

RILA disclosure, focusing on a hypothetical KIT, for areas of confusion or misunderstanding; 

and (2) participants’ mental models regarding the way RILA products function, including 

potential benefits, drawbacks, and risks of a RILA investment. The interviews also included 

hypothetical scenarios.29 

Feedback from both rounds of qualitative interviews generally showed that the interview 

participants did not have much, if any, familiarity with RILAs. Furthermore, interviews in both 

rounds illustrated that many participants struggled to understand the details of the RILA contract 

presented in sample KIT disclosure.30  

With regard to the first round specifically, participants indicated significant confusion 

about the features and fees associated with RILAs, and often cited certain specific terminology, 

such as “index option,” “interim value adjustment,” “buffer,” and “investment term,” as 

confusing to them.31 For example, many participants mistakenly conflated “investment term” 

with the length of the entire insurance contract, leading them incorrectly to conclude that they 

could avoid any fees or charges if they liquidated their investment at the end of an initial one-

year investment period.32 Participants often did not appear to understand that there are multiple 

aspects of a typical RILA contract that could negatively affect an investor’s contract value or the 

 

28  OIAD Report at Section 1, Introduction and Executive Summary. 
29  See OIAD Report at Section 5, Qualitative Testing, Methods. 
30  Several participants in Round 2 were “significantly more sophisticated than the average investor,” with 

some having worked in a financial field or had over $1 million in retirement assets, and these participants 
also “struggled to correctly apply the concepts discussed in the KIT.” OIAD Report at Section 5, 
Qualitative Testing, Results from Round 2.  

31  See OIAD Report at Section 5, Qualitative Testing, Results from Round 1. As noted above, supra footnote 
2, to alleviate the confusion generated by “investment term,” we use the term “crediting period” in this 
release and in the proposed amendments to Form N-4.  

32  See, e.g., OIAD Report at Section 5, Qualitative Testing, Results from Round 1.21 

amounts an investor could withdraw from the contract (e.g., the fact that a withdrawal could be 

subject to a surrender charge, interim value adjustment, and tax penalty).33 Some participants 

expressed that a chart or graph would be useful to help them understand certain information 

presented about a RILA contract, such as surrender periods or how the contract’s bounded return 

structure would function.34 Additionally, some participants indicated they would need more 

specific information—besides the information in the hypothetical KIT rows shared with them—

to evaluate the appropriateness of a RILA.35   

While first-round interview participants may not have been able to understand RILA 

features and economic tradeoffs fully after reviewing sample KIT disclosure, some were able to 

identify certain potential drawbacks and explain certain aspects of RILA contracts following 

their review of this sample disclosure. This was demonstrated in participants’ responses to 

sample scenarios, where the interview facilitator presented facts about a hypothetical investor’s 

background, and participants were asked to provide their opinions about whether a RILA 

contract would be an appropriate investment option for those investors and discuss their 

reasoning. For instance, participants in the first-round interviews could generally identify that a 

RILA contract could present particular risks for individuals without a long time horizon.36 On 

the other hand, as noted above, these participants often identified only a single charge or penalty 

 

33  See OIAD at Section 5, Qualitative Testing, Results from Round 1. 
34  OIAD Report at Section 5, Qualitative Testing, Results from Round 1. 
35  OIAD Report at Section 5, Qualitative Testing, Results from Round 1. 
36  OIAD Report at Section 5, Qualitative Testing, Results from Round 1. However, OIAD’s report also notes 

that in the second round of testing, many participants did not understand that RILAs are intended as a 
retirement savings vehicle, and that there may be tax penalties for withdrawal prior to age 59 ½. See id., 
Results from Round 2. Similarly, only 12.6% of participants in the quantitative testing correctly identified 
that RILAs are investing vehicles that are intended purely as retirement savings vehicles. Id., Section 6, 
Quantitative Testing, Results, Summary of Quantitative Testing. 



22 

that would apply even in scenarios where, for example, a surrender charge, early withdrawal tax 

penalty, and interim value adjustment might all apply.37 Some participants were able to identify 

that a RILA contract could be appropriate for an individual in light of factors such as desire to 

protect against losses in the stock market, taking into account considerations such as age, 

investment time horizon, and other sources of liquid funds.38 Some interview participants also 

demonstrated that they could use the KIT disclosure to discern quickly that they would not be 

interested in purchasing a RILA contract, for example because of liquidity needs or relatively 

short investment time horizons.39 

Commission staff used this feedback to update sample KIT disclosure in between 

qualitative interview rounds. In particular, in the second round, sample KITs were modified to 

include: (1) the phrase “investment term” rather than “term,” (2) a table to show how investment 

term interacts with contract length, (3) graphics to provide more information about RILA loss 

limitation features such as floors and buffers, and (4) expanded links to additional information to 

indicate that more information could be available.40 Following these changes, participants 

demonstrated modestly improved comprehension in certain limited areas. For example, the 

sample KIT disclosure used in the second-round of qualitative testing emphasized that contract 

adjustments can substantially reduce the value of an investment if investors withdraw money 

before the end of an investment term. Participants who viewed this modified disclosure had 

greater success in identifying the potential financial impact of this feature, with some expressing 

 

37  OIAD Report at Section 5, Qualitative Testing, Results from Round 1. 
38  OIAD Report at Section 5, Qualitative Testing, Results from Round 1. 
39  OIAD Report at Section 5, Qualitative Testing, Results from Round 1.  
40  See OIAD Report at Section 5, Qualitative Testing, Results from Round 1, and Appendix C. 



23 

concern about the potential magnitude of the contract adjustment.41 Additionally, some second-

round participants who viewed the KIT contract adjustment disclosure also asked for more 

specific information about how the adjustment is calculated, which suggests that layered 

disclosure might be useful for these concepts.42 Even though these participants were unable to 

define certain terms relevant to contract adjustments (e.g., interim value adjustment), most 

second-round participants seemed to understand that RILAs are not a short-term investment and 

should only be used if an investor will not need to make early withdrawals.43  

The second round of testing also introduced a table in the sample KIT disclosure that 

attempted to help illustrate how fees were charged over the surrender period of the contract, the 

difference between the investment term (i.e., the crediting period) and the contract length, and 

how the surrender charge and potential contract adjustments could vary over different time 

frames.44 Nonetheless, participants in the second round of testing still had difficulty 

distinguishing between surrender charges and contract adjustments or understanding that both 

can apply cumulatively to reduce an investor’s contract value in cases of early withdrawal.45 

Most participants in the second round of testing also continued to struggle with the mechanics of 

“buffers,” despite the inclusion of graphics in the hypothetical KITs designed to illustrate how 

buffers work.46 There were a number of areas where participants wanted information that was 

not part of the KIT rows being tested, such as the specific index-linked options available under 

 

41  See OIAD Report at Section 5, Qualitative Testing, Results from Round 2. 
42  See OIAD Report at Section 5, Qualitative Testing, Results from Round 2. 
43  See OIAD Report at Section 5, Qualitative Testing, Results from Round 2. 
44  See OIAD Report at Section 5, Qualitative Testing, Results from Round 1, and Results from Round 2. 
45  See OIAD Report at Section 5, Qualitative Testing, Results from Round 2. 
46  See OIAD Report at Section 5, Qualitative Testing, Results from Round 2. 



24 

the contract, and some participants with more investing experience wanted information about 

past returns on the RILA, as well as additional information on fees and charges—particularly 

regarding caps on gains and other bounded return features—in order to understand the ways in 

which insurance companies profit from RILAs.47  

Following the qualitative interviews, OIAD conducted quantitative testing designed to 

assess comprehension of key concepts about RILAs and the extent to which the organization of 

disclosures affected participants’ comprehension of the disclosed information.48 Approximately 

2,500 participants completed OIAD’s quantitative testing study, which was fielded over an eight-

day period and targeted groups who were more likely to have some experience with financial 

products.49 Participants received focused portions of a hypothetical KIT to test disclosures. For 

example, participants were randomly assigned to one of two formats for the sample KIT 

disclosure, one with a Q&A format and one with a statement-based format.50 Overall, the results 

of OIAD’s quantitative testing suggest that most investors experience challenges in 

understanding RILAs.51 This round of testing reviewed overall comprehension of participants as 

well as whether participants were able to assess four sub-scores: (1) appropriateness of RILAs 

for investors based on their characteristics, (2) how a RILA works, (3) how the charges and 

penalties associated with RILAs affect liquidity, and (4) the insurance protections offered by 

RILAs.52 Across all participants, the average percentage of questions scored correct was 58%, 

 

47  See OIAD Report at Section 5, Qualitative Testing, Results from Round 2. 
48  OIAD Report at Section 6, Quantitative Testing. 
49  OIAD Report at Section 6, Quantitative Testing, Methods. 
50  OIAD Report at Section 6, Quantitative Testing, Study Design and Overview. 
51  OIAD Report at Section 6, Quantitative Testing, Summary of Quantitative Testing. 
52  OIAD Report at Section 6, Quantitative Testing, Comprehension Measures. 



25 

which, while higher than the expected score for people randomly guessing (50%), was lower 

relative to what might be considered a well-informed purchaser of a RILA product.53 However, 

the results of the sub-scores varied, specifically 57% for appropriateness, 49% for how a RILA 

works, 57% for insurance, and 62% for liquidity.54 Comprehension varied depending on the 

particular concept tested. For example, 80.7% of participants were able to correctly identify that 

RILA investors cannot access their money whenever they need it at no cost, suggesting that the 

tested disclosures were sufficient to put participants on notice to the potential for contract 

adjustments and surrender charges.55 Conversely, only 12.6% of participants correctly identified 

that RILAs are intended purely as retirement savings vehicles, rather than a product appropriate 

for other, shorter-term investing goals (e.g., education and home purchasing), suggesting 

continued investor confusion on this topic.56 Additionally, participants in the quantitative testing 

were classified into three groups based on their experience with investing. Not surprisingly, 

increased investment experience correlated with greater overall comprehension, with non-

investors (those with no existing investments) averaging slightly less than 50% correct, 11.7 

percentage points lower than the average for the group with the most investment experience.57 

The Q&A KIT format demonstrated a statistically significant, albeit quantitatively small, 

improvement over the non-Q&A KIT format, particularly with regard to the non-investor group, 

 

53  OIAD Report at Section 6, Quantitative Testing, Results. 
54  OIAD Report at Section 6, Quantitative Testing, Results, Table 6. 
55  OIAD Report at Section 6, Quantitative Testing, Results. 
56  OIAD Report at Section 6, Quantitative Testing, Results. 
57  See OAID Report at Section 6, Quantitative Testing, Results, Subgroup Analysis, Investor Status. 



26 

who saw a 5.7 percentage points increase in comprehension in connection with the Q&A format 

with regard to overall comprehension.58 

Overall, investor testing successfully identified a range of barriers to investor 

understanding of RILAs and associated disclosures. However, with the few exceptions noted 

above, variations in disclosures did not result in significant improvements in investor 

comprehension in the investor testing. Accordingly, while OIAD’s investor testing has been 

successful in identifying specific areas of investor confusion regarding RILAs, those results were 

largely inconclusive in terms of determining specific disclosures that are relatively more 

successful in addressing the identified confusion.  

We have incorporated those results in our design of the proposed Form N-4 amendments, 

endeavoring to give particular attention to areas of identified investor confusion while leveraging 

existing disclosure requirements. Because investor testing did not, for the most part, provide 

persuasive evidence of superior disclosures, we are proposing to largely utilize the existing Form 

N-4 disclosures which have been developed over time, and with which staff, investors, and RILA 

issuers are already familiar. Building upon these existing disclosures has additional benefits, 

because combination contracts offering both variable and index-linked options will be required 

to comply with Form N-4, making it more efficient to build on the form’s requirements for both 

types of investment options. We seek comment throughout this release on specific areas for 

improvement that can aid investor comprehension. Further, we are requesting specific input from 

the retail investor community, through a short Feedback Flyer, relating to their experiences with 

annuities generally and RILAs specifically.59  

 

58  See OIAD Report at Section 6, Quantitative Testing, Results, Subgroup Analysis, Investor Status. 
59  See infra section II.K; Appendix D. 



27 

Further, in addition to investor testing focused specifically on sample RILA disclosure, 

our proposal—and the current disclosure requirements in Form N-4 that we are building upon—

also draw on the Commission’s past investor testing efforts, outreach, and other empirical 

research concerning investors’ preferences. This includes, for example, information about 

summary content and layered disclosure approaches.60 The Commission has historically received 

feedback showing that investors generally prefer concise, layered disclosure.61 Investors 

participating in certain past quantitative and qualitative investor testing initiatives on the 

Commission’s behalf have also expressed preferences for, wherever possible, the use of a 

summary containing key information about an investment product or service written in clear, 

concise, and understandable language and presented in an accessible format.62 Each of these 

sources of evidence of investor preferences, understanding, and behaviors in response to 

disclosures specific to RILAs and other investment products more generally has provided 

important context and support for our proposal’s approach to RILA disclosure.  

 

60  See Updated Disclosure Requirements and Summary Prospectus for Variable Annuity and Variable Life 
Insurance Contracts, Investment Company Act Release No. 33286 (Oct. 30, 2018) [83 FR 61730 (Nov. 30, 
2018)] (VASP Proposing Release) at paragraphs accompanying nn.38-43. 

61  See, e.g., Request for Comment on Fund Retail Investor Experience and Disclosure, Investment Company 
Act Release No. 33113 (June 5, 2018) [83 FR 26891] (June 11, 2018] (“Investor Experience RFC”). 
Feedback in comment letters generally showed that retail investors prefer concise, layered disclosure and 
feel overwhelmed by the volume of information they currently receive. Multiple comment letters reflected 
a preference for shorter summary disclosures, with additional information available online or upon request. 
See, e.g., Comment Letter of C. Scott (July 26, 2018) (expressing preference for shorter summary 
disclosures, and suggesting disclosures “trim the fat and replace the text-heavy disclosures with something 
that is clear, succinct, and transparent”); Comment Letter of Helena Krus (July 29, 2018) (noting a 
preference to receive shorter summary disclosures, with additional information available online or upon 
request, and suggesting that the option should be available for all documents over 5 pages). 

62  See supra footnote 61; see also, e.g., SEC Staff, Study Regarding Financial Literacy Among Investors 
(Aug. 2012). The key information that investors found useful and relevant before purchasing an investment 
product includes information on fees and expenses, investment performance, principal risks, and 
investment objectives. With respect to the presentation of disclosure, the study indicates that investors 
preferred disclosures being “written in clear, concise, understandable language, using bullet points, tables, 
charts, and/or graphs.” Materials relating to this study, including the staff’s report, are available at 
http://www.investor.gov/publications-research-studies/sec-research.  

http://www.investor.gov/publications-research-studies/sec-research


28 

D. Overview of Proposal 

We are proposing to modernize and enhance the registration and disclosure framework 

for RILAs by adapting the existing registration and disclosure framework that is familiar to 

investors and issuers for variable annuity separate accounts to accommodate RILAs.  

• Use of Form N-4. We are proposing to amend Form N-4 so that issuers seeking to 

register the offering of RILAs must use that form. To accommodate this, we are also 

proposing amendments to that form that specifically address the features and risks of 

RILAs. For example, we are proposing amendments to the form’s “Key Information 

Table” that highlight key features of RILAs that should be disclosed so that investors 

may determine whether a RILA is an appropriate investment for them. In particular, the 

KIT highlights key features of a RILA contract that may be substantially different from 

the features of investment products investors may be more familiar with, and that investor 

testing suggests may not be readily apparent to investors. Further, because the insurance 

company would register the offering of a RILA on Form N-4 under the proposal, it would 

be subject to the requirements in the form related to financial statements, including the 

form instruction that currently permits variable annuity issuers to file insurance company 

SAP financial statements in certain circumstances. 

• Form N-4 Amendments for All Issuers. In addition to adding RILAs to Form N-4, we are 

also proposing amendments to the form that would be applicable to offerings of variable 

annuities. These proposed amendments are informed by the staff’s historical experience 

in administering the form and respond to observations from investor testing relevant to 

variable annuity offerings. For example, one takeaway from investor testing was that the 

complicated jargon of RILA contracts was a consistent impediment to investor 



29 

comprehension of KIT disclosures.63 To address this confusion, we are proposing to 

switch the order of the Key Information Table and Overview of the Contract items to 

introduce investors earlier to the terminology and concepts underlying annuity contracts, 

in the hopes that this context will improve investor comprehension of KIT disclosures. 

Because variable annuities are also complicated investment products, we are proposing to 

switch the order for these products as well, so that variable annuity investors also have 

the benefit of this additional context. 

• Summary Prospectus. Consistent with the inclusion of RILAs on Form N-4, we are 

proposing to permit RILA issuers to make use of the summary prospectus framework 

available to variable annuity registrants on Form N-4. 

• Updates to the Filing Rules. To accommodate RILA registrations on Form N-4, we are 

proposing to require RILA issuers to pay fees in arrears on Form 24F-2 and we are 

proposing amendments to address RILAs in the rules that variable annuities use to file 

post-effective amendments and to update prospectuses. 

• Materially Misleading Statements in Sales Literature. The proposed amendments would 

require RILA issuers to comply with rule 156, which provides guidance as to when sales 

literature is materially misleading under the Federal securities laws. 

Our proposal, if adopted, would implement the RILA Act’s mandate. 

II. DISCUSSION 

A. Use of Form N-4 

 

63  See OIAD Report at Section 6, Quantitative Testing, Summary of Quantitative Testing. 



30 

We propose to require insurance companies to use Form N-4 to register the offering of 

RILAs, as well as amendments to the form to require disclosures specific for these securities.64 

As discussed above, the registration forms currently used by RILA issuers do not include line-

item disclosure requirements addressing the unique aspects of RILAs, like limits on gains or the 

application of contract adjustments. They also require information about the issuer, such as 

MD&A, that may be less important to annuity investors, given that they are not making a direct 

investment in the insurance company, and that the Commission has not determined to require for 

variable annuities. Conversely, most variable annuity issuers already use Form N-4 to register 

their securities and the form is designed to provide investors with product-specific information 

about annuity contracts.65 Requiring insurance companies to register RILA offerings on Form N-

4 therefore leverages the form’s existing insurance-product specific disclosure requirements, 

including disclosure requirements that help effectuate the relatively new summary prospectus 

layered disclosure framework the Commission adopted in 2020 for variable contracts. With the 

RILA-specific disclosures we are proposing to add to Form N-4, we intend that the form will 

provide investors with the information necessary to make informed decisions about RILAs.  

Including RILAs on Form N-4 also could provide further benefits to investors by 

facilitating not only investor comparison among RILAs, but also the comparison of index-linked 

options to variable options in the same annuity contract. For example, investors would be able to 

review summary information of all the available investment options of an annuity contract—

 

64  See proposed General Instruction B.1 of Form N-4. Form N-4, as we propose to amend it, would provide 
that Form N-4 is “to be used by insurance companies to register index-linked annuity contracts under the 
Securities Act of 1933.” Insurance companies therefore would not be permitted to register RILA offerings 
on Forms S-1 or S-3, as they do today.  

65  Variable annuities register on Form N-3 if they are issued by separate accounts that are organized as 
management investment companies. However, most variable annuities are issued by separate accounts that 
are organized as unit investment trusts and therefore use Form N-4. See supra footnote 6. 



31 

index-linked options, variable options, and fixed options—and compare these options in one 

place in the prospectus appendix required by Form N-4.66 Currently, we understand that 

approximately 44% of the RILAs offered in the marketplace are offered as index-linked options 

through combination products.67 Registering the offerings of RILAs on Form N-4, rather than a 

new or different form, also would be more efficient for insurance companies and Commission 

staff. In this regard, insurance companies would benefit from using a single form, with tailored 

disclosure requirements, to register the offerings of both RILAs and combination contracts with 

index-linked options. In addition, many of the insurance companies issuing RILAs also issue 

variable annuity contracts and therefore are familiar with the requirements of Form N-4. Using 

Form N-4 for RILAs also would be efficient for our staff because the disclosure requirements for 

variable contracts and RILAs would be consolidated in one place. Further, because Congress has 

authorized RILA issuers to use Form N-4 if the Commission fails to adopt a registration form for 

RILAs within 18 months of the RILA Act’s enactment, we believe that requiring insurance 

companies to use the form is consistent with congressional intent.  

Requiring insurance companies to register RILA offerings on Form N-4 under the 

proposal would result in changes to RILA disclosure, in that they would have to comply with the 

current Form N-4 disclosure requirements in addition to the proposed new RILA-specific 

disclosure requirements. While Form N-4 contains some of the issuer- and offering-specific 

disclosures required by Forms S-1 and S-3, it does not contain them all. Specifically, Form N-4 

does not include many of the disclosures relating to the mechanics of the offering (e.g., use of 

proceeds, dilution, etc.); offering participants other than the issuer, such as selling securities 

 

66  See infra section II.B.3(c). 
67 Based on an informal Commission staff review of RILA filings on the EDGAR system as of May 2, 2023. 



32 

holders; and certain details of the issuer (e.g., descriptions of property, executive compensation, 

etc.). These disclosures may be more useful to an investor considering an investment in the 

capital stock or debt securities of the insurance company rather than an investment in a RILA 

issued by the insurance company. Unlike an investor in the insurance company itself, a RILA 

investor’s direct investment exposure to the insurance company is limited to the insurance 

company’s claims-paying ability, which also is supported by State insurance regulations and 

supervision designed to ensure that insurance companies are able to satisfy their obligations 

under their insurance contracts. Requiring insurance companies to register RILA offerings on 

Form N-4 would leverage that form’s annuity-focused requirements to ensure that investors 

receive those disclosures that would be the most important in the RILA context. 

To accommodate the offering of RILAs on Form N-4 and to provide a consistent 

framework for all offerings registered on the form, we are proposing, as discussed in more detail 

below, changes to certain rules and requirements such that RILA issuers would be subject to the 

same process requirements as variable annuities.68  For example, similar to the current offering 

processes for issuers of variable annuities, insurance companies registering RILA offerings 

would be permitted to use a streamlined summary prospectus and required to pay fees to register 

their securities annually rather than at the time of filing a registration statement.69 These changes 

would provide efficiencies for insurance companies and Commission staff in establishing 

consistent requirements for offerings registered on Form N-4. It would, however, result in some 

trade-offs for RILA issuers. For example, insurance companies currently registering RILA 

offerings on Form S-3 would lose the ability to update their registration statement by 

 

68  See infra sections I.C and II.E. 
69  See also infra section II.E.3 (discussing proposed changes to rule 172). 



33 

incorporating by reference their annual report but would be able to update their registration 

statement annually with an immediately effective amendment. On balance, and as discussed in 

more detail throughout this release, requiring insurance companies registering RILA offerings to 

follow the offering processes proposed in this release should result in efficiencies for insurance 

companies and our staff. We anticipate that requiring RILA offerings to be registered on Form 

N-4 will also benefit investors by leveraging the form’s annuity-specific disclosure requirements 

and extending the variable annuity summary prospectus to RILAs. Having a common 

registration form also should make it easier for investors deciding between an investment in a 

RILA or a variable annuity to compare the offerings. 

We request comment on the proposed requirement to register RILA offerings on Form N-

4. 

1. As proposed, should we require RILA issuers to use Form N-4? Is another existing 

registration form more appropriate for RILAs? If so, which registration form and 

why?  

2. Given that any existing registration form would require RILA-specific 

amendments, should the Commission instead develop a new form specifically for 

RILAs? 

3. Is it appropriate to require an annuity that offers different types of investment 

options (e.g., variable options as well as index-linked options) to address these 

different types of investment options on the same registration form? Would 

requiring different registration forms for annuities offering different types of 

investment options be more or less efficient for insurance companies that offer 

variable annuities, RILAs, and combination contracts?  



34 

4. Is there any information currently required by Forms S-1 or S-3 that we should 

also require RILA issuers to disclose?  

5. Would requiring RILAs to follow the same filing and other process requirements 

as variable annuities (such as requirements for paying registration fees, and the 

ability to use a summary prospectus) be efficient for insurance companies because 

they could use the same processes to pay registration fees and update registration 

statements for variable annuities, RILAs, and combination contracts?  

6. Do commenters believe that there are any disclosures from Forms S-1 and S-3 we 

are not including in the proposed Form N-4, particularly the MD&A and executive 

compensation disclosures, that could be of material relevance to RILA investors? 

If so, please explain their relevance to RILA investors.  

7. Do commenters agree with our estimate that approximately 44% of RILA 

securities offered in the marketplace are offered as index-linked options through 

combination products? If not, what percentage do commenters think more 

accurately reflects RILA securities offered as index-linked options through 

combination products, and what is the basis for this estimate? 

8. Should Form N-4, as amended, be the only form that insurance companies could 

use to register RILA offerings? Should we permit the continued use of Forms S-1 

and S-3 in addition to the amended Form N-4? Would this be appropriate, given 

that RILA issuers can already use those forms? How would we ensure that 

investors receive the information necessary to make informed decisions through 

use of those forms, including the benefit of the proposed RILA-specific disclosure 

requirements informed by investor testing? 



35 

9. Do commenters expect that any RILA issuers will meet the conditions to operate 

as a WKSI, and if so, what is the basis for this expectation? 

10. Do commenters agree that leveraging Form N-4’s annuity specific disclosure 

requirements and summary prospectus regime would benefit investors? Would 

registering RILA offerings on Form N-4 make it easier for RILA investors to 

compare RILA offering with variable annuity offerings? Are there any other 

potential benefits or disadvantages to investors in registering RILA offerings on 

Form N-4 as compared to other forms? 

B. Contents of Form N-4 

As proposed, many items of current Form N-4 would apply to RILAs. We are also 

proposing updates to Form N-4 to include disclosures specific to RILAs. In certain 

circumstances, we propose changing the disclosures provided on the form that would apply to 

both RILAs and variable annuities. The chart in Table 1 below outlines these items and any 

substantive changes we are proposing.70 We discuss these changes in more detail in the sections 

that follow. 

Table 1: Overview of Proposed Form N-4 

Item Description Substantive Changes Discussion 

Prospectus (Part A) 
1 Front and Back Cover 

Pages 
Adding new legends and other 
standardized disclosures applicable to 
all issuers 

Section II.B.1 

2 Overview of the Contract New RILA-specific disclosures; 
moving order of appearance up 

Section II.B.3(a) 

 

70  Some proposed changes entail a non-substantive change such as a change to a defined term or specifying 
that the provision would continue to be applicable only to a registered separate account or variable option. 
These are not flagged in the following table but are instead discussed in section II.B.7 supra. 



36 

Item Description Substantive Changes Discussion 

3 Key Information New RILA-specific disclosures; 
changing to a question-and-answer 
format; moving order of appearance 
down; change discussion of 
restrictions on optional benefits to 
cover all benefits 

Section II.B.2 

4 Fee Table New contract adjustment disclosure. Section II.B.5 
5 Principal Risks of 

Investing in the Contract 
Providing more detailed disclosures 
applicable to all issuers 

Section II.B.4 

6 Description of the 
Insurance Company, 
Registered Separate 
Account, and Investment 
Options 

New RILA-specific disclosures and 
one new item regarding variable 
options 

Section II.B.3(a) 

7 Charges New disclosures related to contract 
adjustments 

Section II.B.5 

8 General Description of 
Contracts 

No substantive change Section II.B.8(b) 

9 Annuity Period No substantive change Section II.B.8(b) 
10 Benefits Available Under 

the Contract 
No substantive change Section II.B.8(b) 

11 Purchases and Contract 
Value 

No substantive change Section II.B.8(b) 

12 Surrenders and 
Withdrawals 

No substantive change Section II.B.8(b) 

13 Loans No substantive change Section II.B.8(b) 
14 Taxes No substantive change Section II.B.8(b) 
15 Legal Proceedings No substantive change Section II.B.8(c) 
16 Financial Statements No substantive change (but see Item 

26) 
Section II.D 

17 Investment Options 
Available Under the 
Contract 

New RILA-specific disclosures Section II.B.3(b) 

Statement of Additional Information (Part B) 
18 Cover Page and Table of 

Contents 
No substantive change Section II.B.8(b) 

19 General Information and 
History 

No substantive change Section II.B.8(c) 

20 Non-Principal Risks of 
Investing in the Contract 

No substantive change Section II.B.8(b) 

21 Services No substantive change Section II.B.8(b) 
22 Purchase of Securities 

Being Offered 
New disclosure of specific contract 
adjustment information 

Section II.B.5 

23 Underwriters No substantive change Section II.B.8(c) 



37 

Item Description Substantive Changes Discussion 

24 Calculation of 
Performance Data 

Clarifying only applies to variable 
options. 

Section II.B.7 

25 Annuity Payments No substantive change Section II.B.8(b) 
26 Financial Statements Providing that RILA issuers can use 

the relevant instructions and adding 
requirements relating to changes in 
and disagreements with accountants 
for RILAs 

Section II.D 

Other Information (Part C) 
27 Exhibits Adding power of attorney for all 

issuers and accountant letters for 
RILA issuers as exhibits 

Section II.B.7(d) 

28 Directors and Officers of 
the Insurance Company 

No substantive change Section II.B.8(c) 

29 Persons Controlled or 
Under Common Control 
with the Insurance 
Company or the 
Registrant 

No substantive change Section II.B.8(c) 

30 Indemnification No substantive change Section II.B.8(c) 
31 Principal Underwriters No substantive change Section II.B.8(c) 
31A Information about 

contracts with Index-
Linked Options 

New disclosure of RILA specific 
information 

Section II.B.6 

32 Location of Accounts 
and Records 

No substantive change Section II.B.7 

33 Management Services No substantive change Section II.B.8(b) 
34 Fee Representation and 

Undertakings 
Adding new RILA undertakings Section II.B.7(d) 

1. Front and Back Cover Pages (Item 1) 

We propose to require RILA issuers to include the information Form N-4 currently 

requires on the front and back cover pages of the prospectus. Currently, issuers are required to 

include on the front and back cover pages basic identifying information about the issuer and the 

contract, information on how to review the document (e.g., what the SAI is and where to find it), 

as well as certain legends, for example, one relating to the ability for an investor to cancel the 



38 

contract within 10 days.71 The table below outlines these existing disclosures that RILAs would 

be required to include if applicable. 

Table 2: Existing Information Required by Item 1 of Form N-4 (with proposed 

adjustments) 

Item 
Number Disclosure Cover 

Identifying Information 
Item 1(a)(2) Insurance company’s name Front 
Item 1(a)(3) Types of contracts offered (e.g., group, individual, etc.) Front 
Item 1(a)(4) Name and class of contract Front 
Item 1(a)(9) Date of prospectus Front 
Item 1(b)(4) EDGAR identifier number Back 

Legends 
Item 
1(a)(10) 

Statement that the Commission has not approved or disapproved of 
the securities or passed upon the accuracy or adequacy of the 
disclosure in the prospectus and that any contrary representation is a 
criminal offense (as required in 17 CFR 230.481(b)(1)). 

Front 

Item 
1(a)(11) 

Statement that additional information about the contract is available 
on Investor.gov. 

Front 

Item 
1(a)(12) 

A legend that states that if you are a new investor, you may cancel 
your contract within 10 days of receiving it with some details about 
the operation of this process. 

Front 

Other Information 
Item 1(b)(1) Statement that the SAI contains additional information, that it is 

available to investors, and how investors may obtain the SAI or 
make inquiries about their contracts. 

Back 

Item 1(b)(2) Statement about whether and from where information is 
incorporated by reference. 

Back 

In addition, we are proposing to add several new disclosures to the cover page to 

accommodate RILAs. The first proposed amendment would require the insurance company to 

 

71  One change specific to this legend would be to indicate whether the insurance company will apply a 
contract adjustment on any money returned during this period. Contract adjustments are a defining element 
of a RILA, but can apply in other circumstances. Nonetheless, given the context of this legend, we believe 
that it is important for investors to know whether they will be subject to this charge if they elect to have 
their money returned. See supra sections II.B.5 (discussing contract adjustments generally) and II.F 
(discussing that it could be materially misleading to advertise that investors can receive their money back 
during a period of time without indicating that a contract adjustment could apply). 



39 

identify the types of investment options offered under the contract and cross-reference the 

prospectus appendix that provides additional information about each option.72 Given the addition 

of investment options beyond variable options to the form, this would help investors better 

understand what investment options are available under the contract.  

The other proposed amendments to the cover page would require additional new 

disclosures that highlight RILAs’ complexities and certain associated risks. These include 

RILA’s limitation on gains and potential for loss, that they are not short-term investments, and 

that payments under the contract are subject to the insurance company’s financial strength and 

claims-paying ability. The proposed legends would require issuers to include statements on the 

front cover disclosing the following: 

(1) The contract is a complex investment and involves risks, including the potential loss 

of principal;  

(2) For contracts that include index-linked options, a prominent statement that the 

insurance company limits the amount the investor can earn, the potential for 

investment loss could be significantly greater than the potential for investment gain, 

an investor could lose a significant amount of money if the index declines in value, 

and a prominent statement disclosing as a percentage the maximum amount of loss 

from negative index performance that an investor could experience after taking into 

account the minimum guaranteed limit on index loss provided under the contract;  

(3) The contract is not a short-term investment and is not appropriate for an investor who 

needs ready access to cash, and withdrawals could result in surrender charges, 

 

72  See proposed Item 1(a)(5) of Form N-4.  



40 

negative contract adjustments, taxes, and tax penalties as applicable with a prominent 

statement of the maximum potential loss resulting from a contract adjustment, if 

applicable; and  

(4) The insurance company’s obligations under the contract are subject to its financial 

strength and claims paying ability.73  

This cover page disclosure is designed to put an investor on notice of these key considerations to 

help the investor make informed decisions.  

While these proposed additional disclosures are important for investors in RILAs, they 

are also relevant in many cases to investors in variable annuities. For example, while RILAs are 

complex investments, variable annuities are complex as well. Variable annuities, like RILAs, 

also are not short-term investments. As a result, we are proposing to apply the proposed new 

disclosures to all Form N-4 issuers to ensure that investors in both RILAs and variable annuities 

receive appropriate disclosures. 

We request comment on the requirement of RILAs to include the information in Item 1 of 

Form N-4 on their registration statement and the inclusion of new legends for all Form N-4 

filers, as applicable, on the front cover of the registration statement. 

11. Would the new legends be effective in helping investors make informed decisions 

with regards to RILAs? Do commenters agree that it is appropriate to require the 

legends for variable annuities? Are the disclosures in the Overview of the Contract, 

Key Information Table, and elsewhere in the prospectus—as discussed later in this 

release—sufficient such that these legends are not necessary? Conversely, are 

 

73  See proposed Item 1(a) of Form N-4.41 

legends effective in alerting investors to key concepts for a RILA or variable 

annuity on the cover page of the prospectus? Are there additional legends that are 

appropriate in light of the complexity of RILAs and variable annuities? For 

example, should a legend be required that specifically discloses a contract’s upside 

limitation, such as due to a participation rate or cap rate?  

12. Are there any examples or illustrations of how RILAs operate that we should 

require on the front or back cover pages? Are examples or illustrations more 

effective communication tools than legends on the cover page of the prospectus? 

Should examples or illustrations be provided in addition to legends? 

13. Is there any other information we should require on the front or back cover pages? 

2. Key Information Table (Item 3) 

RILA issuers, like variable annuities issuers currently, would be required to provide a 

Key Information Table in their registration statements under the proposal. We also are proposing 

amendments to the KIT’s disclosure requirements to address key RILA features, as well as other 

amendments that would apply to all Form N-4 issuers. 

The KIT provides summary prospectus disclosure, including a brief description of key 

facts about a variable annuity in a specific sequence and in a standardized presentation.74 

Specifically, the KIT currently includes a summary of five topic areas: (1) fees and expenses; (2) 

risks; (3) restrictions; (4) taxes; and (5) conflicts of interest. The KIT functions as an integral part 

of the layered disclosure approach in Form N-4 by identifying key considerations upfront, with 

more detail to follow later in the prospectus. The proposed amendments to the KIT, which are 

 

74  See VASP Adopting Release at section II.A.1.c.ii; see also infra section II.C. 



42 

informed by investor testing, are intended to build on this framework and highlight important 

considerations related to RILAs, including certain aspects of RILAs that our investor testing 

observed are difficult for investors to understand and thus require clear disclosure in order to 

help investors make informed investment decisions.75 

Form N-4 currently prescribes format requirements for the KIT to enhance the readability 

and comparability of the disclosure that also would apply to RILA offerings under the 

proposal.76 Specifically, RILA issuers would be required to disclose the required information in 

the tabular presentation reflected in the instructions, in the order specified, without any 

modification or substitution with alternate terminology of the title, headings, and sub-headings 

for the tabular presentation, unless otherwise provided. Consistent with the form’s current 

requirements, RILA issuers, however, would be permitted to exclude any disclosures (other than 

the title, headings, and sub-headings for this tabular presentation) in the KIT that are not 

applicable, or modify any of the statements required to be included, so long as the modified 

statement contains comparable information. RILA issuers also would be required to provide 

cross-references to the location in the statutory prospectus where the subject matter is described 

in greater detail, either accessed by direct electronic link or through equivalent methods or 

technologies, as required for variable annuity KIT disclosure. Consistent with current 

requirements, RILA issuers would include these cross-references adjacent to the relevant 

disclosure, either within the table row, or presented in an additional table column. As currently is 

 

75  See, e.g., OIAD Report at Section 5, Qualitative Testing (following two rounds of in-depth interviews to 
assess potential RILA KIT disclosure for areas of confusion or misunderstanding, qualitative interviews 
suggested confusion with RILA terms and concepts relating to, for example, contract adjustments such as 
interim value adjustments and loss limiting features such as buffers); OIAD Report at Section 6, 
Quantitative Testing, Results, Subgroup Analysis (noting 5.7 percentage point effect of the Q&A KIT 
structure on overall comprehension for “non-investors” during quantitative testing). 

76  See proposed instruction 1 to Item 3 of Form N-4. 



43 

required, all disclosures for the KIT should be short and succinct, consistent with the limitations 

of a tabular presentation. 

We are proposing three modifications that would apply to registration statements both for 

RILAs and for variable annuities. These changes are designed to provide investors with a better 

understanding of these products, and are informed in part by the results of investor testing. First, 

we are proposing to require issuers to present the information in the KIT in a question-and-

answer (“Q&A”) format.77 As a result of this change, the various line items of the KIT would be 

rephrased as questions (e.g., “Are there charges for early withdrawals?” instead of “Charges for 

Early Withdrawals”). The instructions would further require that, unless the context otherwise 

requires, issuers should begin the response with a “Yes” or “No” in bold text when answering a 

question presented in a given row of the KIT. Consistent with the directional results of the 

quantitative investor testing, we anticipate that the Q&A format may improve investor 

comprehension of RILA-specific topics. Because the effect of the Q&A KIT structure on overall 

comprehension was larger for non-investors than independent investors, this format may 

particularly improve comprehension for less-experienced investors.78 We also expect that 

rephrasing the current line items in a Q&A format would more clearly convey the importance of 

 

77  Proposed instruction 1(d) to Item 3 of Form N-4. 
78  For purposes of investor testing, participants were classified into three groups: those with no investments in 

stocks, bonds, mutual funds, or other securities (non-investors); those with investments exclusively in 
retirement savings accounts (retirement only); and those with investments outside of retirement accounts 
(independent investors). See OIAD Report at Section 6, Quantitative Testing, Subgroup Analysis, Investor 
Status. The report noted a 5.7 percentage point effect of the Q&A KIT structure on overall comprehension 
for “non-investors”. Id. 



44 

the KIT information to help RILA and variable annuity investors make informed investment 

decisions.79 

Second, we propose to change the order in which the KIT (current Item 2) appears 

relative to the Overview of the Contract (current Item 3) disclosures.80 The Overview of the 

Contract disclosures provide general information about the contract and important context about 

the information summarized in the KIT. Based on our observations of investor testing, we 

believe RILA investors may generally benefit from more context to understand the KIT 

disclosures. For example, interview participants generally found certain RILA-specific 

terminology confusing, such as “index,” “investment term,” “interim value adjustment,” and 

 

79  The Commission’s proposed Q&A format is consistent with previous rulemaking experience. See Form 
CRS Relationship Summary; Amendments to Form ADV, Investor Act Release No.5247 (June 5, 2019) [84 
FR 33492 (June 12, 2019)] (adopting question-and-answer format in response to feedback from surveys 
and studies and commenters who noted that “the question-and-answer format is a more effective design 
for consumer disclosures because it focuses on questions to which a consumer wants answers and allows a 
consumer to skim quickly and understand where to get more information.”). The proposed format is also 
supported by prior surveys and studies to help design effective disclosures to retail investors. See, e.g., 
Angela A. Hung, et al., RAND Corporation, Investor Testing of Form CRS Relationship Study (2018), 
available at https://www.sec.gov/about/offices/investorad/investor-testing-form-crs-relationship-
summary.pdf, at p. 23 (reporting that about 60% of respondents favored a question-and-answer format over 
the sample relationship summary format presented in the survey); Kleimann Communication Group, Inc., 
Report on Development and Testing of Model Client Relationship Summary, Presented to AARP and 
Certified Financial Planner Board of Standards, Inc. (Dec. 5, 2018), available at 
https://www.sec.gov/comments/s7-07-18/s70718-4729850-176771.pdf , at p. 4 (“Readers ask questions 
when they read, especially of functional documents. . . . For good design, we want to build upon this 
tendency by identifying key questions investors should or are likely to ask and featuring them prominently 
in the text, thus easing the cognitive task for readers. As a result, we used questions in the headings to 
introduce each section’s major topic.”); Susan Kleimann, Making Disclosures Work for Consumers, 
Presentation to the SEC’s Investor Advisory Committee (June 14, 2018), available at 
https://www.sec.gov/spotlight/investor-advisory-committee-2012/iac061418-slides-by-susan-kleimann.pdf 
(encouraging the use of question-and-answer format, the use of headings to make structure clear, and a 
strong design grid to organize elements, among other disclosure design principles, to promote readability), 
cited in VASP Adopting Release at n.112 and accompanying text. See also Office of Investor Education 
and Assistance, U.S. Securities and Exchange Commission, A Plain English Handbook (Aug. 1998) (“You 
can make complex information more understandable by giving your readers an example using one investor. 
This technique explains why ‘question and answer’ formats often succeed when a narrative abstraction 
fails.”). 

80  The current instructions to Form N-4 require that, notwithstanding 17 CFR 230.421(a), the KIT, Overview, 
and Fee Table must be disclosed in numerical order. General instruction C.3(a) of Form N-4. The proposal 
would change this instruction to reflect the change in order. 



45 

“buffer.”81 Further, investor testing indicated that investors had difficulty in understanding the 

basic features and concepts of RILA contracts.82 The proposed Overview of the Contract 

disclosures would require descriptions and examples to help investors understand these RILA 

features and provide a basis for better understanding the issues flagged by the KIT disclosures.83 

Thus, based on investor testing, we propose to change the location of the KIT so that it appears 

after (rather than before) the Overview of the Contract section. Placing the Overview of the 

Contract section first may similarly provide context of the issues flagged in variable annuity 

KITs. 

Third, we propose to delete Form N-4’s general instruction stating that where the 

discussion of information required by the Overview of the Contract (currently Item 3) or KIT 

(currently Item 2) also responds to the disclosure requirements in other items of the prospectus, 

registrants need not include additional disclosure in the prospectus that repeats the information 

disclosed in the Overview of the Contract or the KIT.84 In administering Form N-4, we have 

observed that this instruction has led to confusion on the part of registrants. For example, while 

both the KIT and Item 5 require disclosures about principal risks, the KIT expressly 

contemplates that more detailed information will be repeated later in the prospectus, specifically 

requiring registrants to provide cross-references to the more detailed prospectus discussion.85 

Item 5 requires registrants to summarize the principal risks of the contract in one place, and was 

 

81  See, e.g., OIAD Report at Section 5, Qualitative Testing, Results from Round 1, Summary of Qualitative 
Testing, Section 6, Quantitative Testing, Summary of Quantitative Testing. 

82  See, e.g., OIAD Report at Section 5, Qualitative Testing, Summary of Qualitative Testing, Section 6 and 7 
Quantitative Testing, Summary of Quantitative Testing, Section 7, Conclusions, Summary of Findings. 

83  See, e.g., proposed Item 2(b)(2) of Form N-4. 
84  General Instruction C.3.(a) of Form N-4. 
85  See instruction 1(b) to Item 2 of Form N-4. 



46 

not intended to permit an insurance company to omit principal risks from that section if  those 

risks were also disclosed in the KIT.86 Moreover, the layered disclosure framework requires a 

degree of repetition to ensure both that the KIT contains key disclosures and that the detailed 

sections that follow contain all of the key information about the given topic. We believe this is 

particularly important for RILAs in light of the challenges our investor testing suggests investors 

have in understanding these products. This way, investors will see the key risks regardless of 

whether they review targeted sections of the prospectus.  

The proposed overall format of the KIT is depicted below:  

Table 3: Proposed Key Information Table 

FEES AND EXPENSES 

Are There Charges for Early Withdrawals?  

Are There Transaction Charges?  

Are There Ongoing Fees and Expenses?  

RISKS 

Is There a Risk of Loss From Poor 
Performance? 

 

Is this a Short-Term Investment?  

What are the Risks Associated with the 
Investment Options?  

  

Is There Any Chance the Insurance 
Company Won’t Pay Amounts Due to Me 
Under the Contract?  

 

 

86  See Item 5 of Form N-4; VASP Adopting Release at text following n.689 (“The principal risks section is 
designed to provide a consolidated presentation of principal risks which can be cross-referenced by 
registrants to reduce repetition that might otherwise occur if the same principal risks are repeated in 
different sections of the prospectus.”). 



47 

RESTRICTIONS 

Are There Restrictions on the Investment 
Options?  

 

Are there any Restrictions on Contract 
Benefits?  

 

TAXES 

What are the Contract’s Tax Implications?  

CONFLICTS OF INTEREST 

How are Investment Professionals 
Compensated?  

 

Should I Exchange My Contract?  

 
a) Fees and Expenses 

RILA contracts typically have implicit fees, expenses, and charges for early or mid-term 

withdrawals that can be confusing or surprising to investors, as observed in our investor 

testing.87 We anticipate that investors would benefit from tailored disclosure about certain 

unique features of a RILA contract’s fee and expense structure as described below to help them 

make informed decisions.  

Early Withdrawal Charges. As RILAs may have surrender charges, we propose to 

require RILA issuers to provide the existing KIT surrender charge disclosure in this first line 

item under the “Fees and Expenses” heading so that RILA investors understand how surrender 

charges are assessed (e.g., that if they make a withdrawal within a specified period after their last 

 

87  See, e.g., OIAD Report at Section 5, Qualitative Testing, Results from Round 1, Results from Round 2. 



48 

premium payment, they may pay a significant surrender charge that will reduce the value of their 

investment).88 This disclosure must include the maximum surrender charge, the maximum 

number of years that a surrender charge may be assessed, and an example of the maximum 

surrender charge an investor could pay in dollars based on a $100,000 investment. In a change to 

the current form requirements, we also are proposing to require that offerings of both variable 

annuities and RILAs disclose that this loss will be greater if there is a negative contract 

adjustment, taxes, or tax penalties, to make clear that an investor may lose more than just the 

surrender charge upon an early withdrawal. 

We also are proposing to require specific disclosure on contract adjustments, which can 

result in investor losses if the investor withdraws money from an index-linked option, or 

withdraws money from the RILA entirely before the end of a specified period.89 Specifically, if 

the contract includes contract adjustments, the insurance company would be required to include a 

statement that if all or a portion of account value is removed from an index-linked option or from 

the contract before the expiration of a specified period, the insurance company will apply a 

contract adjustment, which may be negative. Similar to the disclosures relating to surrender 

charges, this statement would include the maximum potential loss (as a percentage of the 

investment) resulting from a negative adjustment (e.g., “[y]ou could lose up to XX% of your 

investment due to the contract adjustment”). The insurance company also would be required to 

provide an example of the maximum negative adjustment that could be applied (in dollars) 

 

88  Proposed instruction 2(a) to Item 3 of Form N-4. 
89  As noted above, contract adjustments include adjustments made when amounts are removed prematurely 

from an index-linked option, often referred to as interim value adjustments, as well as adjustments made 
when amounts are removed prematurely from the contract, often referred to as market value adjustments. 
Thus, a specified period would include index-linked option crediting periods (which again, are typically 
referred to by insurance companies as “investment terms” or “terms”), as well as any specified period 
relating to a market value adjustment.  



49 

assuming a $100,000 investment (e.g., “[i]f you allocate $100,000 to an investment option with a 

3-year crediting period and later withdraw the entire amount before the 3 years have ended, you 

could lose up to $90,000 of your investment. This loss will be greater if you also have to pay a 

surrender charge, taxes, and tax penalties.”). We also propose to require the insurance company 

to provide a brief narrative description of the contract transactions subject to a contract 

adjustment (e.g., withdrawals, surrender, annuitization, etc.) as part of the response to this item 

to make clear to investors the range of transactions that could result in a contract adjustment. 

Transaction Charges. The second line item in the “Fees and Expenses” section of the 

proposed amended KIT, “Are there transaction charges?,” would require registrants to disclose 

that the investor may also be charged for other transactions in addition to surrender charges (and 

now contract adjustments), along with a brief narrative description of the types of such charges 

(e.g., front loads, charges for transferring cash value between investment options, etc.).90 This 

line item is designed to provide a simple narrative description to alert investors that surrender 

charges and contract adjustments are not the only transaction charges they could pay. We are 

proposing to require RILA issuers to provide this disclosure. 

Ongoing Fees and Expenses. The third line item in the “Fees and Expenses” section, 

“Are there ongoing fees and expenses?,” is designed to alert investors that they also will bear 

recurring fees on an annual basis. This item currently requires the insurance company to disclose 

(1) a minimum and maximum annual fee table and (2) a lowest and highest annual cost table, 

both along with applicable legends.91 The minimum and maximum annual fee table is designed 

 

90  Proposed instruction 2(b) to Item 3 of Form N-4. 
91  See instruction 2(c) to Item 2 of Form N-4. The minimum and maximum annual fee table requires a tabular 

description of the fees and expenses that an investor may pay each year, depending on the investment 
options chosen. This includes minimum and maximum percentages for: base contract fees; portfolio 
 



50 

to consolidate the more detailed information in the Fee Table that appears later in the prospectus, 

in order to minimize the need for investors to perform complex calculations to understand the 

fees they will pay.92 The lowest and highest annual cost table is designed to provide investors 

with a high-level cost illustration that will give investors a tool to understand the basic cost 

framework of the contract.93 We are proposing to require RILA issuers to provide this 

disclosure.94 

We also are proposing to require that where a contract imposes limits on gains on the 

amount an investor can earn on an index-linked option, insurance companies disclose that they 

impose these limits on gains and that they serve as an implicit ongoing fee.95 In other words, as a 

result of limits on gains imposed under a contract, an investor is sacrificing the potential for 

investment gains that exceed the cap or other limit on upside performance. Specifically, 

insurance companies would prominently state that they impose an implicit ongoing fee on index-

linked options by limiting, through the use of a cap, participation rate, or some other rate or 

measure, the amount an investor can earn on an index-linked option. Further, insurance 

companies would state that imposing this limit helps the insurance company make a profit on the 

index-linked option, and that, in return for accepting this limit on index gains, an investor will 

receive some protection from index losses. This disclosure would be required to precede the 

 

company fees and expenses; and optional benefits available for an additional charge. The lowest and 
highest annual cost table requires a tabular description of the lowest and highest cost an investor could pay 
each year, based on current charges and a set of standardized assumptions (e.g., $100,000 investment and 
5% annual appreciation).   

92 See VASP Adopting Release at section II.A.1.c.ii.(i), n.144 and accompanying text; see also Item 4 of 
Form N-4. 

93 See VASP Adopting Release at section II.A.1.c.ii.(i), n.147 and accompanying text. 
94  See proposed instruction 2(c) to Item 3 of Form N-4.  
95  See proposed instruction 2(c)(i)(G) to Item 3 of Form N-4. 



51 

minimum and maximum annual fee table. If the contract offers an index-linked option subject to 

limits on gains but does not impose any explicit ongoing fees or expenses under the contract, and 

thus there would be no need to include the minimum and maximum annual fee and lowest and 

highest cost tables, the insurance company would include this disclosure in lieu of such tables.96 

Where there are no explicit ongoing fees, minimum and maximum annual fee and cost tables 

showing zero fees could mislead investors because an index-linked option imposing limits on 

gains has implicit fees inherent in limiting upside index participation. 

Lastly in this line item, we propose to revise the last sentence in the required legend in 

the lowest and highest annual cost table to include the underlined language: “This estimate 

assumes that you do not take withdrawals from the Contract, which could add surrender 

charges and negative Contract Adjustments that substantially increase costs.”97 This would 

further alert investors to the cost impact of a contract adjustment if they withdraw money early. 

b) Risks  

Risk of Loss. Under the first line item in the amended KIT under the heading “Risks,” “Is 

there a risk of loss from poor performance?,” we would, as required by an existing instruction in 

the form, require RILA issuers to state that an investor can lose money by investing in the 

contract. RILAs, like variable annuities, are subject to the risk of investment loss. We also are 

proposing to amend this instruction to provide that, if an annuity contract offers an index-linked 

option, the insurance company must disclose, as a percentage, the maximum amount of loss an 

investor could experience from negative index performance, after taking into account the 

 

96  Proposed instruction 2(c)(iii) to Item 3 of Form N-4. 
97  See proposed Instruction 2(c)(ii)(A) to Item 3 of Form N-4. Currently, this legend only refers to surrender 

charges, not negative contract adjustments. 



52 

minimum guaranteed limit on index loss provided under the contract.98 For example, with a 

guaranteed buffer of -10%, a registrant would disclose that investors could lose up to 90% of 

their investment in an index-linked option due to poor index performance even with the loss 

limitation feature. This amendment is designed to make clear to investors investing in an index-

linked option that they can still lose money even though index-linked options typically include 

features designed to limit investment loss. 

Short-Term Investment. The second line item under the Risks heading, “Is this a short-

term investment?,” currently requires a statement that the contract is not a short-term investment 

and is not appropriate for an investor who needs ready access to cash along with a brief 

explanation. This statement and an accompanying brief explanation is equally applicable to 

RILAs and we therefore would require RILA issuers to make the same disclosure.99 We also are 

proposing to amend this item to require issuers of RILAs and variable annuities to state that (1) 

amounts withdrawn from the contract may result in surrender charges, taxes, and tax penalties; 

and (2) if applicable, that amounts removed from an index-linked option or the contract before a 

specified period may also result in a negative contract adjustment and loss of positive index 

performance. These disclosures are designed to make clear to investors some of the key reasons 

why these investments are not short-term investments. These disclosures are particularly 

important for an investor considering a RILA in light of the potential negative consequences if 

the investor withdraws money early from a particular index-linked option or the contract. We are 

not limiting these disclosures to contracts with index-linked options, however, because these 

disclosures may be equally material for a variable annuity. To further illustrate that index-linked 

 

98  See proposed Instruction 3(a) to Item 3 of Form N-4. 
99  See proposed instruction 3(b) to Item 3 of Form N-4. 



53 

options are not short-term investments even though they may have a short crediting period, we 

also propose new risk disclosure for index-linked options that would require issuers offering 

such investment options to state that contract value will be reallocated at the end of the crediting 

period according to the investor’s instructions, and to disclose the default reallocation in the 

absence of such instructions. 

Risks Associated with Investment Options. The third line item under the Risk heading, 

“What are the risks associated with the investment options?,” is intended to focus on the general 

risk of poor investment performance.100 Currently, the KIT therefore requires the insurance 

company to state that: (1) an investment in the contract is subject to the risk of poor investment 

performance and can vary depending on the performance of the investment options available 

under the contract; (2) each investment option will have unique risks; and (3) the investor should 

review these investment options before making an investment decision. We are proposing 

conforming changes to the required statement to refer to index-linked options now that RILAs 

are included on Form N-4.101 

We also are proposing to require the insurance company to provide additional 

information about any index-linked options offered under the contract to highlight how the 

insurance company limits the investor’s participation in gains and losses of the index. For the 

risk of limited upside, the insurance company would be required to (1) state that the cap, 

participation rate, or some other rate or measure, as applicable, will limit positive index returns 

(e.g., limited upside), (2) provide an example for each type of limit imposed under the contract 

(e.g., if the index return is 12% and the cap rate is 4%, the insurance company will credit the 

 

100  VASP Adopting Release at the text accompanying n.170. 
101  See proposed instruction 3(c) to Item 3 of Form N-4. 



54 

investor 4% in interest at the end of the term), and (3) prominently state that this may result in 

the investor earning less than the index’s return.102  

For the risk of limited protection in the case of market decline, the insurance company 

would be required to (1) state that the floor, buffer, or some other rate or measure, as applicable, 

will limit negative index returns (e.g., limited protection in the case of market decline), (2) 

provide an example for each type of limit imposed under the contract (e.g., “if the Index return is 

-25% and the buffer rate is -10%, we will credit -15% (the amount that exceeds the buffer rate) at 

the end of the crediting period”), and (3) prominently state that even after limiting a negative 

index return, investors could still lose up to XX% of their investment.103 The disclosure in this 

row of the KIT is designed to highlight that each investment option, including an index-linked 

option, will have unique risks. The proposed disclosure on index-linked options would highlight 

one of the central economic tradeoffs index-linked options present: that an investor will sacrifice 

the potential for returns if the index goes up in exchange for some protection from loss if the 

index goes down.  

Insurance Company Risks. The fourth line item under the Risk heading, “Is there any 

chance the insurance company won’t pay amounts due to me under the contract?,” is meant to 

alert investors that any obligations, guarantees, or benefits under the contract that may be subject 

to the claims-paying ability of the insurance company will depend on the financial solvency of 

the insurance company.104 Form N-4 therefore currently requires the insurance company to 

 

102  See proposed instruction 3(c)(A) to Item 3 of Form N-4. 
103  See proposed instruction 3(c)(B) to Item 3 of Form N-4. 
104  See VASP Adopting Release at section II.A.1.c.ii.(ii); see also proposed Instruction 3(d) to Item 2 of Form 

N-4 (“State that an investment in the Contract is subject to the risks related to the Insurance Company, 
including that any obligations (including under any Fixed Options and Index-Linked Options), guarantees, 
or benefits are subject to the claims-paying ability of the Insurance Company.”).  



55 

include a statement to this effect in this row of the KIT and either to provide the insurance 

company’s financial strength ratings or state, if applicable, that they are available upon request. 

We propose to require a RILA issuer to provide the same statement, with a conforming change to 

include index-linked options as an obligation of the insurance company.105  

c) Restrictions 

Investments. We propose to require RILA issuers to include the disclosure required by the 

first line item under the heading “Restrictions,” “Are there limits on the Investment Options?” 

This current item would be modified to require the insurance company to state whether there are 

any restrictions that may limit the investment options that an investor may choose, as well as any 

limitations on the transfer of contract value among investment options.106 As these limitations 

can exist for RILAs, we propose to require RILA issuers to make this disclosure so that investors 

can assess that disclosure in determining whether the RILA is an appropriate investment for 

them. 

Currently, the form also generally requires the insurance company to state that it reserves 

the right to remove or substitute portfolio companies as investment options, if applicable. 

Insurance companies typically reserve the right to change the index-linked options that are 

available under a contract as well as key features of available index-linked options. To alert 

investors that the available index-linked options and key terms of those index-linked options may 

 

105  See proposed instruction 3(d); see also infra section II.B.7(b) (discussing changes of Form N-4’s defined 
terms, including replacing “depositor” with “insurance company,” to facilitate inclusion of RILAs on the 
form). 

106  See proposed instruction 4(a) to Item 3 of Form N-4. The current item requires the insurance company to 
state whether there are any restrictions that may limit the investments that an investor may choose, as well 
as any limitations on the transfer of contract value among portfolio companies. Consistent with the 
corresponding changes made to defined terms, we would also clarify that this item applies to any 
investment option, not just the portfolio companies available as investment options under a variable option. 
See infra section II.B.7. 



56 

change in the future we are proposing to require the insurance company to state any reservation 

of its rights under the contract, including, if applicable, the right to (1) add or remove index-

linked options, (2) change the features of an index-linked option from one crediting period to the 

next, including the changes to the index and the current limits on gains and limits on index losses 

(subject to contractual minimum guarantees), and (3) substitute the index of an index-linked 

option during its crediting period. We are also proposing to require that insurance companies 

disclose any right to stop accepting additional purchase payments, which may be significant to 

investors given the impact this reservation can have on investors’ ability to accumulate contract 

value for retirement, grow the death benefit, and increase optional benefit values. 

Contract Benefits. The second line item under “Restrictions,” “Are there any restrictions 

on contract benefits?” requires a statement about whether there are any restrictions or limitations 

relating to benefits offered under the contract, and/or whether a benefit may be modified or 

terminated by the insurance company. It also requires a statement that withdrawals that exceed 

limits specified by the terms of a contract benefit may affect the availability of the benefit by 

reducing the benefit by an amount greater than the value withdrawn and/or could terminate the 

benefit. We are proposing that this item be broadened to include disclosure on restrictions or 

limitations relating to any benefit under the contract, not just optional benefits (as currently 

required). While a benefit under the contract might be characterized as standard, it could have 

restrictions that should be disclosed in the KIT because of the benefit’s importance to the 

investor’s rights under the contract, such as a proportionate withdrawal calculation under a 



57 

standard death benefit.107 We propose to require RILA issuers to include this disclosure, as such 

disclosure is equally applicable to RILAs as it is to variable annuities. 

d) Taxes 

We also propose to require RILA issuers to include the line item under the heading 

“Taxes,” “What are the Contract’s tax implications?”108 This line item is designed to alert 

investors to the tax implications of variable contracts and, as we propose to amend this item, of 

RILAs. It currently requires a statement that an investor should consult with a tax professional to 

determine the tax implications of an investment in, and purchase payments received under, the 

contract. The insurance company must also state that there is no additional tax benefit to the 

investor if the contract is purchased through a tax-qualified plan or individual retirement account 

(“IRA”), and that withdrawals will be subject to ordinary income tax and may be subject to tax 

penalties. We propose to subject RILAs to this requirement because the same tax considerations 

apply. 

e) Conflicts of Interest 

Investment Professional Compensation. We propose to require RILA issuers to include 

the first line item under the heading “Conflicts of Interest,” “How are investment professionals 

compensated?”109 This current line item for variable contracts is designed to alert investors to the 

existence of compensation arrangements for investment professionals and the potential conflicts 

of interest arising from these arrangements.110 It requires issuers to disclose that an investment 

 

107  See proposed instruction 4(b) to Item 3 of Form N-4. Similarly, we are proposing a change to the 
discussion in the overview of the contract item about contract features that would broaden that discussion 
to cover both optional and standard contract benefits. See proposed Item 2(c) of Form N-4. 

108  See proposed instruction 5 to Item 3 of Form N-4. 
109  See proposed instruction 6(a) to Item 3 of Form N-4. 
110 See VASP Adopting Release at section II.A.1.c.ii.(v). 



58 

professional may be paid for selling the contract to investors. An issuer must describe the basis 

upon which such compensation is typically paid (e.g., commissions, revenue sharing, 

compensation from affiliates and third parties). An issuer providing the required disclosure also 

must state that investment professionals may have a financial incentive to offer or recommend 

the contract over another investment. The same compensation arrangements and potential 

conflicts are relevant for RILAs, and we therefore are proposing to require an insurance 

company registering a RILA to provide the same disclosure. 

Exchanges. We propose to require RILA issuers to include the second line item under the 

heading “Conflicts of Interest,” “Should I exchange my Contract?,” with conforming changes.111 

This current line item for variable contracts is designed to alert investors to potential conflicts of 

interest that may arise from contract sales that stem from exchanges.112 It requires issuers to state 

that some investment professionals may have a financial incentive to offer a new contract in 

place of the one owned by the investor. An issuer must further state that investors should only 

exchange their contract if they determine, after comparing the features, fees, and risks of both 

contracts, that it is preferable to purchase the new contract rather than continue to own the 

existing contract. These same considerations apply to an investor considering an exchange 

involving a RILA. In a change that would apply to variable annuities and RILAs, and to put 

investors on notice that there may also be costs or charges associated with terminating an 

existing contract, we are also proposing that issuers disclose in this legend that investors should 

consider any fees or penalties to terminate the existing contract in considering whether to 

exchange a contract.  

 

111  See proposed instruction 6(b) to Item 3 of Form N-4; see also infra section II.B.7. 
112 See VASP Adopting Release at section II.A.1.c.ii.(v).  



59 

f) Requests for Comment on Key Information Table 

We request comment generally on the proposed amendments to the KIT, and specifically 

on the following issues. 

14. Should we require all issuers to provide the “Overview of the Contract” disclosure 

before the KIT, as proposed? Would this provide relevant context for an investor 

to help understand the KIT disclosure or, conversely, would it detract from the 

KIT’s efficacy in conveying key information about the contract up front in a 

consistent format? Are there other reasons to precede the KIT disclosure with the 

current “Overview of the Contract” disclosure? Alternatively, should we allow 

issuers to maintain the current order of disclosure and include new rows in the KIT 

to provide contract overview disclosure to investors? Would this be a more 

effective way to provide context for investor to understand the KIT, or would it 

lead to disclosure that is too lengthy for the KIT format and potentially duplicate 

disclosure in the Overview of the Contract section of the prospectus? 

Alternatively, should we require the Overview of the Contract to precede the KIT 

only in prospectuses offering annuity contracts with index-linked options, rather 

than for all issuers? 

15. Should we add disclosure to the KIT regarding whether index-linked options 

offered under the contract are based on a price return index (i.e., an index that only 

reflects price movements of the security) or a total return index (i.e., one that 

includes additionally factors like dividends), so that, where appropriate, investors 

understand whether or not they can expect their account value to increase as a 

result of dividends?  



60 

16. Should we add any additional headings and sub-headings to the KIT, for example, 

a new heading “Contract Overview,” with related line items or sub-headings 

“What is the purpose of the contract?,” “What is the time period for measuring 

growth (or loss) on my contract value?,” and/or “Who may the contract be 

appropriate for?”? Would this information be helpful to an investor in providing 

context for the KIT disclosure or, conversely, would these requirements lead to 

lengthy disclosure that makes the KIT less investor friendly?  

17. Would rephrasing the topics of the KIT line items in a question format and 

requiring the descriptions in the right-hand column of the KIT to be presented in 

an answer format, as proposed, be helpful for investors making an initial purchase 

of an annuity contract? Should we make the Q&A format mandatory for all issuers 

that use Form N-4? Or should we instead require that issuers state the line items in 

the left-hand column as brief descriptions of the topics to be detailed in the right-

hand column of the KIT, as is currently required? Should any of the required line 

items or sub-headings be worded in a different way, or using different 

terminology, than the proposal would require?  

18. Should we allow issuers to change the wording of the line item questions in 

circumstances where the changes would not impede investor comprehension and 

clear, consistent disclosure? Could this undermine standardized disclosures and 

investors’ ability to make comparisons of certain disclosure topics among RILA 

and variable annuity prospectuses, or would issuers’ ability to customize the 

disclosure lead to more informed investor decisions about that particular RILA?61 

19. Should we require issuers to add a new column in the KIT labeled “Location in the 

Prospectus” or similar caption, and place it next to the relevant disclosure 

presented in the table to provide hyperlinked cross-references directly to the 

location in the statutory prospectus where the investor can find more detailed 

information about the subject matter or should we, as proposed, continue to permit 

issuers to provide cross-references either within the table row or presented as an 

additional column? Are there any particular sub-headings or captions that would 

help investors identify where to find information?  

20. Should we mandate particular examples or illustrations in the KIT? For example, 

should we require a chart of historical index performance with the guaranteed 

minimum cap overlaid? Should we require a table showing examples of the dollar 

amounts of losses and gains, without fees, an investor would face in a variable 

annuity as compared to RILAs with various floors, buffers, and caps over a four-

year period assuming various index movements?113 Are there other useful 

examples or illustrations currently provided by RILAs that help to illustrate their 

structure effectively to investors that we should include in the KIT? For example, 

should we require a graphic in the KIT to illustrate surrender charges and contract 

adjustments during different time periods of the contract? If so, what should the 

requirements for these graphics or illustrations be? Should we require illustrations 

in the KIT showing how caps, floors, and/or buffers could affect an investor’s 

returns across different market scenarios? If so, what should these scenarios be? As 

 

113  See N.Y. Comp. Codes R. & Regs. tit. 11, App. 28.8 (2023). 



62 

another example, we request comment below on requiring insurance companies to 

disclose the difference between a hypothetical $100,000 investment in an index-

linked option and the value, or the cost to assemble, the economic components 

underlying the index-linked option.114 Should that disclosure be required in the 

KIT?  

21.  We have proposed that insurance companies include disclosures in the KIT 

regarding any limits on gains the RILA imposes, including an illustrative example 

demonstrating the operation of those limits. Would this disclosure be improved by 

requiring that the example conform to any specific parameters? Would other 

examples be helpful? For example, should we require that the example use the 

most common limit on gains offered under the RILA for the previous year? Should 

we require that the example disclose the amount of gains an investor would have 

given up due to the limit over the prior ten years, based on the index’s performance 

during that time and assuming the limit on gains discussed in the example applied 

during each of those ten years?  Should we require that the example use only round 

numbers? 

22. Should we allow or require issuers to provide cross-references to charts or other 

graphics designed to facilitate investor understanding of RILAs, including, e.g., 

educational resources designed by the Commission staff? Should we require 

issuers to provide these hyperlinked cross-references in the current right-hand 

column of the KIT directly after the relevant sentence of disclosure? Would the 

 

114  See Section II.B.3.b. 



63 

KIT be more succinct and easier to read if the hyperlinked cross-references were 

placed on the cover page of the prospectus instead of the KIT? Would requiring 

the registrant to state “More information can be found at:” before or after these 

cross-references help investors easily find the information they may need to make 

an informed investment decision? Should we require cross-references to other 

prospectus sections to include a specific page number in the prospectus where an 

investor could find the information? 

23. Besides hyperlinks, are there other technological tools that would help an investor 

find information that is cross-referenced in the KIT or on the cover page of the 

prospectus, such as QR codes or other technological tools? 

24. Is the level of detail of the disclosure that we propose in each line item of the KIT 

appropriate? Does it strike the right balance between providing enough 

information to alert an investor to the most salient facts (including ongoing 

implicit fees, expenses, risks, and conflicts) of the RILA contract, but not too 

much, or too detailed information? If not, how should we modify the table and/or 

the instructions? Are there other key features of RILA contracts that RILA issuers 

should disclose in the KIT to help investors make an informed investment 

decision? 

25. RILAs are frequently marketed as a way to protect against investment losses 

through loss-limiting features such as buffers and floors. Should we require RILA 

issuers to provide more detailed disclosures about how these loss-limiting features 

have affected RILA investors historically? For example, would investors be better 

positioned to make informed decisions if we were to require RILA issuers to 



64 

disclose: (a) the total number of investor crediting periods (across all investors and 

index-linked options) that utilized a loss-limiting feature for a certain historical 

period (e.g., the past five years); (b) the percentage of those investor crediting 

periods where an investor’s contract value benefited from a loss-limiting feature 

(because the feature eliminated or reduced a negative credit resulting from the 

performance of the index-linked option); and (c) the percentage of those investor 

crediting periods where an investor’s contract value was not impacted by a loss-

limiting feature. Should a RILA issuer have experience with a certain minimum 

number of crediting periods in order to be subject to this disclosure? What should a 

RILA issuer disclose if their experience with loss-limiting features does not meet 

the minimum threshold? Where in the prospectus would be the appropriate 

location for this information? For example, if we require this disclosure, do 

commenters feel it would be best positioned as part of the KIT, in Item 6 (in the 

Limits on Index Losses section), or in the Contract Overview? Are there other 

disclosures that commenters would recommend in the alternative as a way to 

increase investor knowledge about the utility of loss-limiting features and their 

ability to positively affect investors’ contract values? Whether or not we require 

more detailed disclosures about the historical effects of loss-limiting features, 

should we require similar disclosure about the historical effects of limits on gains 

(i.e., upper limits on an investor’s ability to participate in an index-linked option’s 

upside performance)? Should we require disclosure comparing the economic 

effects of the limits on gains to the limits on losses? For example, should we 

require disclosure of the number of periods in which each limit would have 



65 

actually limited an investor’s losses or capped an investor’s gains? Should we 

require disclosure of the dollar value of losses an investor would be protected 

against compared to gains an investor would give up over a prescribed period of 

time, such as the past 10 years? 

26. Are there any particular legends that should be included in the KIT, e.g., “We will 

not return your money at the end of the crediting period unless you tell us to,” 

“The contract adjustment applies in addition to any surrender charge,” “You may 

earn less than the index’s return,” and/or “You may lose up to [X]% of your 

investment if you withdraw your money before the end of a crediting period. This 

loss can be greater if there is a surrender charge, taxes, and/or tax penalties”? If so, 

what legends and why? 

27. Is the process of what happens at the end of the crediting period adequately 

highlighted in the proposed KIT? Should insurance companies be required to 

provide more specific details, either in the KIT or elsewhere in the prospectus, 

about how investors can choose an investment option at the end of the crediting 

period and the limitations on those choices? 

28. Would the disclosure that a RILA issuer would provide in response to the proposed 

“Fees and Expenses” line items convey the appropriate amount of information to 

investors and concisely alert investors to the most important fees, charges, 

penalties, and expenses associated with the RILA contract?  

29. Should the proposed “Fees and Expenses” line item, “Are there charges for early 

withdrawals?,” include disclosure both about the surrender charges and contract 

adjustments, as proposed? Would this disclosure sufficiently alert investors to the 



66 

typical contract adjustment of a contract and its impact in reducing contract value 

(in addition to any surrender charge) if the investor withdraws money before the 

expiration of a specified period? Alternatively, should we sub-divide this line item 

into two line items, with the one focused on surrender charges and the other titled 

(for example) “Are there penalties for mid-term withdrawals?,” focused on 

contract adjustments? Would this help an investor to understand both concepts 

better? Or would sub-dividing the line item cause confusion, for example by 

making it seem as if a surrender charge and a contract adjustment could not apply 

simultaneously? If so, should we require an explicit disclosure that they could 

apply simultaneously? 

30. Would the Minimum and Maximum Annual Fee and Lowest and Highest Cost 

tables assist investors in understanding the costs of their investment and help them 

compare the costs of different investment options and optional benefits in the 

RILA context? Should we modify the proposed disclosure or require other 

additional information to accompany the tables? 

31. Would the proposed disclosure that an issuer would provide about contracts that do 

not impose ongoing fees and expenses adequately convey the implicit ongoing fees 

of contracts with index-linked options that have features that limit positive index 

return? If not, should we modify the proposed disclosure or require additional 

information from issuers? 

32. Would the disclosure that a RILA issuer would provide in response to the proposed 

“Risks” line items adequately convey an overview of the risks of investing in a 

contract with an index-linked option? Are there other risks of investing in these 



67 

contracts that we should require a registrant to disclose in the proposed KIT? For 

example, should we require RILA issuers to state that an investor can lose money 

by investing in these contracts including a loss of principal? Alternatively, should 

we require all issuers to state this, not just RILA issuers?  

33. Would the disclosure that a RILA issuer would provide in response to the proposed 

“Restrictions” line items convey the appropriate amount of information about 

certain restrictions that various contract options may entail, in light of the goals of 

the proposed KIT and the unique nature of a RILA? Should an issuer be required 

to disclose information about restrictions in the KIT other than those associated 

with the contract’s investment options and benefits? If so, what? Instead, should 

we provide flexibility by permitting issuers to disclose other restrictions at their 

discretion? Do commenters agree that our proposal to require disclosure about 

restrictions on contract benefits generally (as opposed to the current requirement 

which is limited to optional benefits) is appropriate? 

34. Is the disclosure that a RILA issuer (along with other issuers that use Form N-4) 

would be required to provide in response to the proposed “Taxes” line item 

appropriate, in light of the goals of the proposed KIT? Given that some investors in 

these products may not have the means or ability to consult a tax professional, 

should we require additional disclosures in addition to the required statement that 

investors should consult a tax professional? For example, should a RILA issuer be 

required to consider which tax consequences are most likely be faced by retail 

investors and to provide general information regarding those consequences? For 

example, should an issuer be required to emphasize more prominently that 



68 

withdrawals will be subject to ordinary income tax, and not the capital gains rates? 

Should the line item require disclosure of the specific tax penalties and 

requirements that investors in annuity contracts may incur (e.g., penalties for 

withdrawal before age 59½, or that purchases through a tax-qualified plan may be 

subject to required minimum distribution each year beginning at age 70½)? 

35. Are the disclosures that a RILA issuer (along with other issuers that use Form N-4) 

would be required to provide in response to the proposed “Conflicts of Interest” 

line items appropriate, in light of the goals of the proposed KIT? Would these 

disclosures adequately apprise investors of the potential conflicts that arise when 

their investment professional is compensated for recommending an investment into 

a new, or an exchange from, an existing RILA contract or variable annuity 

contract? Should we revise these proposed disclosure requirements, and if so, 

how?  

36. Do the instructions associated with each of the proposed line items clearly explain 

what an issuer would be required to disclose? In keeping with the structured format 

of a tabular presentation, we sought to promote concise disclosure by largely 

directing issuers to state, rather than to explain, certain information in response to 

the required line items. Should the instructions prescribe specific language or 

should issuers have flexibility in drafting their responses? Are there any particular 

instructions that we should include or modify in any way, for clarity or for any 

other reason? 

37. Should we require particular terms in the KIT (e.g., those that are defined in a 

related glossary or list of definitions that the insurance company chooses to 



69 

include) to be formatted in a way that will emphasize them, or indicate that they 

are defined elsewhere in the prospectus, for example by using bold and/or italic 

font? 

38. Should we apply the structural changes we are proposing to the KIT in other 

variable insurance contract registration forms, that is, Forms N-3 and N-6? The 

principles we outlined above regarding the potential efficacy of these changes 

could be just as applicable in the context of those forms as in the context of Form 

N-4. For example, should we apply the proposed requirements for Forms N-3 and 

N-6 issuers to present all disclosures in the KIT in a Q&A format and to begin 

each response with a “yes” or “no” in bold text when answering a question 

presented in a given row of the KIT, unless the context otherwise requires? 

Similarly, should we require in those forms that issuers include in their required 

legends on contract exchanges that investors consider any fees or penalties to 

terminate the existing contract before exchanging their contracts?  

3. Principal Disclosure Regarding RILAs (Items 2, 6, and 17) 

We are proposing amendments to Form N-4 to provide investors with the principal 

disclosures regarding RILAs and the index-linked options available under the contract in three 

items of the form. First, investors would receive a concise description of the basic information 

about any index-linked option available under the contract as well as any contract adjustments in 

Item 2 (Overview of the Contract), which, as discussed above, would appear before the KIT.115 

Second, investors would be provided with detailed information about the index-linked options 

 

115  Because we propose to require the KIT to appear before the Overview of the Contract, current Item 3 
(Overview of the Contract) would be renumbered as Item 2. 



70 

available under the contract in Item 6 (Description of the Insurance Company, Registered 

Separate Account, and Investment Options). Lastly, investors would be provided with a 

summary information table, with legends highlighting risks, that outlines the available index-

linked options in Item 17 (Investment Options Available Under the Contract). These 

amendments build on the existing disclosure requirements in each item to help ensure that 

investors have key information about the annuity contract and available investment options, 

regardless of whether the contract is a variable annuity, a RILA, or combination contract offering 

both variable and index-linked options. 

a) Overview of the Contract (Item 2) 

We are proposing to amend Item 2 (Overview of the Contract) to include information 

about RILAs generally and require the insurance company to provide an overview of certain key 

elements of any index-linked options offered under the contract and to highlight any contract 

adjustments. This item is designed to describe certain basic and introductory information about 

the contract and its benefits.116 It currently requires a concise description of the contract. This 

description must include information about (1) the contract’s purpose (e.g., to help the investor 

accumulate assets through an investment portfolio), (2) the phases of the contract (the 

accumulation (savings) and annuity (income) phases) including a discussion of the investment 

options available under the contract, and (3) the primary features of the contract (such as death 

benefits).  

We would require insurance companies to provide this existing disclosure when 

registering RILA offerings, adjusted to account for the specifics of RILAs, because it is equally 

 

116  See VASP Adopting Release at text accompanying n.207. 



71 

relevant for these types of annuity contracts. In particular, in addition to the general information 

about the contract already required by Form N-4, the following information would be required 

with respect to any index-linked option offered under the contract: 

• A statement that the insurance company will credit positive or negative interest at 

the end of a crediting period to amounts allocated to an index-linked option based, 

in part, on the performance of the index; 

• A statement that an investor could lose a significant amount of money if the index 

declines in value and prominent disclosure of the maximum amount of loss (as a 

percentage) an investor could experience from negative index performance, after 

taking into account the minimum guaranteed limit on index loss provided under 

the contract; and 

• An explanation that the insurance company limits the negative or positive index 

returns used in calculating interest credited to an index-linked option at the end of 

its crediting period, accompanied by a brief description of the manner in which 

such returns may be limited, along with an example and disclosure of the 

minimum limit on index losses guaranteed for the life of the contract for any 

index-linked option.117 

We also are proposing to require the insurance company to state, if applicable, that an 

investor could lose a significant amount of money due to the contract adjustment if amounts are 

removed from an index-linked option or from the contract prior to the end of a specified 

period.118 The issuer would also provide a brief description of the transactions subject to a 

 

117  See proposed Item 2(b)(2)(i) through(iv) of Form N-4. 
118  See proposed Item 2(d) of Form N-4. 



72 

contract adjustment. We would require a prominent statement, as a percentage, of the maximum 

amount of loss an investor could experience from a negative contract adjustment and that this 

loss could be greater due to surrender charges and tax consequences. 

These disclosures, together, are designed to highlight upfront some of the key elements of 

a RILA. The required disclosure about any index-linked option offered under the contract would 

highlight for investors the key features of these investment options in general: that returns are 

based in part on an index, that investors could still lose a significant amount of money under the 

contract, and that there are limits on both positive and negative index performance. The required 

disclosure on contract adjustments would highlight a separate but important consideration for an 

investor considering investing in a RILA: that in addition to any losses from poor index 

performance, the investor also can lose a significant amount of money if the investor takes 

money out of an index-linked option or the contract early. These disclosures collectively also 

would provide context for the KIT, which immediately follows this item under the proposal, as 

well as context for more detailed disclosures that would appear elsewhere in the prospectus. 

In addition to these items that are specific to RILAs, we also are proposing to expand the 

current requirements for disclosures regarding optional benefits in Form N-4. Currently, when 

summarizing a contract’s primary features, the form requires a discussion of any optional 

benefits.119 A benefit under the contract, such as a non-optional guaranteed living benefit, might 

be characterized as a standard (i.e., not optional) benefit but nonetheless be a key feature of the 

contract that should be highlighted for investors in the overview section of the prospectus. We 

are therefore proposing to require that the discussion of benefits cover all of the primary contract 

 

119  See current Item 3(c) of Form N-4. 



73 

benefits, not just optional benefits.120 This requirement would apply to all contracts registered on 

the form. 

We request comment on the proposed summary disclosures contained in Item 2. 

39. Is the proposed information on index-linked options and contract adjustments 

appropriate? Is there other or different information we should require? For 

example, we are proposing to require RILA issuers to include examples of how 

limits on gains and downside protection operate but do not mandate a form of 

presentation. Should we require these examples be provided in a graphical 

presentation, or require only a narrative example? Should we require the examples 

be converted into a dollar amount? Would investors understand the examples more 

readily if we did this? As another example, should we require RILA issuers to 

briefly summarize the index crediting methodologies available under the contract?  

40. Should we require the proposed disclosures for index-linked options and contract 

adjustments in Item 2, including the existing disclosure to be provided in the 

context of a RILA? Is this information necessary for investors to understand the 

other disclosures in the prospectus? 

41. Should we, as proposed, broaden the current discussion of the primary contract 

features to include a discussion of contract benefits generally, not just optional 

benefits (the current focus of the disclosure requirement)? 

b) Description of Insurance Company, Registered Separate 

Account, and Investment Options (Item 6) 

 

120  See proposed Item 2(c) of Form N-4; see also supra footnote 107 and accompanying text. 



74 

We propose to amend Item 6 of Form N-4 to modify certain existing disclosure 

requirements and to expand the item to include new disclosures for RILAs. Proposed Item 6(d), 

discussed further below, would set forth most of the substantive new disclosure requirements for 

contracts that include index-linked options. We would also include new disclosures for any fixed 

options provided as part of the contract. The information that would be required by the proposed 

amendments is designed to convey key aspects of each index-linked option offered under the 

contract to investors. 

As an initial matter, the proposed amendments to Item 6 would largely retain the existing 

requirement to provide a concise discussion about the insurance company, registered separate 

account, and variable options, subject to certain modifications in nomenclature to implement 

definitional changes and minor restructuring to accommodate the addition of RILAs to the 

form.121 Specifically, these changes would incorporate the proposed changes to certain defined 

terms and revise existing disclosures to clarify the entities that should be associated with certain 

disclosures (e.g., because the insurance company would be obligated to pay all amounts 

promised to investors under the contracts subject to its financial strength and claims-paying 

ability, we would require disclosure about this topic to be framed in terms of the insurance 

company, not the registered separate account, as the requirement is currently worded).122 

We are proposing to require one new disclosure item for contracts that offer variable 

options, which would be similar to a proposed disclosure for index-linked options, discussed 

 

121  See proposed Item 6(a) through (c) of Form N-4. 
122  We also propose to add an instruction requiring the insurance company to indicate whether it is relying 

upon the exemption provided by 17 CFR 240.12h-7 (“rule 12h-7”), consistent with the requirements of that 
rule. See proposed Instruction to Item 6(a) of Form N-4; see also rule 12h-7(f) (requiring issuers of 
securities subject to insurance regulation that rely on the exemption from the duty to file section 13(a) 
reports with respect to securities registered under the Securities Act to provide a statement indicating that 
fact in the relevant prospectus). 



75 

below. Specifically, the prospectus for such contracts would be required to include a statement 

indicating that “contract value allocated to a Variable Option will vary based on the investment 

experience of the corresponding Portfolio Company in which the Variable Option invests,” and 

“there is a risk of loss of the entire amount invested.”123 The risk of loss inherent in a variable 

annuity is currently disclosed in the form’s “Key Information Table,” and we are proposing to 

mandate this disclosure in Item 6 as well to warn that an investor can lose the entire amount 

invested in a variable option. In addition to informing investors about investment risks in a 

variable option generally, where an annuity contract offers both variable and index-linked 

options, this disclosure also would help to explain the different nature of the investment risks 

posed by each kind of investment option. In that case the prospectus would disclose the 

maximum loss associated with the index-linked options while also disclosing that, for the 

variable options, the investor could lose the entire amount invested.  

Description of Index-Linked Options 

We are proposing to require the insurance company to disclose information about the key 

features of the index-linked options currently offered under the contract.124 These proposed 

disclosures are designed to complement other proposed disclosures in the prospectus about 

index-linked options generally by providing investors specific information about each index-

linked option’s features and risks, akin to the information that is currently available to investors 

about variable options in the prospectuses for the mutual funds underlying those options. 

Specifically, the insurance company would be required to describe the index-linked options 

currently offered under the contract as well as information about how interest is calculated and 

 

123  See proposed Item 6(c)(1) of Form N-4. 
124  See proposed Item 6(d) of Form N-4. 



76 

credited for each index-linked option, specifically: (1) limits on index losses; (2) limits on index 

gains; (3) crediting period; (4) crediting methodology and examples; (5) relevant indexes; (6) 

maturity; and (7) other material features of the index-linked option. These disclosures are 

intended in part to address points that investors found to be confusing in investor testing.125 

Further, some investors in the qualitative interviews indicated that they would prefer more 

information about these points relative to the KIT disclosures.126 

Description of the Index-Linked Options Currently Offered 

Under the proposed amendments, RILA issuers would be required to describe the index-

linked options currently offered under the contract, including statements indicating that the 

insurance company will credit positive or negative interest at the end of a crediting period to 

amounts allocated to an index-linked option based, in part, on the performance of the index.127 

To dispel potential investor confusion relating to the reference to an index, we are proposing to 

require RILA issuers to state that an investment in an index-linked option is not an investment in 

the index or in any index fund. 

Other cautionary statements regarding the index-linked options offered would include 

that the potential for investment loss could be significantly greater than the potential for 

investment gain, and that an investor could lose a significant amount of money if the index 

declines in value. To illustrate the potential scope of such a loss, RILA issuers would have to 

prominently state (as a percentage) the maximum amount of loss an investor could experience 

from negative index performance over a crediting period, after taking into account the minimum 

 

125  See OIAD Study at Section 7, Conclusions, Summary of Findings and Discussion. 
126  See OIAD Study at Section 5, Qualitative Testing, Summary of Qualitative Testing. 
127  See proposed Item 6(d)(1) of Form N-4. 



77 

guaranteed limit on index loss provided under the contract. Because index-linked options are 

often marketed as a way to limit investment losses, this disclosure is designed to convey to 

investors that they could still lose a significant amount on an index-linked option, despite having 

a floor or buffer. 

To emphasize the substantial risks associated with an early withdrawal from an index-

linked option, RILA issuers would be required to state that an investor could lose a significant 

amount of money due to the contract adjustment if amounts are removed from an index-linked 

option prior to the end of its crediting period. To further underscore the risk, RILA issuers would 

also prominently state (as a percentage) the maximum amount of loss an investor could 

experience from a negative contract adjustment, and that this loss could be greater due to 

surrender charges and tax consequences.  

To inform investors of the possibility that their investment options could be unilaterally 

changed without action on their part, the insurance company would be required to state, if 

applicable, that it can add or remove index-linked options and change the features of an index-

linked options from one crediting period to the next, including the index and current limits on 

gains and limits on index losses, subject to contractual minimum guarantees. 

Similar to the current requirement for prospectuses for contracts that offer variable 

options, the insurance company would be required to state that certain information regarding the 

features of each currently offered index-linked option is available in an appendix to the 

prospectus,128 and to provide a cross-reference to that appendix. An instruction would permit this 

statement to be modified if needed to conform to the corresponding table in the appendix.129 As 

 

128  See proposed Item 17 of Form N-4. 
129  See infra footnote 164 and accompanying text. 



78 

described further below, the appendix would also be amended to include a table listing the index-

linked options currently available under the contract.130 

How Interest is Calculated and Credited 

To aid investors in making informed investment decisions, we propose to require RILA 

issuers to describe how interest is calculated and credited for each index-linked option.131 As part 

of this description, the insurance company would be required to disclose any limits on index 

losses and/or index gains, the crediting periods available under the contract (e.g., 1, 3, and 6 

years), a description of an index-linked option’s index crediting methodology, information about 

each index, what happens when an index-linked option matures, and any other material features 

associated with index-linked options. We discuss each of these requirements in turn.  

How Interest is Calculated and Credited – Limits on Index Losses and Gains 

We are proposing to require the insurance company to describe, as a primary element of a 

RILA contract, the limits on index losses and gains for each index-linked option.132 In each case, 

and as applicable, the insurance company would be required to state that such limits apply and 

describe how index losses and gains would be limited (for example, through the use of a floor or 

buffer to limit losses, or a cap or participation rate to limit gains). We also are proposing to 

require the insurance company to provide examples to help investors understand how these limits 

work in practice. To illustrate the limits on index losses, the prospectus would include an 

example showing how the limit on index losses could operate to limit a negative return (e.g., if 

the index return is -25% and the buffer is -10%, the insurance company will credit -15% (the 

 

130  See infra at section II.B.3(b) (describing proposed amendments to Item 17 (Portfolio Companies Available 
Under the Contract) to include parallel provisions for RILAs). 

131  See proposed Item 6(d)(2) of Form N-4. 
132  See proposed Item 6(d)(2)(i) and (ii) of Form N-4. 



79 

amount that exceeds the buffer) at the end of the term, meaning the investor’s contract value will 

decrease by 15%). The prospectus similarly would include an example of how the limit on gains 

could operate to limit a positive return (e.g., if the index return is 12% and the cap rate is 4%, the 

insurance company will credit 4% in interest at the end of the term, meaning the investor’s 

contract value will increase by 4%). 

We also propose to require the insurance company to disclose, for each index-linked 

option, current limits on index losses and gains, as well as the minimum limits on losses and 

gains that are guaranteed for the life of the contract.133 The guaranteed minimum limits tend to 

be lower than those currently provided for in the contract but will not change for the life of the 

contract, whereas the actual limits for an index-linked option will vary from crediting period to 

crediting period. However, at no point will these limits be lower than the guaranteed minimums. 

Both pieces of information are important to understanding the potential returns of an index-

linked option because one of the central economic tradeoffs a RILA presents is an investor’s 

consideration of whether to sacrifice potential gains in exchange for protection against potential 

losses. An investor therefore will not only need to consider the guaranteed limits, but also 

understand that the actual limits can vary over the life of the contract.134 We also propose to 

require the insurance company to state that current limits on gains and limits on index losses will 

not change during the index-linked option’s crediting period. This would help investors 

 

133  Proposed Items 6(d)(2)(i)(B) and 6(d)(2)(ii)(B) of Form N-4. 
134  This information about minimum guaranteed index gain limits is also set forth in the appendix, which is 

part of the summary prospectus. See proposed Instruction 7 to Item 17(b); proposed rule 498A(b)(5)(ix). 
We are also proposing to require RILAs to publish online limits on gains. See infra section II.B.3.c. 
Although changes to an index-linked option, including current limits on gains, are material, we recognize 
that these limits in particular can change from time to time. Therefore, insurance companies may update 
current limits on gains using a prospectus supplement filed pursuant to rule 497 under the Securities Act. 
See infra section II.E.2. 



80 

understand that although the current limits on gains and limits on losses—unlike the minimum 

guaranteed limits—can change from crediting period to crediting period, they will not change 

during any given crediting period.  

Because an insurer can generally set rates at its discretion and may take into account a 

number of factors in setting those rates, we are proposing that the insurance company explain 

how it selects rates for limiting index losses and gains to help investors understand how the 

features of a particular index-linked option will impact that option’s risk/return profile. In 

particular, we are proposing to require the insurance company to describe the factors it considers 

in determining the current limits on losses and gains for an index-linked option (e.g., long-term 

interest rates, market volatility, the cost of option contracts supporting the index-linked option 

guarantees, etc.),135 and how that choice may impact other features of the option set by the 

insurance company.  

Giving investors information about the factors the insurer considers in determining 

current limits—which are key features of an index-linked option—may help manage their 

expectations regarding how the product operates. If an investor sees that last year’s cap on an 

index-linked option was 22% and this year the cap is 17%, the proposed disclosure may help 

them understand why the insurer’s rates have changed.136 If an insurer discloses that it takes 

various specified factors into consideration, but ultimately sets rates at its own discretion, the 

investor should know that as well.  

 

135  Similar disclosure has been required in other contexts. See, e.g., Item 9(a) of Form N-4 (requiring 
disclosure of material factors that determine the level of annuity benefits); see also Instruction 2 to Item 
7(a) of Form N-6 (requiring the identification of factors that determine the applicable cost of insurance 
rate). 

136  For example, an insurer might disclose that caps and participation rates may vary depending on factors such 
as market volatility, hedging strategies and investment performance, the investor’s index effective date, or 
interest rates, among others.81 

The proposed disclosure about how the current limits on index gains or losses may 

impact other aspects of the index-linked option is designed to explain the inverse relationship 

between various features of the index-linked option. For example, the insurance company could 

include an explanation regarding how the limit on index losses for an index-linked option could 

impact the current limit on index gains. This could help an investor understand, for example, that 

if the insurance company determines to increase the extent to which the index-linked option will 

protect against loss, the insurance company may then reduce the amount of upside index 

participation the investor could receive. The prospectus would also require an explanation of the 

factors an investor should consider regarding limits on index losses or gains before selecting an 

index-linked option for investment. This disclosure should assist an investor in choosing among 

the index-linked options available under the contract, such as by explaining the difference 

between a floor and a buffer, or by highlighting index-linked options with features that assume 

more risk in return for higher potential return, or vice versa. 

How Interest is Calculated and Credited – Crediting Period 

We are proposing to require the insurance company to generally describe the crediting 

periods of the index-linked options available under the contract (e.g., 1, 3, and 6 years), along 

with the factors an investor should consider regarding different crediting period lengths before 

selecting an index-linked option.137 An example of one such factor an insurance company could 

include as part of this disclosure would be that crediting periods introduce timing risk that forces 

investors to take losses at the end of a crediting period, and shorter crediting periods might 

 

137  See proposed Item 6(d)(2)(iii) of Form N-4. 



82 

increase this risk.138 The insurance company also would be required to prominently state that 

amounts must remain in an index-linked option until the end of its crediting period to be credited 

with all or partial interest, as applicable, and to avoid a possible contract adjustment in addition 

to potential surrender charges and tax consequences. This discussion would also include a 

description of the transactions subject to a contract adjustment (e.g., living benefits), with 

appropriate cross-references to related disclosures in the prospectus. These disclosures 

collectively are designed to help an investor make an informed investment decision when 

selecting an index-linked option, taking into account that withdrawing money before the end of 

the applicable crediting period can have adverse consequences.  

How Interest is Calculated and Credited – Methodology and Examples 

Each index-linked option has an “index crediting methodology” that explains how 

interest is calculated and credited to the contract. For example, one index crediting methodology 

is “point-to-point,” that is, the amount credited to the contract is based upon a comparison of the 

index’s performance at two points in time (such as at the beginning and end of the crediting 

period). We- propose to require insurance companies to explain the index crediting 

methodologies used in the index-linked options available under the RILA contract, along with 

numerical examples about how these methodologies work. We further propose to require 

insurance companies to provide a bar chart that illustrates the annual total return of each index 

 

138  See OIAD Report at Section 2, RILAs: Structure of Contracts and Investment Options, Investment Terms 
(“The role of [crediting periods] also creates a situation that may be unique for RILA purchasers relative to 
other investments they hold. In particular, RILA investors periodically realize gains or losses at the end of 
each [crediting period]. In contrast, a mutual fund investor (for example) could wait to sell the fund during 
down markets, avoiding realizing those losses. Thus, the [crediting period] feature adds a ’timing risk‘ for 
RILA investors relative to certain other investments.”). 



83 

along with hypothetical examples of index return after applying standardized limitations on 

index gains and losses. 

Specifically, insurance companies would be required to describe, for each index crediting 

methodology,139 how interest is calculated and credited at the end of a crediting period based on 

the interest crediting formula or performance measure.140 Form N-4, as we propose to amend it, 

would provide examples of common crediting methods that the insurance company would 

describe if applicable, such as point-to-point, step-up calculations, and enhanced performance.141 

To help investors understand how these crediting methods work, we also are proposing to require 

the insurance company to include a numeric example to illustrate the mechanics of each index 

crediting methodology.142 The examples would be required to show, in a clear, concise, and 

understandable manner, how each crediting method functions when the index has positive 

returns as well as negative returns to help investors understand how the crediting method 

functions in both circumstances. 

Specifically, we would require numeric examples that reflect a positive return above the 

limit on index gains, and a negative return below the limit on index losses for each methodology. 

The examples also would be required to assume hypothetical returns and limits that are 

 

139  We understand that many index-linked options use the same crediting methodology. If all index-linked 
options offered by a RILA contract use the same crediting methodology, the prospectus would only include 
one example of that crediting methodology. If, however, the index-linked options in a RILA contract offer 
more than one crediting method, or if different index-linked options in a RILA contract offer different 
crediting methods, this would affect the number of examples to be provided. The number of examples to be 
provided depends on the number of crediting methodologies, not the number of index-linked options. 

140  See proposed Item 6(d)(2)(iv)(A) of Form N-4. 
141  As noted above, a point-to-point crediting methodology compares the index’s performance at two points in 

time (such as at the beginning and end of the crediting period). Step-up calculations guarantee a given rate 
if the index’s returns are positive, regardless of the index’s actual performance, subject to certain 
conditions. “Enhanced performance” increases a positive index return, such as by offering a participation 
rate of more than 100%. 

142  See proposed Item 6(d)(2)(iv)(C) of Form N-4. 



84 

reasonable based on current and anticipated market conditions and sales of the contract, and to 

reflect any charges subtracted from interest credited to or deducted from contract value in the 

index-linked option to allow investors to understand the impact of these charges on their return. 

Additional examples, charts, graphs, or other presentations would be permitted if they are clear, 

concise, understandable. Any additional presentations that assume hypothetical returns and limits 

also should assume hypothetical returns and limits that are reasonable based on current and 

anticipated market conditions and sales of the contract. We would also require insurance 

companies to include a legend, in the format specified in the form, that (1) these examples 

illustrate how the insurance company calculates and credits interest under each index crediting 

methodology assuming hypothetical index returns and hypothetical limits on index gains and 

losses and (2) the examples assume no withdrawals. 

We also are proposing to require a bar chart for each index available under the currently-

offered index-linked options showing the index’s annual return for the last 10 calendar years (or 

for the life of the index, if less than 10 years), with the corresponding numerical performance 

adjacent to each bar.143 Further, insurance companies would be required to provide a 

hypothetical example alongside each index return that reflects the return after applying a 5% cap 

and a -10% buffer. If there are no caps or buffers offered under the contract (if, for example, the 

contract includes a floor rather than a buffer), insurance companies would be permitted to reflect 

a rate or measure used to limit index gains or losses under the contract that is comparable. 

Insurance companies would not be permitted to include additional performance presentations, or 

historical index performance that precedes the inception of the index. Further, insurance 

 

143  See proposed Item 6(d)(2)(iv)(B) of Form N-4. 



85 

companies would be required to provide two footnotes to this table, if applicable, that disclose 

(1) that the index return does not reflect dividends paid on the assets in the index, and (2) that the 

index provider deducts fees and costs when calculating index return. 

These bar charts would also be accompanied by the following legend in the format 

specified in the form: 

The bar chart shown below provides the Index’s annual returns for the last 10 
calendar years (or for the life of the Index if less than 10 years), as well as the 
Index returns after applying a hypothetical 5% cap and a hypothetical -10% 
buffer. The chart illustrates the variability of the returns from year to year and 
shows how hypothetical limits on Index gains and losses may affect these 
returns. Past performance is not necessarily an indication of future 
performance. 
 
The performance below is NOT the performance of any Index-Linked Option. 
Your performance under the Contract will differ, perhaps significantly. The 
performance below may reflect a different return calculation, time period, and 
limit on Index gains and losses than the Index-Linked Options, and does not 
reflect Contract fees and charges, including surrender charges and the Contract 
Adjustment, which reduce performance. 

This information is intended to provide context for the index-linked options that the 

RILA contract offers and would better inform an investor when deciding whether to invest in a 

RILA. For example, if an index-linked option provides that the investor will experience at least 

5% of the upside performance of an index, investors may view the tradeoffs of this investment 

differently if the index historically has returned, for example, 10% per year (thus capping gains 

at 5% during those past periods) or 1% per year. Similarly, if an index-linked option offers a -

10% buffer, the investor could compare that against the index performance in the bar chart and 

assess the extent to which the buffer would have provided downside protection against market 

losses in negative return years.  



86 

We appreciate, however, that historical index presentation alone, without the addition of 

hypothetical caps and buffers, may mislead investors into thinking that these historical rates of 

index performance are what investors would have received under the contract if they invested in 

a particular index-linked option. As we discuss in more detail below, we are concerned that 

presenting historical RILA performance without additional context can be potentially misleading 

given that investors cannot access the same RILA terms as were available historically. Relatedly, 

we are concerned that statements in RILA advertisements are being made without sufficient 

context so that investors can understand the qualifications to those statements.144 As an example 

of how historical index performance could confuse investors, consider an investor who has 

selected an index-linked option with performance based on the performance of XYZ Index and a 

one-year crediting period, and this investor has allocated contract value to that index-linked 

option over 10 consecutive crediting periods. This investor’s RILA contract value after 10 years 

likely will differ from the XYZ Index’s 10-year performance. Reasons for this likely difference 

include, for example, that the index-linked option only provides a portion of the performance of 

the index because of a cap rate, buffer, or floor. 

Accordingly, we are proposing to require insurance companies to provide historical index 

information to investors, but with important qualifications so that investors will not confuse this 

index information for the historical performance of the RILA itself. In particular, the overlay of 

hypothetical caps and buffers is designed to help investors understand better how those limits can 

cause RILA performance to differ from that of the index. Further, the legends we are proposing 

 

144  See also infra section II.F. 



87 

also are designed to put investors on notice that the presented performance is not the RILA’s 

performance. 

The proposed bar chart, including the proposed 10-calendar-year period, is modeled on 

the risk/return bar chart in Item 4(b)(2) of Form N-1A. Form N-4 also currently requires variable 

annuity issuers to show 10-years of performance in the portfolio company appendix. We 

preliminarily believe that 10 calendar years is an appropriate time to illustrate the performance of 

the index over the long term to help guide investors. We are proposing to require a 5% cap rate 

and -10% buffer rate to help investors understand how caps and buffers affect the index return, 

but without using values that are so high or so low that they will bear no resemblance to the level 

of gains and losses that is being offered. The illustrative rates are designed to achieve this effect 

because they are higher than typical guaranteed levels of caps and floors, but lower than typical 

currently offered levels. 

How Interest is Calculated and Credited – Indexes 

The index underlying an index-linked option is a central feature of the investment, as the 

investor’s return will be based on the index’s performance, subject to applicable limits on gains 

and losses. We therefore are proposing to require the insurance company to provide for each 

index a brief description of the types of investments that compose the index and where the 

investor can find more information about the index.145 Where there is more than one version of 

an index (for example a total return version and a price return version), the disclosure would 

clearly state which version of the index relates to the index-linked option. If the index is an 

exchange-traded fund (“ETF”), the disclosure would have to clarify whether the index’s 

 

145  See proposed Item 6(d)(2)(v)(A) of Form N-4. 



88 

performance for purposes of determining the amounts credited in the index-linked option is 

based on the ETF’s net asset or closing value and, if the performance is based on the ETF’s share 

price, the impact of using the share price as opposed to total return. These disclosures 

collectively are designed to help ensure that investors understand the applicable indexes. The 

disclosure would also state, if applicable, that the index does not reflect dividends paid on its 

underlying securities, or that the index deducts fees and costs when calculating index 

performance, which will reduce index performance. This is important disclosure because an 

index that does not reflect dividends paid on underlying securities, or that deducts fees and costs, 

will have a lower return, all else equal, than an index that includes dividends and does not deduct 

fees and costs. 

We also propose to require the insurance company to state that it reserves the right to 

substitute an index prior to the end of the crediting period.146 This would put investors on notice 

that the index associated with a particular index-linked option—which is a key driver of the 

investor’s return—could change in the middle of a crediting period. The insurance company also 

would be required to disclose all circumstances that could necessitate a substitution, how the 

insurance company would choose a replacement index, when and how investors would be 

notified of this change, how index return will be calculated at the end of the crediting period, and 

what would happen if a suitable replacement index were not found, including whether the index-

linked option will be discontinued prior to the end of the crediting period. This information 

would allow an investor to better understand the likelihood of the insurance company making a 

substitution and its potential effects.  

 

146  See proposed Item 6(d)(2)(v)(B) of Form N-4. Insurers generally reserve the right to change the index in 
the middle of the crediting period if the index is discontinued or there is a substantial change in the 
calculation of the index. Based on staff experience, such changes are exceedingly rare. 



89 

How Interest is Calculated and Credited – Maturity and Other Material Features 

To help investors anticipate what may happen at the end of an index-linked option’s 

crediting period, the insurance company also would be required to state whether an investor 

would receive advanced notice of a maturing index-linked option, how an investor might provide 

instructions regarding the reallocation of the contract value rate at the end of the crediting period, 

and any automatic default allocation in the absence of such instructions.147 In describing these 

matters, the prospectus must also explain how investors will be informed of the index-linked 

option available for allocation at the end of a crediting period, including any changes to the 

currently-offered index-linked options and the discontinuance or addition of index-linked 

options. 

Finally, we propose to require the insurance company to describe any other material 

aspects of the index-linked option to ensure that any other item not discussed above that could 

affect an investment decision is disclosed.148 This would include disclosure related to limitations 

on transfers to or from index-linked options, rate holds, “bail-out” provisions, start dates, and 

holding accounts.149 We would also require a brief description of how charges may impact the 

index-linked option’s value if applicable as part of this discussion. 

 

147  See proposed Item 6(d)(2)(vi) of Form N-4. 
148  See proposed Item 6(d)(2)(vii) of Form N-4. 
149  A “rate hold” locks in interest at the current cap (or other rate limiting index gains) for the period between 

which the insurance company receives the investor’s annuity application and the time the investor’s 
premium payment is allocated to the index-linked option. A bail-out provision is a contract provision that 
provides if a current cap (or other rate limiting index gains) is set below a specified value, the investor may 
withdraw value from that index-linked option or RILA without a contract adjustment (and in some cases 
without a surrender charge) during a specified period after the start of the crediting period. A holding 
account is typically a conservative investment option (typically a money market fund or a fixed option) 
where amounts allocated to the index-linked option are held until the next index-linked option start date. 
This is used for index-linked options that start on a particular day each month (e.g., the 15th of the month). 



90 

Fixed Options 

In addition to variable options and index-linked options, annuity contracts commonly 

include fixed investment options, such as traditional, unregistered fixed options and unregistered 

index options.150 In the variable annuity context, a fixed option provides an alternative for 

investors who wish to avoid the market risk of investing in a variable option. A fixed option can 

also serve as the holding account for amounts that are pending allocation to a particular 

investment option. In addition, a fixed option may be the default allocation vehicle at the end of 

an index-linked option’s crediting period.  

Form N-4 generally requires registrants to describe the fundamental features and risks of 

an annuity contract, including those, like fixed options, that are distinct from the variable options 

offered through the registered separate account.151 The form also currently requires specific 

disclosure about fixed options in the KIT and the Contract Overview.152 Because we are 

proposing to include disclosures relating to index-linked options in Item 6, we are also proposing 

to require disclosures on this other type of investment option available to annuity contract 

investors so that they have a complete understanding of what they may invest in through that 

contract, either actively, or by default. This approach is designed to increase investor 

 

150  See proposed Item 6(e) of Form N-4. Interests in fixed account options are exempt securities under Section 
3(a)(8) of the Securities Act. 

151  General Instruction C.1.(a) of Form N-4 (stating that “[a] Registrant’s prospectus should clearly disclose 
the fundamental features and risks of the [Contracts], using concise, straightforward, and easy to 
understand language.”). 

152  Items 2 and 3 of Form N-4. 



91 

comprehension by ensuring that substantive information about all of the available investment 

options is presented in the same location in the prospectus. 

The proposed disclosures for fixed options would be similar to those provided for index-

linked options, tailored for the specifics of a fixed option. Specifically, registrants would be 

required to describe the fixed options currently offered under the contract and state that 

information regarding the features of each currently-offered fixed option, including its name, 

term, and minimum guaranteed interest rate is available in an appendix with cross-references.153 

Further, registrants would be required to describe how interest is calculated and when it is 

credited for each fixed option as well as the length of the term and minimum guaranteed interest 

rate (stated as a numeric rate, rather than referring to any minimums permitted under State law). 

As with index-linked options, the registrant also would be required to state whether an investor 

would receive advance notice of a maturing fixed option, including what steps an investor might 

take to provide instructions regarding the reallocation of contract value at the end of the term, 

and any automatic default allocation in the absence of such instructions. In describing these 

matters, the registrant must also explain how investors will be informed of the fixed options 

available for allocation at the end of a term, including any changes to the currently offered fixed 

options and the discontinuance or addition of fixed options. Also as with index-linked options, 

we would require disclosure of any other material aspect of the fixed options, including 

limitations on transfers to or from the fixed options, rate holds, start dates and holding accounts. 

Request for Comment 

 

153  As discussed below, we are also proposing to require disclosure relating to any fixed options currently 
offered under the contract in the Item 17 appendix. 



92 

We request comment generally on the proposed amendments to Item 6 of Form N-4, and 

specifically on the following issues: 

42. Should we require each of the specific disclosures (e.g., disclosures relating to 

limits on index losses and gains, crediting period, etc.) relating to the RILAs and 

index-linked options as proposed? Would all of these proposed amendments 

provide information that would be important to investors? Should we modify or 

expand any of these proposed disclosure requirements? 

43. Should we make any other changes to the required prospectus disclosures 

addressing index-linked options? For example, we are proposing to require 

numeric examples, charts, graphs, or other presentations, as appropriate, to 

illustrate the mechanics of each type of index crediting methodology.154 Would the 

proposed requirement be likely to provide useful information for investors? If not, 

why not? Would the inclusion of such examples, charts, and graphs be likely to 

confuse investors about how index-linked options work? Is there a concern that 

insurance companies would utilize these examples to over-emphasize the benefits 

of RILAs relative to their risks? If so, how could this be remedied? Should such 

examples be included in the prospectus in response to Item 6, or would they be 

better located elsewhere in the prospectus, for example, in Items 3 or 17? Given 

the potential length of such examples, should they be included in an appendix to 

the prospectus?  

 

154  Proposed Item 6(d)(2)(iv) of Form N-4. 



93 

44. Should the current limits on gains and losses be required in the statutory 

prospectus, as proposed? If not, where should such disclosure be located? Should 

insurance companies update current limits on gains as they change from time to 

time by filing a rule 497 prospectus supplement, or should a rule 485 post-effective 

amendment be required?  

45. Should we require the proposed disclosures relating to the risks of investing in 

variable options?  

46. Should we require that the historical performance of indexes be disclosed as 

proposed? Is the proposed bar chart an effective or appropriate presentation 

approach, or should we instead require another presentation approach, such as a 

line graph or the 1-, 5-, and 10 year table required in the Form N-1A? If so, why? 

Are there any concerns that investors would confuse the inclusion of historical 

index information with the performance of the index-linked option itself? If so, are 

our proposed requirements to provide a hypothetical example of a 5% cap and -

10% buffer and a legend sufficient to make clear that the performance illustrated 

by the bar chart does not show or suggest how an investment in the contract will 

perform for the investor? Are the 5% cap and -10% buffer appropriate limits to use 

in the hypothetical examples? Instead of prescribing a specific cap and buffer, 

should we require or permit issuers to include the current and/or guaranteed limits 

as an overlay to the bar chart, or would this provide too much visual clutter for 

investors, or be misleading in any way? Is 10 calendar years of index performance 

the right amount of time to present? 



94 

47. Should we require discussion of fixed investment options currently offered under 

the contract? Are the proposed disclosure items appropriate for these types of 

investment options?  

48. Is there other information we should require insurance companies to disclose to 

help investors better understand the economic tradeoffs associated with an index-

linked option? For example, issuers of structured notes that offer bounded returns 

similar to RILAs disclose the issuer’s valuation of the note, based on the value of 

(1) the embedded derivatives; and (2) a fixed-income bond. This disclosure allows 

investors to understand the difference between the issuer’s valuation and the 

original issue price that they are paying for the structured note. Would a similar 

disclosure for RILAs, provided with respect to each permutation of an index-

linked option, be helpful to investors? Would the difference between a 

hypothetical $100,000 investment in an index-linked option and the value, or the 

cost to assemble, the economic components underlying the index-linked option be 

informative to investors? Would it appropriately reflect the implied cost the 

investor is paying when investing in that index-linked option? If we were to 

require this disclosure, should it be expressed in dollars, as a percentage of a 

hypothetical $100,000 investment, or both? Should we require the insurance 

company to annualize the costs over a stated period of time to express the cost as 

more akin to an annual expense? Recognizing that RILAs are intended to be long-

term investments, what would be an appropriate period of time (e.g., 10, 20, or 30 

years)?  



95 

49. If we were to require insurance companies to provide the disclosure described in 

request for comment 48, should we require the insurance company to compare a 

hypothetical $100,000 investment in the index-linked option to the value, or cost, 

of the following components: derivatives that would provide the index-linked 

option’s investment exposure; a fixed-income component; and the standard 

insurance features offered with the index-linked option?  

50. If we were to require insurance companies to provide the disclosure described in 

request for comment 48, should we require that the insurance company value or 

price the derivatives using exchange-listed derivatives, such as exchange-traded 

options, and based on prices on the exchange, except in cases where exchange-

listed derivatives could not efficiently provide the index-linked option’s 

investment exposure? Would that approach provide for consistent and reliable 

pricing? In practice are insurance companies typically constructing and hedging 

index-linked options’ investment exposure using exchange-listed options or other 

derivatives where feasible?  

51. If we were to require insurance companies to provide the disclosure described in 

request for comment 48, in determining the value of the derivatives underlying an 

index-linked option, should we require insurance companies to use a collection of 

hypothetical index options with an expiration equal to the crediting period, 

consistent with our analysis in section III.B.3?155  

52. If we were to require insurance companies to provide the disclosure described in 

request for comment 48, what calculation would be appropriate for the fixed-

 

155  See infra footnote 429 and accompanying text. 



96 

income component of an index-linked option? Should we, for example, provide 

that the insurance company should use the $100,000 hypothetical investment 

discounted by the rate of interest the insurance company is crediting, or would 

credit, on fixed annuities with a term equal to the duration of the crediting periods 

of the index-linked option? Conversely, should we require the insurance company 

to use the value of a risk-free zero-coupon bond with a time to maturity equal to 

the crediting period of the index-linked option, consistent with our analysis in 

section III.B.3?  

53. If we were to require insurance companies to provide the disclosure described in 

request for comment 48, how should the insurance company value, or determine 

the cost of purchasing separately, the standard insurance features? Do insurance 

companies maintain internal pricing information that could be used for this 

purpose where those features are not offered separately rather than in connection 

with annuities or other financial products sold by the insurance company? Should 

the cost or value of insurance be based on amounts insurance companies are 

required to reserve in connection with those insurance obligations? Should we 

require additional disclosure related to early withdrawal charges, fees, or penalties? 

For example, should we require more prominent placement of these features on 

marketing or other materials, or should we require a comparison of these features 

to potential benefits of the RILA to clarify for investors possible trade-offs? 

54. If we were to require insurance companies to provide the disclosure described in 

request for comment 48, should we, in addition to requiring the disclosure of this 



97 

cost figure, also require the insurance company separately to disclose the costs or 

values associated with each component underlying the index-linked option?  

55. If we were to require insurance companies to provide the disclosure described in 

request for comment 48, where should insurance companies place it in the 

registration statement? Would this information be most helpful to investors if it 

were included in the disclosure required by Item 6, which provides more detailed 

information on each index-linked option, or in the summary prospectus appendix 

identifying the RILA’s investment options? Alternatively, should it be disclosed 

the KIT as a range based on the available index-linked options? If this information 

were in the summary prospectus, would it change frequently and result in a high 

number of prospectus supplements delivered to investors? If we were to further 

require the disclosure of the underlying components and pricing assumptions used 

to determine the cost to investors disclosure, would the SAI be an appropriate 

place for that disclosure? Should these disclosures be structured using inline 

XBRL as proposed for other additional disclosures? 

c) Appendix: Investment Options Available Under the Contract 

(Item 17) 

We propose to amend Item 17 to include a discussion of the index-linked options and 

fixed options available under the contract. This item currently requires a variable annuity issuer 

to include in an appendix to the prospectus a table that consolidates certain summary information 

about each portfolio company offered under the contract. The current appendix is designed to 

provide investors with an overview of variable options available under the contract in a uniform, 

tabular presentation that promotes comparison, because the investment experience of an investor 



98 

in a variable annuity will largely depend on the underlying investments available under the 

contract.156 Similarly, we anticipate that an overview of the index-linked options available to 

investors in a RILA, as well as any fixed option currently available under the contract, would 

help investors understand and compare the various investment options offered under the contract. 

Consolidating this summary information about the contract’s investment options—equivalent to 

what is currently provided for variable options—into a concise, easy to read tabular presentation 

should enhance the ability of investors to understand, evaluate, and compare all the investment 

options available under the contract. 

To reflect the expanded scope of the appendix, we would amend the current heading to 

“Investment Options Available Under the Contract.”157 We would provide a new instruction that 

explains that issuers may modify this new heading as appropriate under the contract. For 

example, if there are only variable options offered under the contract, an issuer could change the 

heading to “Portfolio Companies Available Under the Contract,” consistent with the current 

requirements of the form. Because variable options, fixed options, and index-linked options can 

vary by benefit offered under the contract, we also propose to move the restrictions table 

currently required for variable annuities by instruction 1(f) of Item 17 to be a separate 

requirement for all investment options, with no other changes.158 

Index-Linked Options 

 

156  VASP Adopting Release at n.267 and accompanying text. 
157  “Investment options” are defined as any variable option, index-linked option, or fixed option available 

under the contract. See infra section II.B.7(b). 
158  Proposed Item 17(d) of Form N-4. 



99 

To accommodate the inclusion of index-linked options in the appendix, we propose to 

add a new table titled “Index-Linked Options.”159 As part of our approach to layered disclosure, 

the information to be supplied in the table for index-linked options would summarize certain 

prospectus disclosures required elsewhere in the prospectus.160  

Legends 

Similar to the requirements for variable annuities, the table for index-linked options 

would be prefaced with a legend. Specifically, the legend would state that the table lists index-

linked options currently available under the contract. Further, because insurance companies 

typically change the index-linked options available over time, we would require the legend to 

specify that the insurance company may change the features of the index-linked options in the 

table (including the index and the current limits on gains and limits on losses), offer new index-

linked options, or terminate existing index-linked options, and that the insurance company will 

provide the investor with written notice before making any of these changes. 

As discussed above, current limits on index gains for index-linked options would be 

disclosed in the prospectus in response to Item 6, and changes to current limits on index gains 

would be disclosed in prospectus supplements.161 However, to avoid frequent updates to the 

summary prospectus, insurance companies would not be required to include current limits on 

index gains for index-linked options in the appendix as those limits can change frequently.162 

Instead, and in addition to the disclosure in Item 6, to ensure that investors have convenient 

 

159  See proposed Item 17(b) of Form N-4. 
160  See, e.g., proposed Item 6(d) of Form N-4. 
161  See proposed Item 6(d)(2)(i)(B) of Form N-4 and supra footnote 134. 
162  As discussed below, the proposed appendix would appear in the summary prospectus, but Item 6 would 

not. See infra section II.C; see also infra section II.E.1 (discussing proposal to amend rules 485 and 497 for 
RILAs). 



100 

access to changes in current limits on index gains, which can significantly affect an investor’s 

returns on an index-linked option, the proposed legend would require insurance companies to 

state that current limits on gains are available at a website address.163 This website address must 

be specific enough to lead investors directly to current rates, rather than to the home page or 

other section of the website on which the rates are posted. Requiring RILA issuers separately to 

include information about current limits on gains on their websites would benefit investors by 

making this information easier to find and understand. Furthermore, because websites may be 

updated quickly, website disclosure would be efficient for compiling index-linked options’ 

current limits on gains, given our understanding that these rates can change often and that 

insurance companies currently disclose current rates on their websites. 

Lastly, set off from the rest of the legend and with emphasis, we would require a notation 

that if amounts are withdrawn from an index-linked option before the end of its crediting period, 

the insurance company may apply a contract adjustment and that this may result in a significant 

reduction in the investor’s contract value that could exceed any protection from the index’s loss 

that would be in place if an investor held the option until the end of the term. We are proposing 

this notation given the potential impact on an investor’s returns if amounts are withdrawn prior 

to the end of a crediting period. 

We propose to require the legend to include appropriate cross-references to the section(s) 

of the prospectus that describe the features of the index-linked options as well as the contract 

 

163  Consistent with the current instructions to the form, any website address, including this one, that is included 
in an electronic version of the statutory prospectus would be required to include an active hyperlink or 
other means of facilitating access that leads directly to the relevant website address. However, this 
requirement would not apply to an electronic summary prospectus that is filed on EDGAR. See proposed 
General Instruction C.3.i of Form N-4.101 

adjustment. This approach is designed to help investors that are interested in more detail about 

key aspects of the index-linked options to locate that information quickly. 

Table 

The legend would be followed by a table that lists and highlights key elements of each 

index-linked option available under the contract. Specifically, the table would require, in 

sequential columns, the identification of (1) each index by name; (2) type of index; (3) crediting 

period, indicating the duration of the index-linked option in years; (4) index crediting 

methodology; (5) limits on index loss if held to the end of the crediting period; and (6) 

guaranteed minimum limit on index gain.  

The description of the type of index would be a brief statement of which type of index it 

is (e.g., market index, exchange-traded fund, etc.), or a brief statement describing the assets that 

the index seeks to track (e.g., U.S. large-cap equities). The column indicating the type of index 

crediting methodology used for each index-linked option would only be required if the RILA 

utilizes multiple index crediting methodologies under the contract (e.g., point-to-point, step-up, 

enhanced upside, etc.).164 The disclosures regarding limits on index loss would require an issuer 

to state the current percentage used in the insurance company’s interest credit methodology to 

limit the amount of negative index return credited to the index-linked option and to identify in 

the table whether this limit is a buffer, floor, or some other rate or measure.165 In the last column, 

issuers would be required to state the guaranteed minimum percentage that may be used to limit 

 

164  If all index-linked options offered by a RILA contract used the same crediting methodology, the table 
would not include the column. See, e.g., supra footnote 139. 

165  In contrast to current limits on index gain, we understand that the current limits on index loss typically do 
not change frequently. 



102 

the amount of positive index return credited to the index-linked option and to identify in the table 

whether this limit is a cap, participation rate, or some other rate or measure.166 

To ensure investors only receive disclosure relevant to them, RILAs would only be 

permitted to include in the table those index-linked options that are available under the contract. 

Further, to promote disclosure in a consistent format to facilitate comparisons, issuers would be 

allowed to add, modify, or exclude table headings only as necessary to describe the material 

features of an index-linked option. Insurance companies would also be required to indicate if any 

of the index-linked options are restricted (e.g., because of a “hard” or “soft” close), consistent 

with the current disclosure requirements for variable options. The proposed instructions also 

would state that if an index provider calculates the index’s return in a manner that does not 

reflect the full investment performance of the assets tracked by the index (e.g., the return does 

not reflect dividends paid on the assets composing the index, the return reflects a fee or cost, 

etc.), a footnote to the table must, if applicable, be included stating that the index’s return does 

not reflect the full investment performance of the assets it tracks, which will reduce the index’s 

performance. An investor evaluating index-linked options may be more familiar with a version 

of a given index that reflects the full performance of the index constituents, and this disclosure 

would alert investors that the index associated with a particular index-linked option will have 

relatively lower returns.  

Fixed Options 

Consistent with our proposed approach to the Item 6 disclosure requirements, we are 

proposing to require in the appendix summary information about fixed options currently 

 

166  As discussed above, instead of also requiring a column for current limits on index gains (in addition to the 
column for guaranteed minimum limit on index gains), the legend would state that information about 
current limits on index gains is available at a specified website address. 



103 

available under the contract. These disclosure requirements would be similar to the legend and 

table for index-linked options discussed above, adjusted to reflect fixed option details. The fixed 

option legend, in addition to identifying that what follows is a list of fixed options currently 

available under the contract, would indicate that the insurance company (1) may change the 

features of the fixed options identified, offer new ones, and terminate existing ones and (2) will 

provide the investor written notice before doing so. The fixed option table would include 

columns identifying (1) the name of the fixed option, (2) the term, and (3) the minimum 

guaranteed interest rate.167 Insurance companies would be instructed to include appropriate 

cross-references in the legend to the sections of the prospectus that describe the features of fixed 

options. As with index-linked options, insurance companies could add, modify, or exclude table 

heading only as necessary to describe material features of a fixed option. 

Request for Comment 

We request comment generally on the proposed inclusion of index-linked option 

summary information in the appendix, and specifically on the following issues: 

56. Should we require these new disclosures to be included in the appendix? Are the 

proposed appendix disclosures for index-linked options appropriate? Would they 

help investors to compare information among index-linked options and generally 

understand the index-linked options available? Is this information likely to be 

relevant and useful to investors? Is there more or different information that we 

should require? Should any of the information not be included? For example, 

should we require current limits on gains to be disclosed in the appendix, rather 

 

167  Consistent with the approach in Item 6, the minimum guaranteed interest rate would be required to be 
stated as a numeric rate rather than referring to any minimums permitted under State law. 



104 

than requiring the appendix to include a website address where information about 

current limits is available (as well as requiring this information in the statutory 

prospectus)? Would investors find it useful to have online access to information 

about current limits on gains? Will investors find current limits on index loss in the 

summary prospectus useful even if the current limits on index gains are not 

included? 

57. We are proposing to require in the statutory prospectus numeric examples, charts, 

graphs or other presentations to illustrate the mechanics of each type of index 

crediting methodology.168 Should we permit or require some or all of these 

examples for index-linked options to be included in the appendix? Would the 

inclusion of these examples add undue length or complexity to the appendix, or 

overwhelm the disclosure for other investment options? Could these concerns be 

ameliorated by only permitting or requiring a limited number of examples (e.g., no 

more than 4), or by placing certain other limitations on the inclusion of such 

examples? If so, how? If we were to require examples for index-linked options to 

be included in the appendix, should we also require the examples to be included in 

the Item 6 disclosures, or should such disclosures only be required in a single 

location (and if so, which one)? 

58. Should we include the proposed disclosure in the appendix relating to fixed 

options currently available under the contract? Are there any changes we should 

make to the specific proposed disclosure requirements? 

 

168  Proposed Item 6(d)(2)(iv) (Methodology and Examples) of Form N-4. We are proposing to permit this 
information to be included in an appendix. See supra section II.B.3(a). 



105 

4. Principal Risks of Investing in the Contract (Item 5) 

An investment in a contract offering index-linked options exposes investors to unique 

risks that may be different from those that are common to other investment products, including 

contracts that solely offer variable options. We propose to amend Item 5 to address certain 

principal risks that are particularly relevant to investors in RILAs. In addition to restructuring the 

current item to incorporate the proposed risk disclosure requirements addressing index-linked 

options, we propose certain structural changes that are designed to clarify existing requirements 

but are not anticipated to result in substantively different disclosure requirements for contracts 

offering variable options. These proposed changes also would consolidate certain risk disclosures 

insurance companies currently provide for variable annuities in other sections of the prospectus. 

We are proposing to require these disclosures in a single location to more consistently and 

effectively communicate risks to investors. As the Commission has previously explained, the 

principal risk disclosure in the prospectus is designed to provide a consolidated presentation of 

principal risks, which registrants can cross-reference to reduce repetition that might otherwise 

occur if the same principal risks were repeated in different sections of the prospectus.169 

The principal risk disclosure item of Form N-4 currently consists of a single paragraph 

requiring a registrant to summarize in the prospectus the principal risks of purchasing a contract, 

including the following risks: (1) poor investment performance, (2) that contracts are unsuitable 

as short-term savings vehicles, (3) limitations on access to cash value through withdrawals, and 

(4) the possibility of adverse tax consequences. We propose to retain these substantive risk 

disclosure requirements but would restructure the current single paragraph into separate sub-

 

169  See VASP Adopting Release at n. 690 and accompanying text. 



106 

items while also making certain minor changes designed to clarify existing obligations.170 The 

proposed sub-items are designed to be non-exclusive examples of the principal risks of investing 

in the contract being registered. In addition to existing disclosure requirements, these sub-items 

would also include new risk disclosures specific to index-linked options, as applicable.171 We are 

making parallel changes to the risk disclosures most applicable to variable annuities to avoid any 

implication that risk disclosure should be provided at a different level of detail than the 

disclosures for RILAs. Most contracts offering variable options that are currently registered on 

Form N-4 likely would not need to revise their risk disclosure in response to the proposed 

amendments to the risk disclosure requirements. In our experience, it is common practice for 

these registrants currently to include the disclosures that the proposal would require in their 

prospectuses as principal risk disclosure (or elsewhere in their prospectuses). 

The proposed approach would retain the current requirement for registrants to explain the 

principal risks of purchasing a contract, but would also require an explanation of the principal 

risks of investing in an investment option, including the risks of poor investment performance.172 

Additionally, for index-linked options, a registrant would disclose the maximum potential loss 

from negative index performance over the crediting period, as a percentage. Although 

disclosures that address certain risks of index-linked options would be required in other locations 

in the prospectus, we are proposing that RILA issuers include certain risk factors, such as this 

one, in the consolidated summary of principal risks associated with the contract.173 The 

 

170  See proposed Item 5(a)-(b), (d)-f) of Form N-4. 
171  See proposed Item 5(c) of Form N-4. 
172  See proposed Item 5(a) of Form N-4.  
173  See proposed Item 1(a)(6) (Outside Front Cover Page) (“Prominently disclose as a percentage the 

maximum amount of loss from negative Index performance that an investor could experience after taking 
 



107 

maximum potential loss resulting from negative index performance is a salient way to quantify 

potential returns for particular investment options. For example, absent this disclosure, it may not 

be apparent to investors that an index-linked option that offers a -10% buffer still has the 

potential for 90% loss.174 This statement would help investors assess the particular risks 

associated with RILAs in the context of the other required principal risk disclosures. The 

potential risk of loss is particularly important for investors to understand because RILAs are 

often presented to investors as having the benefit of offering a balance between the opportunity 

for growth and the reduced risk of loss relative to savings alone or more conservative 

investments.175 

The next proposed sub-item, which concerns the risks of early withdrawal, would retain 

the current requirement for registrants to disclose that contracts are unsuitable as short-term 

savings vehicles and to summarize the limitations on access to cash value through withdrawals, 

including the possibility of adverse tax consequences.176 We propose to expand this disclosure 

requirement to specify that a summary of the limitations on access to cash value through 

 

into account the minimum guaranteed limit on Index loss provided under the Contract.”); proposed Item 
2(b)(ii) (Overview of the Contract) (“[P]rominently state as a percentage the maximum amount of loss an 
investor could experience from negative Index performance, after taking into account the minimum 
guaranteed limit on Index loss provided under the Contract.”); proposed Item 6(d)(1)(ii) (Investment 
Options) (“Prominently state as a percentage the maximum amount of loss an investor could experience 
from negative Index performance, after taking into account the minimum guaranteed limit on Index loss 
provided under the Contract.”). 

174  We recognize that this example may suggest to some investors that an option with a buffer is riskier than 
one with a floor. In fact, the protection offered by a buffer is more likely to be triggered than the protection 
offered by a floor. In general, a buffer protects the investor from experiencing smaller, more common 
losses on an index (as well a portion of any larger loses), while a floor protects the investor from larger, 
less-common losses (but does not protect against smaller losses). Insurers that offer both buffers and floors 
should generally make this distinction clear to investors in their Item 5 risk disclosures, as well as in 
response to proposed Items 2(b)(2) and 6(d) of Form N-4. 

175  See OIAD Report at Section 4, Review of RILA Marketing. 
176  See proposed Item 5(b) of Form N-4. 



108 

withdrawals may also include, if applicable, surrender charges, as well as negative contract 

adjustments and loss of interest. These are features of RILAs that implicate why they are not 

short-term saving vehicles. In addition, insurance companies that offer index-linked options 

would be required to state the maximum potential loss resulting from a negative contract 

adjustment, as a percentage. Although this last statement would be required to be provided in 

other locations in the prospectus, we are proposing to include this risk disclosure in the 

consolidated summary of principal risks because contract adjustments can significantly affect 

contract value.177 Also, contract adjustments are a distinctive feature of contracts with index-

linked options that we recognize (based on results of qualitative investors interviews) investors 

can find difficult to understand. Quantifying maximum potential loss resulting from a negative 

contract adjustment is intended to illustrate the possible effects of these adjustments. Further, 

unlike other types of losses, contract adjustments are typically avoidable by investors. As a 

result, we anticipate that showing the maximum loss possible would help investors evaluate 

whether to take an action that would result in a contract adjustment. It also would help investors 

understand the potentially significant risks that they could face in a RILA, regardless of a 

RILA’s bounded return structure. Therefore, this statement would assist investors in assessing 

unique risks associated with index-linked options in the context of the other required principal 

risk disclosures. 

 

177  See proposed Item 1(a)(7) (Outside Front Cover Page) (“Prominently state as a percentage the maximum 
potential loss resulting from a negative Contract Adjustment, if applicable.”); proposed Instruction 2(a) to 
Item 3 (Key Information Table) (“Include in this statement the maximum potential loss (as a percentage of 
the investment) resulting from a negative adjustment. . . .”); proposed Item 4 (Fee Table - Transaction 
Expenses) (“Contract Adjustment Maximum Potential Loss (as a percentage of Contract value at the start 
of the Crediting Period or amount withdrawn, as applicable)”); and proposed Instruction 1 to Item 7(e) 
(Contract Adjustment) (“State the maximum potential loss, as a percentage, that could result from a 
negative Contract Adjustment.”). 



109 

The next proposed sub-item, which concerns the principal risks associated with index-

linked options, would include new risk disclosure requirements tailored to address unique risks 

associated with these investment options.178 Under these proposed requirements, a registrant 

would have to describe the principal risks of investing in any index-linked options offered under 

the contract (in addition to the risks of potential loss from negative index performance, as 

discussed above). The proposed sub-item would require the prospectus to include a statement 

that an investor in an index-linked options is not invested in the index or in the securities tracked 

by the index. This reflects our concern, based on the results of qualitative investor interviews, 

that investors may be confused about whether an investment in an index-linked option is a direct 

investment in the index.  

To help ensure that RILA prospectuses address certain key risks, the proposed 

instructions to this disclosure requirement would specify that discussion of the principal risks 

related to index-linked options would be required to include the principal risks relating to, as 

applicable: (1) limiting positive index returns; (2) the possibility of losses despite limits on 

negative index returns; (3) interest crediting methodologies; (4) the impact of contract fees on the 

amount of interest credited; and (5) the reallocation of contract value at the end of an index-

linked option’s crediting period. We are also proposing instructions specifying that this 

discussion would be required to include, as applicable, principal index risks relating to: (1) the 

type of index (e.g., market risk, small-cap risk, foreign securities risk, emerging market risk, 

etc.); (2) the exclusion of dividends from index return; and (3) market volatility. These 

instructions would require RILA issuers to specify which risks relate to each index offered under 

 

178  See proposed Item 5(c) of Form N-4. 



110 

the contract, and to describe the principal risks related to the possible substitution of the index 

before the end of an index-linked option’s term. 

An additional proposed new sub-item would require a description of the principal risks 

associated with any contract benefits (e.g., death benefits, living benefits), including the impact 

of excess withdrawals, if applicable. These risks include, for example, investment restrictions 

associated with a living benefit, which may limit investment performance.179 As an additional 

example, there are risks that withdrawals may substantially reduce the benefit, that some 

guaranteed benefits are based on a contingency that may never occur (e.g., the contract value 

falling to zero), that the rates for contract benefits may change over time, and that certain 

benefits may be discontinued prior to election. Because these risks could impact the expected 

performance of the annuity, or in some cases could even terminate the annuity, we are proposing 

to require issuers to disclose them to in the prospectus. 

Another proposed new sub-item would require an explanation of the principal risks 

associated with the insurance company’s ability to meet its guarantees under the contract, 

including risks relating to its financial strength and claims-paying ability, which as described 

below may be of particular concern for investors who allocate contract value to index-linked 

options.180 We recognize that a summary of certain insurance company risks is currently required 

to be disclosed in the KIT.181 Moreover, although there is no corresponding disclosure 

requirement that mandates the inclusion of insurance-company-related risks in the principal risk 

disclosure in contract prospectuses, most Form N-4 registrants already provide this disclosure. 

 

179  See proposed Item 5(d) of Form N-4. 
180  See proposed Item 5(e) of Form N-4. 
181  See current Instruction 3(d) to Item 2 of Form N-4. 



111 

We therefore do not expect that current Form N-4 registrants likely would have to modify their 

disclosures to comply with the proposed requirement. Nevertheless, we propose to require this 

disclosure to be included in the consolidated principal risks section of the prospectus for 

completeness, and to help ensure that a prospectus for a contract that offers fixed options and 

index-linked options discloses the insurance company’s claims-paying ability with regard to its 

contractual guarantees. In contrast to variable options, where amounts invested are held in a 

separate account insulated from the insurance company’s general account and protected from 

general account creditors, assets invested in an index-linked option are subject to the insurance 

company’s claims-paying ability for most RILAs.  

Lastly, we propose a final new sub-item, which would require a description of the 

principal risks relating to any material reservation of rights under the contract, including if 

applicable, (1) the right to remove or substitute portfolio companies; (2) add or remove index-

linked options and change the features of an index-linked option from one crediting period to the 

next; (3) stop accepting additional purchase payments; and (4) impose investment restrictions or 

limitations on transfers.182 We propose to require this disclosure because the ability to 

discontinue contract features, alter an investor’s ability to participate in an index’s upside 

performance, and otherwise change features is important information for investors when making 

an investment decision. 

We request comment generally on the proposed amendments to Item 5 of Form N-4, and 

specifically on the following issues: 

 

182  See proposed Item 5(f) of Form N-4. 



112 

59. Do the proposed amendments to Item 5 appropriately describe the types of 

principal risks that are typically associated with investing in a contract that offers 

variable options and/or index-linked options? Should different or additional 

principal risks be required to be summarized in the prospectus? 

60. Do commenters agree with the proposed approach of amending Item 5 to 

restructure the current item into separate sub-items? For contracts offering variable 

options, do commenters agree that the proposed changes would clarify existing 

requirements, but would not generally result in substantively different principal 

risk disclosure requirements? Would the proposed changes to Item 5 require 

contracts offering variable options that are currently registered on Form N-4 to 

revise their current risk disclosure, or could they continue to use their existing 

disclosures? Why or why not? To the extent that Form N-4 registrants are currently 

disclosing risks on topics that the proposed changes address in other parts of the 

prospectus, would this current risk disclosure be considered to be “principal” risk 

disclosure?  

61. Although we are proposing to require disclosure of specified index-linked option -

related principal risks to be provided in response to the Item 5 disclosure 

requirements, we also propose to require aspects of these risks to be disclosed in 

response to certain other prospectus disclosure requirements, facilitating a layered 

disclosure approach. Is this appropriate? What “layers” of risk disclosure are 

appropriate for the summary prospectus, statutory prospectus, and SAI? 

62. Are the proposed additions to the current principal risk disclosures appropriate? If 

not, why not? Should we, for example, require a registrant specifically to disclose 



113 

principal risks associated with index-linked options, contract benefits, the 

insurance company, and any material reservation of rights under the contract, as 

proposed? If not, why not? Is an insurer’s ability to discontinue contract features, 

reduce index limits on gains and otherwise change features likely to be 

inconsistent with an investor’s reasonable expectations, as we state above? Should 

we modify any of the aspects of these proposed principal risk disclosure 

requirements?  

5. Addition of Contract Adjustments and Other Amendments to Fee and 

Expense Disclosures (Items 4, 7, and 22) 

We are proposing amendments to Form N-4 to require specific disclosures regarding 

contract adjustments and other implicit RILA-specific costs that can result in a significant 

erosion of investment principal. The proposed disclosures are designed to provide investors with 

a better understanding of the mechanics of these costs and the associated potential for loss. 

Under the proposed approach, these disclosure requirements would be set forth in Items 4, 7, and 

22(d) of Form N-4. We are also proposing revisions to the existing provisions of these Items, 

applicable to all Form N-4 issuers, to clarify certain terminology.  

a) Amendments to Fee Table Disclosure Requirements (Item 4) 

We propose amending Item 4 to require specific disclosures regarding contract 

adjustments and other costs specific to RILAs. Item 4 currently requires variable annuity 

registrants to provide comprehensive information on the fees and expenses investors will pay 

when buying, owning, and surrendering or making withdrawals from a contract, as well as 

expenses paid each year during the time the investor owns the contract. While RILAs typically 

do not charge the explicit ongoing fees and expenses common to variable annuities, investors do 

experience an implicit ongoing fee to the extent the insurer limits, through the use of a cap, 



114 

participation rate, or some other rate or measure, index gains. Moreover, RILA issuers typically 

utilize contract adjustments, which can result in a significant charge to investors who make 

withdrawals from an index-linked option or from the contract before the end of a specified 

period. Further, investor testing suggested that most participants struggled to fully comprehend 

the costs to investors of these products.183 These costs include contract adjustments because they 

can negatively affect an investor’s contract value or the amounts an investor could withdraw 

from the contract.184 Accordingly, we are proposing to include a detailed description of contract 

adjustments in the prospectus, and that this disclosure be proximate and similar to other 

disclosures regarding fees and expenses. Thus, we are proposing several amendments to 

incorporate the concept of contract adjustments as well as implicit ongoing fees and expenses 

into the current Item 4 disclosure requirements. We propose generally expanding the tabular 

disclosures that Item 4 requires to address contract adjustment costs that investors will pay when 

buying, owning, and surrendering or making withdrawals from an investment option, and as 

noted below, requiring disclosures about the maximum potential loss that an investor could 

experience in connection with a contract adjustment. We are also proposing to expand the tabular 

disclosures with respect to annual contract expenses, to alert investors to the implicit ongoing 

costs associated with limiting positive index returns. In addition, we are proposing certain non-

substantive changes to the fee table disclosures and instructions that would be applicable to all 

issuers.185 Particularized changes we propose to the fee table disclosures are discussed below.  

 

183  See OIAD Report at Section 6, Quantitative Testing, Testing Impacts, Table 9 (noting that 16.2 percent of 
participants understood that a participation rate reduces potential gains from the market and 52.1 percent of 
participants understood that a cap reduces potential gains from the market). 

184  See, e.g., OIAD Report at Section 5, Qualitative Testing, Results From Round 2.  
185  In order to eliminate unnecessary information in the prospectus, we propose amending the general 

instructions to clarify that registrants may omit a narrative explanation that is not applicable under the 
 



115 

Transaction Expenses Table 

Form N-4 issuers currently must include a transaction expenses table in their 

prospectuses, describing fees and expenses investors must pay when buying, owning, and 

surrendering or making withdrawals in connection with a contract. This requires a description of 

the sales load imposed on purchases (as a percentage of purchase payments), the deferred sales 

load (as a percentage of purchase payments or amount surrendered, as applicable), and transfer 

fees. To provide proximate and similar disclosure for RILA-specific costs, we propose to require 

that insurance companies additionally include the maximum negative contract adjustment that 

may be imposed, to be expressed as a percentage of contract value at the start of the crediting 

period or the amount withdrawn, as applicable. To provide investors notice of the circumstances 

where they might be subject to this cost, we also propose that insurance companies include a 

footnote describing all transactions potentially subject to a contract adjustment.186  

Currently this table also requires registrants to describe the maximum exchange fee that 

investors could incur for any exchange or transfer of contract value from the registrant to another 

investment company, or between sub-accounts or to the insurance company’s general account. In 

a change relevant to all Form N-4 issuers, we are proposing a terminology change, replacing the 

term “exchange fee” with “transfer fee,” as this term better reflects our experience, namely that 

 

contract. See proposed instruction 1 to Item 4 of Form N-4. We also are proposing an amendment to 
general instruction 5 regarding the preparation of the Transaction Expenses and Annual Contract Expenses 
tables, clarifying that the instruction to disclose the maximum guaranteed charge as a single number where 
a fee is calculated based on a benchmark does not apply to a contract adjustment. See proposed instruction 
5 to Item 4 of Form N-4.  

186  See proposed instruction 11 to Item 4 of Form N-4. 



116 

the vast majority of such fees are those imposed on transfers of account value among investment 

options under the contract.187 

Annual Contract Expenses 

Form N-4 issuers currently must include an annual contract expenses table in their 

prospectuses, detailing the fees and expenses that investors pay each year in administrative 

expenses, base contract expenses, and optional benefit expenses. Currently, base contract 

expenses must be expressed as a percentage of average account value. In a change relevant to all 

Form N-4 issuers, we propose an amendment that would also allow base contract expenses to be 

expressed as a percentage of average account value or contract value. We do not expect that this 

change will substantively affect variable annuities’ existing disclosure.  We are proposing this 

expansion to describe expenses deducted where index-linked options or fixed options are 

implicated, as those options do not generally use the concept of average account value.188 

Additionally, to place investors on notice of the unique and ongoing trade-off costs associated 

 

187  See proposed Instruction 10 to Item 4 of Form N-4. Under the proposed definition, “transfer fee” would 
encompass both the maximum fee charged for any exchange or transfer of contract value between 
investment options as well as the maximum fee charged for any exchange or transfer of contract value from 
the registered separate account to another investment company or from the registered separate account to 
the insurance company’s general account. Thus, the proposed amendments regarding the definition and 
terminology surrounding transfer fees would not result in any substantive change for existing Form N-4 
issuers. 

188  We are also proposing two related, non-substantive amendments to the instructions relating to annual 
contract expenses relevant to all issuers. These changes are to broaden terminology given the expanded 
scope of issuers that under the proposal could file on Form N-4. Currently the instruction for describing 
administrative expenses references “any Contract, account, or similar fee on all Investor Accounts;” 
however, as noted below, we propose deleting the term “Investor Account,” and accordingly also propose 
amending this instruction to conform to that change. Relatedly we are proposing to amend the instruction 
regarding base contract expenses to remove a reference to fees and expenses deducted “from separate 
account assets or charged to all Investor Accounts,” replacing it with an instruction to consider fees and 
expenses “charged to any Investment Option.” 



117 

with RILAs that may not be captured by this table, we are proposing to require registrants to 

include the following statement in the table: 

In addition to the fees described above, we limit the amount you can earn on 
an Index-Linked Option. Imposing this limit helps us make a profit on the Index-
Linked Option. In return for accepting this limit on Index gains, you will receive 
some protection from Index losses. 
 
Annual Portfolio Company Expenses 

Form N-4 currently requires issuers to include in the prospectus an annual portfolio 

company expenses table, disclosing the minimum and maximum total operating expenses 

charged by the portfolio companies offered by variable annuity contracts that may be 

periodically charged to investors during the time they own the contract. This includes costs 

incurred by portfolio companies directly and, if the portfolio company invests in other mutual 

funds, the fees and expenses the portfolio company indirectly incurs from these investments. In a 

change that also would apply to variable annuities prospectuses, we are proposing that registrants 

disclose that expenses shown in this table may change over time and may be higher or lower in 

future. We propose this change for two reasons. First, this modification would help to ensure that 

investors understand that these charges may increase over time, notwithstanding that these 

charges are described as maximum expenses. Second, given that we are proposing similar 

disclosures with regard to features of RILA offerings that are subject to change, we propose to 

require a similar level of disclosure with regard to variable annuity offerings where appropriate. 

Example 

Form N-4 issuers currently must provide an example in their prospectuses that is 

designed to allow variable annuity investors to compare the cost of investing in the contract with 

the cost of investing in other variable annuity contracts. We propose amending the example 

requirements to clarify, for variable annuity and RILA issuers, that the example is designed to 



118 

permit investors to compare costs of investing solely in variable options under the contract with 

costs associated with variable options offered under other annuity contracts. Under the proposal, 

the example would be preceded with a legend specifically stating that: the example assumes that 

all contract value is allocated to variable options; the example does not reflect contract 

adjustments; and costs would likely differ if an investor selects index-linked options or fixed 

options. 

b) Charges (Item 7) 

Currently, Item 7 requires registrants to provide a brief description in their prospectuses 

of all current charges deducted from purchase payments, investor accounts, or assets of the 

registrant. Consistent with the proposed changes to Item 4, we also are proposing a change in 

terminology that would affect all Form N-4 issuers, replacing references in Item 7 to “investor 

accounts” and the assets of “registrants” with the terms “contract value” and “investment option” 

assets, respectively. Therefore, in responding to Item 7, variable annuity and RILA issuers would 

describe charges deducted from purchase payments, contract value, or investment option 

assets.189 

For the reasons described above and given the potentially significant economic 

consequences contract adjustments can have on RILA investors, we are also proposing additional 

specific requirements to incorporate contract adjustments into the prospectus’s disclosure of 

 

189  Additionally, we are proposing two non-substantive terminology changes in Instruction 3 to Item 7(a) 
regarding how registrants must describe the sources that will be used to cover shortfalls where proceeds 
from sales load will not cover expected costs. First, we propose replacing the term “depositor” with the 
term “insurance company.” Second, where shortfalls are to be made from an insurance company’s general 
account, this instruction requires a disclosure that amounts paid by the insurance company may consist of 
proceeds derived from base contract expenses deducted from the registered separate account. We propose 
striking this italicized language referring to assets of the registered separate account because it is 
superfluous given the definition of “base contract expenses” in proposed Instruction 14 to Item 5, discussed 
above. 



119 

charges, which would entail detailed descriptions of any contract adjustments under the contract. 

These disclosures are designed to be comparable in scope and proximate to existing disclosures 

about contract charges applicable to variable annuities.190  

Specifically, we are proposing that insurance companies would have to: (1) disclose (as a 

percentage) the maximum potential loss that could result from a negative contract adjustment; 

(2) define the period during which any contract adjustment would apply; and (3) describe all 

transactions subject to a contract adjustment.191 Insurance companies also would have to include 

a description of how the contract adjustment will affect the contract value, surrender value, death 

benefit, and any living benefits, and disclose that a negative adjustment could reduce the value 

under the contract in an amount greater than the value withdrawn.192 They would also need to 

describe, in simple terms, how the contract adjustment is determined under the contract, and the 

relationship between the contract adjustment and any other charges or fees applied under the 

contract, including, for example, the sequence in which charges and adjustments are applied.193 

The required disclosure would also require the issuer to briefly describe the purpose of the 

 

190  See instructions (a) through (d) to Item 7 of Form N-4. 
191  See proposed instructions (e)(1) through (e)(3) to Item 7 of Form N-4. In describing the transactions subject 

to a contract adjustment, the insurance company would need to describe, for example, whether adjustments 
apply if amounts are transferred or withdrawn from an index-linked option or from the contract due to a 
partial withdrawal, surrender, election of an annuity option, or payment of death benefit proceeds, or where 
a particular optional benefit (e.g., a withdrawal under a guaranteed living benefit) is utilized, and to 
describe any circumstances under which the adjustment will be waived. 

192  See proposed instruction (e)(5) to Item 7 of Form N-4. If applicable, the insurance company would also be 
required to state the impact of the contract adjustment on interest to be credited to an index-linked option at 
the end of its crediting period. 

193  See proposed instructions (e)(4) and (e)(6) to Item 7 of Form N-4. The description of how the contract 
adjustment is determined would have to provide a meaningful explanation of all the material features of the 
contract adjustment’s application, including: (1) information about any formula applied (e.g., a change in 
value of hypothetical derivative instruments); (2) the factors that may cause an adjustment (e.g., timing of 
withdrawal, index volatility, increase in external interest rates); (3) a description of any proportionate 
withdrawal calculations; and (4) how adjustments are applied (e.g., allocated among the investment 
options, applied to a withdrawal amount). 



120 

contract adjustment, including, for example, that the contract adjustment transfers risk from the 

insurance company to the investor to protect the insurance company from losses on its own 

investments supporting contract guarantees if amounts are withdrawn prematurely.194 Finally, 

issuers would be required to disclose how an investor can obtain information about the current 

value of the contract adjustment, while stating that this value can fluctuate daily, and that the 

quoted value may differ from the actual value at the time of adjustment.195  

These proposed disclosures are intended to provide investors with the necessary scope 

and level of detail of the contract adjustments that could negatively affect an investor’s contract 

value or the amounts an investor could withdraw from the contract. These disclosures are further 

justified given the RILA Act’s requirement that the Commission use the results of investor 

testing in designing a registration form for RILAs. That mandated investor testing showed that 

participants were confused about contract adjustments, their purpose, the situations in which they 

could arise, their potential magnitude, and their relationship to other fees and charges (e.g., 

surrender fees).196 These disclosures are designed to address these areas of identified confusion.  

To simplify this disclosure, we propose specifying that detailed disclosure on the method 

of calculating the contract adjustment appear in the SAI, as opposed to the prospectus.197 We 

also propose requiring that Item 7(e) include a cross-reference to Item 22 of Form N-4, which 

would require more-detailed disclosure on the contract adjustment’s calculation (including 

illustrative examples as to adjustment’s operation) to appear in the SAI. The more detailed SAI 

 

194  See proposed instruction (e)(7) to Item 7 of Form N-4. 
195  See proposed instruction (e)(8) to Item 7 of Form N-4. 
196  See, e.g., OIAD Report at Section 5, Qualitative Testing, Results From Round 2 and Section 7, 

Conclusions. 
197  See proposed instruction (e)(4) to Item 7 of Form N-4.121 

discussion is not, however, a substitute for the Item 7 requirements. Thus, for example, an 

insurance company could not include the formula underlying the contract adjustment calculation 

in the SAI in lieu of the required discussion of the formula in the prospectus. Rather, in addition 

to stating the formula in the SAI, the insurance company would need to include in the prospectus 

a brief description, in simple terms, of the manner in which contract adjustment is determined. 

Further, while the proposed disclosures are tailored to the mechanics of contract 

adjustments, they are also designed to be, where possible, consistent with existing requirements 

regarding disclosure of current charges deducted from purchase payments, investor accounts, or 

assets of the registrant. For example, Form N-4 currently requires disclosure of current fees and 

charges, which are typically expressed as a percentage. Because the value of a given contract 

adjustment can change daily, we are proposing that insurance companies disclose the maximum 

potential loss, as a percentage, that could result from a negative contract adjustment (rather than 

mandate a disclosure of a current contract adjustment value that could quickly become 

outdated).198  

c) Purchase of Securities Being Offered (Item 22) 

We are proposing to amend Item 22, which addresses the purchase of securities being 

offered, to require specific, detailed contract adjustment disclosures to appear in RILA issuers’ 

SAIs. As discussed above, issuers would be required to provide a simple explanation of the 

underlying mechanics of contract adjustments in their prospectuses, while noting that further 

detail is available in the SAI and providing a cross reference to that information. Under the 

proposal, in addition to the discussion required in the prospectus by Item 7, Item 22 would 

 

198  See proposed instruction (e)(1) to Item 7 of Form N-4. 



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require issuers to explain fully the operation of any contract adjustment that can be applied under 

the contract. This more detailed explanation would not take the place of the prospectus 

discussion and would need to address all the material features of the adjustment and include an 

explanation of any formulas used to calculate the adjustment, and at least one numeric example 

to illustrate the application of the contract adjustment. This numeric example would have to 

include a negative adjustment, reflect surrender charges (if applicable), and disclose the 

percentage change in contract value as a result of the adjustment.  

The mechanics of contract adjustments under a RILA contract are typically complex, 

often implicating the application of factors or formulas that can be difficult for many investors to 

understand. Because the application of a negative contract adjustment can substantially affect an 

investor’s contract value, however, we propose to require the inclusion of information on 

negative contract adjustment in the SAI, so that investors who wish to learn more about the 

calculation may do so.  In addition to promoting transparency generally, this proposed disclosure 

would ensure that liability attaches under section 11 of the Securities Act for any material 

misrepresentations regarding the application of a contract adjustment. 

We are also proposing to make applicable to RILA issuers certain existing SAI disclosure 

requirements about the purchase of securities being offered. Specifically, we are proposing 

revisions to the instructions to the existing requirement to describe the manner in which the 

securities are offered to the public, which would instruct RILA issuers to respond by addressing 

any exchange privileges between investment options.199 Additionally, we propose to make the 

existing requirement to describe the method used to determine the sales load applicable to RILA 

 

199  See proposed Item 22(a) of Form N-4. 



123 

issuers.200 We do not propose applying the existing disclosure requirement dealing with frequent 

transfer arrangements to RILA issuers, as its provisions are relevant only to variable annuity 

contracts.201 

d) Request for Comment 

We request comment on these proposed amendments. 

63. Do commenters agree that it is appropriate to include a discussion of contract 

adjustments in Items 4, 7, and 22 as proposed? If not, how would commenters 

suggest issuers disclose contract adjustments to ensure that investors have 

sufficient information to make an informed investment decision regarding RILAs? 

64. Is it appropriate to require the disclosure of the contract adjustment maximum 

potential loss in the transaction expense table? Do commenters agree that is 

appropriate to require that issuers express the contract adjustment maximum 

potential loss as a percentage? If not, what alternative measure would commenters 

suggest? 

65. Do commenters agree that the proposal strikes the proper balance in the location of 

the proposed contract adjustment disclosures? Are there any contract adjustment 

disclosures we propose including in the SAI that commenters believe would be 

more appropriately located in the prospectus? Are there any contract adjustment 

disclosures we propose including in the prospectus that commenters believe would 

be better situated in the SAI? 

 

200  See proposed Item 22(b) of Form N-4. 
201  See proposed Item 22(c) of Form N-4. 



124 

66. Do commenters agree with our proposal that issuers be required to include, in the 

annual contract expenses table, a statement disclosing that, in addition to the 

expenses described in the table, investors will be subject to limits on the amounts 

they can earn in connection with index-linked options? Do commenters agree that 

it is appropriate to include a statement addressing current limits on gains in 

conjunction with the annual contract expenses table? Do commenters agree the 

proposed statement captures the most salient concerns to investors of these kinds 

of limits on gains? Do commenters have any suggestions for alternate wording or 

placement of the statement?  

67. Do commenters have any suggestions about additional or alternative disclosures 

that would address the areas of confusion regarding contract adjustments that this 

release describes as being identified in investor testing? 

68. Are there any concerns with our proposal to use the term “contract adjustment” 

when referring to MVAs (market value adjustments) and IVAs (interim value 

adjustments)? Is there an alternative term that we should use to describe these 

kinds of adjustments?  

69. Does our proposal to replace the term “exchange fee” with “transfer fee” in Item 4 

raise any concerns? 

70. With regard to the numeric examples we propose requiring in the SAI, should 

there be any additional requirements for what those examples would need to 

include? For example, should we require that the example utilize the average 

negative contract adjustment in operation for the preceding year, or the negative 

contract adjustment expected over the next year? Should we also (or instead) 



125 

require an example of a contract adjustment in the prospectus? If so, why, and 

what particular assumptions should we require in the example?  

71. Do commenters agree with our recommendation to place the more detailed 

disclosures associated with the mechanics of contract adjustments (such as 

applicable formulas) in the SAI as opposed to the prospectus? Why or why not?  

72. In addition to the contract adjustment disclosures we have proposed, should we 

also require issuers to provide a graphic illustrating the operation of a contract 

adjustment? If so, where should we require that graphic illustration be presented, 

and what particular circumstances should it illustrate? For example, would it be 

helpful to require issuers to include a graphic illustration demonstrating how a 

contract adjustment works when investors withdraw amounts from their contract 

prior to the end of a crediting period? Should we require illustrations that 

demonstrate the operation of a contract adjustment for investors in circumstances 

where they change to a different index-linked option before the end of a crediting 

period, and demonstrating how they can change investment options to minimize 

the financial impact to their contract value? 

6. Information about Contracts with Index-Linked Options (Item 31A) 

We are proposing new Item 31A of Form N-4 to require census-type information 

regarding RILAs offered in connection with the applicable registration statement. Specifically, 

under proposed Item 31A, an insurance company would be required to provide the following 

information regarding any RILA offered through the registration statement, as of the most recent 

calendar year-end: (1) the name of each contract; (2) the number of contracts outstanding; (3) the 

total value of investor allocations attributable to index-linked options; (4) the number of 

contracts sold during the prior calendar year; (5) the gross premiums received during the prior 



126 

calendar year; (6) the amount of contract value redeemed during the prior calendar year; and (7) 

whether the contract is a “combination contract,” that is, a contract that offers variable options in 

addition to index-linked options. This information would be required as of the most recent 

calendar year-end and, accordingly, would generally be updated through a post-effective 

amendment to a registration statement on Form N-4.202 

This information is census-type data that would provide contract-level disclosures 

designed to assist the Commission and staff in identifying trends in insurance companies’ 

offerings of RILAs. This information would also provide improved transparency to investors by 

supplementing the information available about the marketplace for the contracts offered in 

connection with a registration statement. These items are relatively limited in scope and 

primarily consist of information that should generally be readily available to issuers. The 

particular data required is similar to that provided by registered separate accounts that likewise 

assist the Commission and staff in identifying trends in variable annuities.203  

We are proposing to require information to be presented as of the most recent calendar 

year-end to provide the Commission and its staff with information that will be updated with an 

annual frequency for offerings of RILAs. We anticipate that this information would typically be 

updated as part of an issuer’s annual update to its registration statements for such contracts.204 

This approach would result in information provided as of a uniform date for all offerings of 

 

202  See proposed Item 31A of Form N-4. An issuer transitioning from an existing registration statement on 
Form S-1 or S-3 to Form N-4 through a post-effective amendment would be required to report this 
information as of the most recently completed calendar year in its first post-effective amendment 
transitioning onto Form N-4.  

203  See Item F.14 of Form N-CEN; see also Investment Company Reporting Modernization, Investment 
Company Act Release No. 32314 (Oct. 13, 2016) [81 FR 81870 (Nov. 18, 2016)] at the sentences 
following n.1142. 

204  See 15 U.S.C. 77j(a)(3). 



127 

RILAs, regardless of the issuer’s filing date, and, in turn, would provide for increased 

comparability across issuers and contracts.205 Requiring this information to be updated annually 

is intended to achieve an appropriate balance between providing the Commission and its staff 

with current information while avoiding overburdening issuers. An annual snapshot should be 

sufficient for the census-type nature of the information and would provide Commission staff 

with appropriate intervals of data points over time in which to identify trends in insurance 

companies’ offerings of RILAs. Requiring these issuers to report such census information semi-

annually or more frequently would place an increased burden on issuers that may not be justified 

by a commensurate increase in the value of the information received by the Commission. 

This reporting would provide the Commission with additional transparency into the 

RILA market segment, which would in turn improve the effectiveness of the Commission’s 

oversight of offerings on Form N-4. Requiring this high-level reporting would permit the 

Commission to identify trends occurring in this market segment over time and assist with 

allocating the Commission’s resources in administering the form. This reported information on 

index-linked options would complement parallel census-type information that is currently 

required to be reported annually on Form N-CEN by registered unit investment trusts offering 

variable annuities.206 The new census-type information therefore would help provide the 

Commission with a more complete picture of the marketplace for insurance products offered 

 

205  We understand that insurance companies offering RILAs have a December 31 fiscal year end which, in 
practice, means a distinction between calendar year and fiscal year would result in limited effect on the 
reporting. 

206  Issuers registering combination contracts on Form N-4 would be required to exclude amounts allocated to a 
variable option when providing information in response to Item 31A as these allocations would be 
separately reported by registered separate accounts on Form N-CEN. 



128 

through registration statements on Form N-4. In addition, this information may benefit the public 

in supplementing the information available about RILAs. 

We request comment on these proposed amendments. 

73.  Are the required reporting elements in Item 31A of proposed Form N-4 

appropriate and clear? If not, what elements require additional instruction? 

74. Do commenters agree that it is appropriate to require reporting under Item 31A to 

be provided as of calendar year-end? Do commenters agree that there is limited 

practical difference between requiring a fiscal year-end and calendar year-end 

requirement in light of investment company practices?  

75. Should we require additional or different reporting of census-type reporting 

regarding RILAs? If so, should we also amend the requirements of Form N-CEN 

to ensure parallel reporting by registered unit investment trusts offering variable 

annuities registered on Form N-4? 

76. Would RILA issuers face any significant challenges in providing the required 

reporting elements? If so, why? 

77. Do commenters agree that it would be appropriate for issuers with existing 

contracts to report information required by proposed Item 31A for the calendar 

year prior to the calendar year the issuer first transitions its registration statement 

onto Form N-4?  

7. Other Amendments and Provisions 

Our proposed amendments also include certain other amendments to Form N-4 and 

related rules designed to accommodate the inclusion of RILA issuers on that form. These include 

amendments to Form N-4’s facing sheet, definitions, exhibit list, and required representations, as 



129 

well as amendments to certain Securities Act rules that help to implement the proposal. These 

proposed amendments are discussed below. 

a) Facing Sheet  

We are proposing amendments to include a new checkbox section on the facing sheet. 

Specifically, an issuer would be required to identify in this new section: (1) if it is a new 

registrant, defined as, as applicable, a registered separate account or insurance company that has 

not filed a Securities Act registration statement or amendment thereto within 3 years preceding 

this filing;207 (2) if it is an emerging growth company (“EGC”), as defined by Rule 12b-2 under 

the Exchange Act; (3) if it is an EGC, whether it has elected not to use the extended transition 

period for complying with any new or revised financial accounting standards provided pursuant 

to Section 7(a)(2)(B) of the Securities Act; and (4) if it is relying on an exemption from 

Exchange Act reporting requirements in reliance on rule 12h-7.208 These changes would help the 

Commission better understand the types of registration statements being filed on Form N-4 and, 

in the case of the EGC information, mirrors similar facing sheet requirements found in Form S-1. 

In addition, we are proposing amendments to the description of the types of entities that use 

Form N-4 to include insurance companies that offer index-linked options, either as stand-alone 

or combination products.209  

 

207  For example, a variable annuity separate account that has not previously filed a Securities Act registration 
statement would identify itself as a new registrant, regardless of whether the sponsoring insurance company 
has filed a recent Securities Act registration statement or amendment thereto as the proposed requirements 
request information on the registrant. In the same manner, an insurance company filing on Form N-4 would 
determine whether it is a new registrant solely with respect to its own Securities Act registration statement 
filings. 

208  In addition to this checkbox, we are proposing an instruction that implements the requirements of rule 12h-
7 to indicate that the insurance company is relying upon the exemption provided by that rule in the relevant 
prospectus. See supra section II.B.3.b. 

209  See supra section II.A. 



130 

b) Definitions (General Instruction A) 

We are proposing amendments to General Instruction A to update the existing definitions 

in Form N-4, add new definitions to accommodate the inclusion of RILAs on Form N-4, and 

implement these proposed definitions throughout the form. However, unless otherwise stated, the 

proposed amendments to the definitions in General Instruction A would not alter the existing 

obligations under Form N-4 for current issuers on Form N-4. These changes should provide a 

standard set of definitions to convey form provisions in a consistent and efficient manner without 

the need for lengthy descriptions in each instance and clarify which form provisions apply to 

which categories of issuers and investment products.210 

Specifically, we propose to add a new definition for “index-linked option.” The proposed 

definition covers RILAs and index-linked options offered in combination contracts, as an 

investment option offered under any contract, pursuant to which the value of the contract, either 

during an accumulation period or after annuitization, or both, will earn positive or negative 

interest based, in part, on the performance of a specified index.211 This is a functional definition 

focused on the key features of a RILA and would cover RILAs as defined in the RILA Act. We 

also propose to define “fixed option” as an investment option under the contract pursuant to 

which the value of the contract, either during an accumulation period or after annuitization, or 

both, will earn interest at a rate specified by the insurance company, subject to a minimum 

guaranteed rate under the contract. Further, we would change the existing definition of “variable 

annuity contract” to “variable option” and move the parts of that definition that refer to annuity 

 

210  We are also proposing to amend Form N-4 throughout to use the gender-neutral reference of “investor” 
where appropriate. See, e.g., proposed Instruction 6 to Item 2 of Form N-4. 

211  Because RILA returns may not be one for one with the index, we propose to indicate that positive or 
negative interest is only based “in part” on the index’s performance. 



131 

contracts generally to a new definition for “contract.” In connection with the addition of other 

types of investment options on Form N-4, we are proposing to amend “portfolio company” to 

clarify that this term relates to the investment companies offered as investment options in 

contracts containing variable options. We also propose to add a new defined term “investment 

option” to refer collectively to any index-linked, variable, or fixed option. We propose to add 

these items to help clarify which provisions of amended Form N-4 apply to which types of 

annuities or investment options.  

Because an insurance company issuing a RILA is not acting as a depositor, we propose to 

change the definition of “depositor” to “insurance company.” The proposed definition refers to 

the insurance company that issues the contract, which company is subject to state supervision, 

and that the insurance company may also be the depositor or sponsor for a variable annuity 

separate account. We would also add a new definition of “registered separate account” defined as 

the separate account in which the contract participates with regard to any variable option offered 

under the contract, and refine the definition of “registrant” to mean either the registered separate 

account or insurance company, as applicable. These changes further help to clarify which 

provisions of the form apply to variable annuities and RILAs. 



132 

We also propose to add definitions of “index,”212 “contract adjustment,”213 and “crediting 

period”214 to refer to these RILA-centric concepts in the form and, in the case of “contract 

adjustment” and “crediting period,” help clarify when the relevant disclosures would be required. 

Lastly, we propose to eliminate the currently defined term “investor account.” Insurance 

companies typically do not use this term in their disclosure, and the more generalized concept of 

contract value, which also is designed to address the value of an investor’s investment, is 

intended to convey the characteristics of the broader scope of annuities that insurance companies 

could register on Form N-4 under the proposal. 

We also are proposing related amendments throughout Form N-4 to help implement the 

proposed new definitions. For example, we are proposing to clarify the applicability of certain 

variable annuity or Investment Company Act-specific disclosure to limit those requirements to 

“registered separate accounts” or “variable options” when appropriate.215 As another example, 

the form requires disclosure of the procedures to purchase an annuity contract including certain 

particularized information.216 We would apply this provision generally to all annuities including 

 

212  As proposed, “index” means any index, rate, or benchmark (such as a registered exchange-traded fund that 
tracks an index) used in the calculation of positive or negative interest credited to an index-linked option. 
See proposed General Instruction A to Form N-4. 

213  As proposed, “contract adjustment” means a positive or negative adjustment made to the value of the 
contract by the insurance company if amounts are withdrawn from an index-linked option or from the 
contract before the end of a specified period. This adjustment may be based on calculations using a 
predetermined formula, or a change in interest rates, or some other factor or benchmark. See id.  

214  As proposed, “crediting period” means the period of time over which an index’s performance is measured, 
subject to applicable limits on index gains and losses, to determine the amount of positive or negative 
interest that will be credited to an index-linked option at the end of the period. 

215  See, e.g., proposed Items 3, 7, 8, 24, 32, and 34(a) of Form N-4; see also proposed definitions for “class” 
(clarifying applies to all contracts) and “platform charge” (clarifying only applies if there is a variable 
option). 

216  See Item 11 of Form N-4. 



133 

RILAs, but are only requiring certain disclosures relating to the operation of accumulation units 

and sub-accounts to contracts with variable options as those elements are not utilized by RILAs. 

c) Rules 405, 480, 481, 483, and 484 

We are proposing amendments to rule 405 under the Securities Act to add the new 

defined terms “Form available solely to investment companies registered under the Investment 

Company Act of 1940” and “registered index-linked annuity” for purposes of Securities Act 

rules.  

Certain Securities Act rules apply only to registration statements that are prepared on a 

form available solely to a registered investment company or a business development company. 

These rules are 17 CFR 230.480 (“rule 480”), 17 CFR 230.481 (“rule 481”), 17 CFR 230.483 

(“rule 483”), and 17 CFR 230.484 (“rule 484”) under the Securities Act, and include forms such 

as Forms N-1A, N-2, N-3, N-4, N-5, and N-6. These rules prescribe requirements relating to: 

information given with the title of securities; information contained in registration statements; 

exhibits filed as part of the registration statement; and undertakings required with respect to 

requests for acceleration. 

By virtue of moving RILAs, which are not issued by a registered investment company, 

onto Form N-4, Form N-4 would be outside the scope of this description absent the proposed 

amendments. As such, the proposed new defined term “form available solely to investment 

companies registered under the Investment Company Act of 1940” would specify that these rules 

would continue to apply to registration statements filed on Form N-4. Specifically, we are 

proposing to amend rule 405 to state that “a form available solely to investment companies 

registered under the Investment Company Act of 1940” includes the form used to register the 

offering of securities of a registered index-linked annuity for purposes of the Securities Act of 

1933. By operation of this new term, RILA registration statements on Form N-4 would be 



134 

subject to rules 480, 481, 483, and 484.217 We propose to subject RILA registration statements to 

these rules to help facilitate a consistent application of Form N-4 requirements.  

We are also proposing to add a definition of “registered index-linked annuity” to rule 

405, which provides consistent definitions for select terms used throughout the Securities Act 

rules, to simplify references to RILAs in the proposed Securities Act rule amendments. 

Specifically, we would define “registered index-linked annuity” as an annuity or an option 

available under an annuity (1) that is deemed a security; (2) that is offered or sold in a registered 

offering; (3) that is issued by an insurance company that is the subject to the supervision of either 

the insurance commissioner or bank commissioner of any state or any agency or officer 

performing like functions as such commissioner; (4) that is not issued by an investment 

company; and (5) whose value, either during the accumulation period or after annuitization or 

both, will earn positive or negative interest based, in part, on the performance of any index, rate, 

or benchmark.  

Under the RILA Act, 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, (C) that is issued by an insurance company that is subject to the 

supervision of the insurance commissioner or bank commissioner of any State or any agency or 

officer performing like functions as such commission, (D) that is not issued by an investment 

company, and (E) the returns of which are based on the performance of a specified benchmark 

 

217  These rules currently apply to registration statements on Form N-4. Rule 480 prescribes requirements 
relating to information given with the title of securities. Rule 481 prescribes certain information to be 
required in the registration statement (e.g., certain legends to appear on the front and back cover pages of 
prospectuses). Rule 483 prescribes certain requirements relating to exhibits filed as part of the registration 
statement. Rule 484 prescribes certain required undertakings with respect to requests for acceleration under 
17 CFR 230.461 when certain arrangements exist with respect to indemnification of specified persons 
against liability under the Securities Act.  



135 

index or rate (or a registered exchange traded fund that seeks to track the performance of a 

specified benchmark index or rate) and 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.218 

The proposed definition in rule 405 differs in certain respects from this definition,  but covers all 

offerings that would be included in the RILA Act’s definition. These differences are intended to 

simplify the definition and use terminology that is consistent with other rules under the Securities 

Act. For example, the proposed definition clarifies that the insurance company is registering the 

offering of a RILA, rather than the RILA itself, with the Commission.219 As another example, 

the proposed definition in rule 405 does not include a reference to a “market value adjustment,” 

as the RILA Act’s definition does, because the RILA Act did not require that feature as a 

predicate for being a “RILA.”220 Since the presence of a market value adjustment does not factor 

into the assessment of whether a security is a RILA under the RILA Act’s definition, it is 

unnecessary to refer to this feature in the proposed definition in rule 405. The proposed 

definition, however, continues to encompass the full scope of the RILA Act’s definition.  

d) Exhibits and Undertakings (Items 27 and 34) 

As a function of moving RILAs onto Form N-4 and subjecting them to the requirements 

of rule 483, RILA issuers would be required to file various exhibits as part of a registration 

statement, similar to the requirements these issuers are subject to when registering RILA 

 

218  See Pub. L. 117-328; 136 Stat. 4459 (Dec. 29, 2022). 
219  This is functionally the same as the requirement of the RILA Act that the RILA “be registered with the 

Commission in accordance with section 5 of the Securities Act of 1933.” See section 101(a)(5) of Division 
AA, Title I of the Consolidated Appropriations Act, 2023. 

220  See Pub. L. 117-328; 136 Stat. 4459 (Dec. 29, 2022) (defining RILA as an annuity, among other things, the 
returns of which may be subject to a market value adjustment if amounts are withdrawn before the end of a 
period in which that market value adjustment is applied) (emphasis added). 



136 

offerings on Forms S-1 and S-3 currently.221 Further, in addition to the requirements of rule 484, 

we are proposing to amend Item 34 of Form N-4 to include certain undertakings currently 

required of RILAs as part of their Form S-1 and S-3 registration statements.222  

Item 27 - Exhibits 

RILA issuers are currently subject to the integrated disclosure requirements of Regulation 

S-K when registering their offerings, which provide requirements for exhibits that must be filed 

as part of the registration statement.223 Conversely, issuers on Form N-4 are required to file the 

exhibits required by rule 483 and Item 27 of Form N-4. To provide consistent requirements for 

Form N-4 issuers, we are proposing amendments to require RILA issuers to adhere to the same 

requirements as current issuers on Form N-4. RILA issuers and current Form N-4 issuers are 

subject to somewhat different provisions for filing exhibits to a registration statement. However, 

there are significant similarities between the types of the exhibits that each type of issuer is 

required to file, and thus we generally are not proposing to change those requirements. RILA 

registration statements will therefore continue to include the types of exhibits currently included 

in their registration statements on Forms S-1 and S-3. For example, RILA issuers filing on Form 

N-4 would continue to be required to file such exhibits as the insurance company’s certificate of 

incorporation and by-laws, forms of contracts offered in connection with the registration 

 

221  See Item 16 of Form S-1; Item 16 of Form S-3; Item 601 of Regulation S-K. 
222  The disclosure currently required in Item 34, the fee representation mandated of registered separate 

accounts under the Investment Company Act, would be retained as paragraph (a) of this item, limited in 
application to variable options, and the new undertakings added as new paragraph (b) and limited to index-
linked options. See also 15 USC 80a-26(f)(2)(A). We would also rename this item “Fee Representation and 
Undertakings.” 

223  See 17 CFR 229.601. 



137 

statement, underwriting agreements, legal opinions, and other material contracts, as 

applicable.224  

We are not, however, proposing to amend Item 27 of Form N-4 to include required 

exhibits under Regulation S-K that are generally not applicable to RILAs or would no longer be 

relevant in light of the proposed amendments.225 For example, RILA registration statements are 

currently required to include a filing fee exhibit. Under the proposed amendments, RILA issuers 

would no longer include registration fee payments as part a registration statement or post-

effective amendment filing. Therefore, the proposed amendments to Item 27 of Form N-4 omit 

this existing exhibit requirement for RILAs.226  

We are, however, proposing to amend Form N-4’s required exhibits list to add new Item 

27(p) for all issuers, which would require the filing of any power of attorney included pursuant 

to rule 483(b).227 While this exhibit is already required to be filed with a Form N-4 registration 

statement under rule 483(b), practices differ in regards to the placement of a required power of 

attorney exhibit within the exhibit list. This amendment is designed to assist the public in 

comparing these exhibits by standardizing their location in the registration statement. In addition, 

we are proposing conforming changes in Item 27 to reflect the proposed amendments to the 

definitions in Form N-4.  

 

224  See 17 CFR 229.601; proposed Item 27 of Form N-4.  
225  See 17 CFR 229.601; proposed Item 27 of Form N-4. For example, some items, like Item 601(b)(96) of 

Regulation S-K which requires a technical report summary to be filed as an exhibit to a registration 
statement on Form S-1 when a registrant discloses information concerning its mineral resources, are wholly 
inapplicable to RILAs. 

226  See 17 CFR 229.601(b)(107). 
227  RILA registration statements on Forms S-1 and S-3 similarly include a power of attorney, when applicable, 

to be filed as part of the registrations statement. See 17 CFR 229.601(b)(24). See also supra section II.D 
(discussing the addition of a new exhibit relating to changes in accountants). 



138 

Item 34 – Fee Representation and Undertakings 

We are also proposing amendments to Item 34 of Form N-4 to require RILA issuers to 

include specific undertakings in their registration statements on Form N-4. Under the proposed 

amendments, a RILA issuer would be required to furnish two undertakings as part of the 

registration statement on Form N-4. These undertakings are (1) to file, during any period in 

which offers or sales are being made, through a post-effective amendment to its registration 

statement, any prospectus required by section 10(a)(3) of the Securities Act and (2) that, for the 

purposes of determining liability under the Securities Act, each post-effective amendment shall 

be deemed to be a new registration statement relating to the securities offered therein, and the 

offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. 

These proposed undertakings are the same as two undertakings RILA issuers currently provide in 

registration statements,228 and mirror the effect of similar provisions of section 24(e) of the 

Investment Company Act, which applies to amendments to Form N-4 registration statements by 

registered separate accounts.229 We are proposing that RILA issuers continue to furnish these 

representations concerning post-effective amendments to a registration statement as, under the 

 

228  See rule 415(a)(3) and 17 CFR 229.512(a). Under the proposed amendments, RILAs would be exempt from 
the conditions of rule 415, including furnishing the required undertakings pursuant to Item 512(a) of 
Regulation S-K. See infra footnote 331. For example, RILA registration statements would no longer be 
required to include a statement that the issuer undertakes to file a post-effective amendment to reflect in the 
prospectus any facts or events arising after the effective date of the registration statement (or the most 
recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental 
change in the information set forth in the registration statement. We preliminarily believe this requirement 
is not necessary for RILA registration statements on Form N-4 in light of the other amendments we are 
making to the prospectus and registration statement filing process for RILAs. See infra section II.E 
(discussing proposed amendments to rules 485 and 497 under the Securities Act). 

229  See Section 24(e) of the Investment Company Act [15 U.S.C. 80a-24(e)]. Section 24(e) generally requires a 
registered separate account to amend its registration statement annually to update its prospectus for the 
purposes of section 10(a)(3). Section 24(e) also provides that, for the purposes of liability under Securities 
Act, the effective date of the latest amendment is deemed to be the effective date of the registration 
statement with respect to securities sold after the effectiveness of amendment. 



139 

proposed amendments, RILAs may be continuously offered on a registration statement for an 

indefinite amount of time. In that time, a RILA registration statement may be subject to a number 

of various post-effective amendments. Conversely, the proposed amendments do not include 

other undertakings which may be currently required in RILA registration statements. These 

undertakings relate to the process for conducting continuous offerings under rule 415, which 

RILAs will no longer be subject to under the proposed amendments. In addition, we are not 

including other undertakings that are unnecessary in light of the proposed amendments as a 

whole.230 For example, RILA issuers currently are required to include an undertaking to remove 

from registration any of the securities being registered that remain unsold at the termination of an 

offering through a post-effective amendment.231 However, under the proposed amendments, 

RILA issuers will be registering an indeterminate amount of securities and paying registration 

fee payments in arrears on amended Form 24F-2 for the life of an offering. Under this approach, 

a RILA issuer would only pay registration fees on the exact amount of net issuance of securities 

relating to an offering and therefore, it is unnecessary to additionally require an undertaking that 

relates to a surplus registration of securities during an offering.  

e) Request for Comment 

We request comment on these proposed amendments. 

78. Are the instructions for the proposed new section on the facing sheet appropriate? 

Should there be additional or different options for the proposed new section on the 

facing sheet? 

 

230  See 17 CFR 229.512(a).  
231  See 17 CFR 229.512(a)(3). 



140 

79. Are the definitions in Part A of the General Instructions of Form N-4 appropriate? 

If not, which definitions require additional clarity or modifications? For example, 

do commenters believe it is appropriate to use the collective term “registrant” to 

include insurance companies that may not be registered entities under the 

Securities Act? Do the definitions effectively convey which provisions apply to 

which type of annuity contract?  

80. Do commenters agree with the statement that “investor account” is not generally 

used in insurance company disclosures to investors relating to annuity contracts?  

81. Did we appropriately scope those provisions that practically only apply to variable 

options to those types of investment options? Are there any other disclosures we 

should limit to variable options? Conversely, are there provisions we limited to 

variable options that we should also apply to index-linked options? 

82. Should we add any additional definitions to Part A of the General Instructions to 

Form N-4? Should we retain the term “investor account”? 

83. Is the definition of “Index-Linked Option” appropriate? Should we revise the 

definition in any way? Does this definition encompass all potential RILAs and 

index-linked options offered in combination contracts as proposed as required by 

the RILA Act? 

84. Do commenters agree that the proposed definition of “registered index-linked 

annuity” in rule 405 is appropriate? Do commenters agree that the proposed 

definition is inclusive of the types of RILAs encompassed in the definition of 

“registered index-linked annuity” in the RILA Act?141 

85. Do commenters agree that with the proposed definition of “Form available solely 

to investment companies registered under the Investment Company Act of 1940?” 

Do commenters think this may cause confusion as RILA issuers are not investment 

companies registered under the Investment Company Act? 

86. Should we require RILA issuers to adhere to rules 480, 481, 483, and 484 when 

registering RILAs on Form N-4? 

87. Do commenters agree that the Exhibit List for proposed Form N-4 encompasses 

the types of exhibits that RILA issuers currently include in registration statements 

and is appropriate for RILAs? If not, what exhibit requirements should govern 

RILAs registered on Form N-4? Are there additional exhibits that RILA issuers 

should be required to file as part of their registration statements on Form N-4? Are 

there any exhibits that the integrated disclosure requirements of Regulation S-K 

currently include that we should require on Form N-4? 

88. Is it appropriate to require RILA issuers to furnish the undertakings in Item 34 of 

proposed Form N-4? Are there different or additional undertakings that should be 

required for these issuers?  

8. Remaining Form N-4 Items 

We propose to make applicable to RILAs the remaining requirements and disclosure 

items on the existing Form N-4 discussed below, which we do not propose to substantively 

change.232 The general instructions to the proposed form include both organizational 

requirements along with substantive requirements for the preparation of the registration 

 

232  As noted above, some of these items would be amended to account for changes in defined terms and to use 
gender-neutral terminology. See supra section II.B.7. 



142 

statement, including instructions relating to the organization, presentation, and prospectuses 

permitted to be included in a registration statement. The remaining disclosure items principally 

provide investors with information about the annuity contract and how it operates. In addition, 

these items provide basic information about the insurance company or the securities offering 

itself, consistent with some of the disclosures provided currently in Forms S-1 or S-3. 

a) General Instructions 

RILAs offerings registered on Form N-4 will need to comply with the general 

instructions of that form. These general instructions are structured to include four parts: (A) 

Definitions;233 (B) Filing and Use of Form; (C) Preparation of the Registration Statement; and 

(D) Incorporation by Reference.234 This would result in a number of substantive outcomes for 

those issuers.235 Specifically: 

• Plain English. The instructions provide a number of points to issuers on how best to 

promote effective communication between issuers and prospective investors. For 

example, issuers are directed to use document design techniques that promote 

effective communication and to respond to the items in the form as simply and 

directly as reasonably possible and avoid the use of formulas as the primary means of 

 

233  See supra section II.B.7(b) (discussing proposed amendments to the definitions used in the form). 
234  The items described in this section can generally be found in proposed General Instruction C of Form N-4. 

See also supra section II.B.[Other Amendments] (discussing definitional updates). EDGAR permits 
registrants to file required financial statements separately under a specific submission type. Thus, 
registrants may incorporate by reference into their post-effective amendment and other filings the financial 
statements filed under this EDGAR submission type. See VASP Adopting Release at n.592. 

235  We are also proposing to correct a typographical error in General Instruction B.2(b) regarding items that 
can be omitted for registration statements or amendments filed only under the Investment Company Act. 
Currently, the instructions state that issuers can omit from Part C Items 26(c), (k), (l), and (m), but those 
items do not exist in the form and Item 26 (Financial Statements) is in the SAI, not Part C. This is supposed 
to refer to Item 27 (Exhibits), which do exist, are in Part C, and are more Securities Act in nature. This 
instruction would be updated to refer instead to Item 27 as a result. 



143 

communicating certain terms or features of a contract.236 Issuers are also encouraged 

to use, as appropriate, Q&A formats beyond the KIT, tables, and other presentation 

methods in the form generally.237 

• Organization. Issuers are directed to organize information in the prospectus and SAI 

to make it easy for investors to understand, with some limitations on the order of 

presentation.238  

• Other information. Issuers are permitted to include (other than in Items 2 or 3) 

information in the prospectus or SAI not otherwise required as long as the additional 

information is not incomplete, inaccurate, or misleading and does not, because of its 

nature, quantity, or manner of presentation, obscure, or impede understanding of the 

information that is required. 239 In similar circumstances, issuers may include sales 

literature in the prospectus.240 

• Terminology. Issuers are required to define special terms used in the prospectus in 

any presentation that clearly conveys meaning to investors.241 Only these special 

terms must be defined or listed in any glossary or list of definitions elected to be 

used.242 Registrants are not required to use the same terminology as that used in the 

 

236  See proposed General Instructions C.1.(a) and (c) to Form N-4. This specific text is not intended to 
discourage use of a formula, but rather, to clarify that if a formula is used in connection with a term or 
feature, investors are first provided appropriate plain English disclosure regarding the operation of the term 
or feature. See VASP Adopting Release at n.591. 

237  See proposed General Instruction C.3.(c) to Form N-4. As discussed above, we are proposing to require 
Q&A formatted responses to the Key Information Table. See supra section II.B.2. 

238  See proposed General Instruction C.3.(b) to Form N-4. 
239  See proposed General Instruction C.3.(b) to Form N-4. 
240  See proposed General Instruction C.3.(g) to Form N-4. 
241  See proposed General Instruction C.3.(d) to Form N-4. 
242  Registrants are also permitted to define terminology only used in one section in such section.  



144 

form as long as the registrant clearly conveys the meaning of, or provides comparable 

information as, the form’s terminology. 

• Multiple Contracts. Issuers are permitted to describe multiple contracts that are 

essentially identical in a single prospectus, and the instructions discuss the 

presentation of information regarding multiple contracts in these circumstances.243 

Further, issuers are permitted to combine multiple prospectuses into a single 

registration statement where the contracts are substantially similar. 

• Timing. The instructions state that, consistent with Securities Act rules, in most 

circumstances prospectuses and SAIs used after the effective date of the registration 

statement shall be dated approximately as of such effective date, but that a revised or 

amended prospectus or SAI used thereafter need only bear the approximate date of its 

issuance. Each supplement to the prospectus or SAI shall be dated separately the 

approximate date of its first use.244 

• Provision of Websites. Any websites included in an electronic version of the 

prospectus must include active hyperlinks or other means of facilitating access that 

leads directly to the relevant website address, though this requirement does not apply 

to a prospectus filed on EDGAR.245 

• Incorporation by Reference. In addition to the general requirements of the 

Commission rules on incorporation by reference, issuers are not permitted to 

 

243  See proposed General Instruction C.3.(e) to Form N-4. The instructions state that “essentially identical” is a 
facts and circumstances-based determination but that contracts that differ in providing optional benefits or 
being group or individual contracts are not essentially identical whereas variances due only to State 
regulatory requirements would be. 

244  See proposed General Instruction C.3.(f) to Form N-4; 17 CFR 230.423. 
245  See proposed General Instruction C.3.(i) to Form N-4. 



145 

incorporate by reference information required to be in the prospectus unless otherwise 

permitted by the form, but may incorporate by reference the SAI into the prospectus 

without delivering the SAI and incorporate by reference information required to be 

included in the SAI or Part C.246 

Collectively, these general instructions are designed to require clear disclosure to 

investors about the variable annuity contracts currently registered on the form and to make clear 

how issuers must prepare and file their registration statements. Requiring RILA issuers to 

prepare their registration statements in accordance with these instructions would likewise 

facilitate the provision of clear disclosure to investors and provide clear direction to these issuers 

on how to prepare and file their registration statements. Further, applying these requirements to 

RILAs as proposed would help ensure the comparability of different annuity offerings, for 

example, by ensuring that the filings are held to the same plain English, multiple contract 

disclosure, timing, website, and incorporation by reference standards. 

b) Contract Disclosures 

The table below summarizes disclosures in the existing Form N-4 about the annuity 

contract, how it operates, and how it is serviced by the insurance company, that we propose 

making applicable to RILA issuers without substantive change.  

Table 4: Contract Disclosures 

Item Description 

Prospectus (Part A) 

 

246  Proposed General Instruction D of Form N-4. 



146 

Item Description 

General Description 
of the Contracts (Item 
8) 

A general description of the contract, including disclosure of the 
parties’ material rights under the contract; relevant contract provisions 
and limitations; contract obligations funded by the insurance 
company’s general account; class of purchasers, and material changes 
that can be made to the contract by the insurance company. 

Annuity Period (Item 
9) 

A description of the annuity options available, including a discussion 
of material factors that determine the benefits; annuity commencement 
date; frequency and duration of annuity payments; the effect of 
assumed investment return; any minimum amount necessary for an 
annuity option and the consequences of an insufficient amount; rights 
to change annuity options; and, if applicable, a disclosure that the 
investor will be unable to withdraw any contract value amounts after 
the annuity commencement date. 

Benefits Available 
Under the Contract 
(Item 10) 

A tabular summary overview of the benefits available under the 
contract (e.g., standard or optional death benefits, standard or optional 
living benefits, etc.), briefly discussing, among other things: whether 
the benefit is optional; current and maximum fees associated with the 
benefit; how the benefit amount is calculated; and any associated 
restrictions or limitations.  

Purchases and 
Contract Value (Item 
11) 

A description of the procedures for purchasing a contract, including 
concise explanations of minimum initial and subsequent purchase 
payment required, when these payments are credited, and how they 
are allocated to investment options. Also an identification of the 
principal underwriters (other than the insurance company) of the 
contracts and other information about that underwriter such as any 
affiliations. 

Surrenders and 
Withdrawals (Item 
12) 

A description of how surrenders and withdrawals can be made from a 
contract, including limits on the ability to surrender, how proceeds are 
calculated, and when surrenders and withdrawals are payable. Issuers 
must also describe potential effect of surrenders and withdrawals, 
including how they could affect a contract’s value or benefits, and 
whether any charges or contract adjustments will apply. Issuers should 
also describe any involuntary redemption provisions and any 
revocation rights, disclosing the calculation methodology and any 
associated limitations to investment options. 

Loans (Item 13) A description of the loan provisions of the contract, including, for 
example, loan availability and related restrictions, interest mechanics, 
the effect of a loan on the contract’s value and death benefit, other 
effects that a loan could have on a contract; and loan procedures. 



147 

Item Description 

Taxes (Item 14) A description of the material tax consequences to the investor and 
beneficiary of buying, holding, exchanging, or exercising rights under 
the contract. The description should include a discussion of the 
taxation of annuity payments, death benefit proceeds, periodic and 
non-periodic withdrawals, loans, and any other distribution that may 
be received under the contact, as well as the tax benefits accorded the 
contract and other material tax consequences. Issuers must identify the 
types of qualified plans for which the contracts are intended to be used 
and describe any effect of taxation on the determination of contract 
values. 

Statement of Additional Information (Part B) 
Cover Page and 
Table of Contents 
(Item 18) 

A statement of the name of the insurance company, the contract, and 
related class or classes. This item also requires a table of contents, a 
statement that the SAI is not a prospectus, information about how to 
obtain the prospectus, and a discussion of information the SAI 
incorporates by reference. 

Non-principal Risks 
of Investing in the 
Contract (Item 20) 

A summary of the non-principal risks of purchasing a contract not 
otherwise disclosed in the prospectus. 

Services (Item 21) Information on services provided to the registrant in connection with 
the contract. If not disclosed elsewhere, this requires a summary of the 
substantive provisions of certain management-related service 
contracts. The registrant must also provide the name and address of its 
independent public accountant. Where affiliates of the insurance 
company act as agents for the registrant in connection with the 
contract, issuers are required to provide specific information about the 
services performed and remuneration paid for the services. Issuers 
must also disclose if the insurance company is the principal 
underwriter of the contract. 

Annuity Payments 
(Item 25) 

A description of the method for determining the amount of annuity 
payments if not described in the prospectus and how any change in the 
amount of a payment after the first payment is determined. 

Other Information (Part C) 
Management Services 
(Item 33) 
 

A summary of the substantive provisions of any management-related 
service contracts not discussed in Parts A or B, including the last three 
years’ payment history.  

These requirements apply to existing Form N-4 issuers because these disclosures provide 

investors in these products with a concise presentation of material information about the annuity 

contract they would be purchasing, as well as other information that provides necessary context 



148 

about the contracts such as management service disclosures.247 Because disclosure of this 

information is equally fundamental to the ability of investors to make informed investment 

decisions about RILA contracts, we are proposing to apply these requirements to RILAs. For 

example, existing Form N-4 issuers are required to summarize standard and optional benefits 

available to the investor under the contract because these benefits are primary features of 

variable contracts and are also often key differentiators between competing products.248 

Insurance companies also offer these benefits in connection with RILAs.  

c) Issuer and Offering Disclosures 

In addition to disclosures about the contract, the proposed amendments to Form N-4 

would require that RILA issuers make certain disclosures relating to the issuer and offering 

consistent with the form’s current requirements. The table below summarizes these items, 

omitting items in Form N-4 that, by their terms, would not apply to RILAs. 

Table 5: Issuer and Offering Disclosures 

Item Description Similar Form S-1 
Disclosure 

Prospectus (Part A) 
Legal Proceedings 
(Item 15) 

A description of material pending legal 
proceedings to which the registered separate 
account, the principal underwriter, or the 
insurance company is a party, including similar 
information regarding any proceedings instituted 
or known to be contemplated by a governmental 
authority. 

Item 11(c) (legal 
proceedings) 

Statement of Additional Information (Part B) 

 

247  See Registration Forms for Insurance Company Separate Accounts That Offer Variable Annuity Contracts, 
Investment Company Act Release No. 14575 (June 24, 1985) [50 FR 26145 (June 25, 1985)] (“Forms N-3 
and N-4 Adopting Release”). 

248  See VASP Adopting Release at n.26 and accompanying text. 



149 

Item Description Similar Form S-1 
Disclosure 

General 
Information and 
History (Item 19) 

Basic information regarding the background and 
organization of the insurance company, including 
the jurisdiction in which it is organized and a 
description of its business. 

Item 11(a) 
(description of 
business) 

Underwriters (Item 
23) 

Identification of the principal underwriters (other 
than the insurance company), and for affiliated 
underwriters, a description of the nature of the 
affiliation. For each principal underwriter 
distributing the registrants’ contracts, the 
insurance company must provide information 
about the offering and related commissions. If the 
registrant made payments to an underwriter of or 
dealer in the contracts during its last fiscal year 
over a threshold amount, the registrant must 
disclose certain information about those 
payments. 

Item 8 (plan of 
distribution) 

Other Information (Part C) 
Directors and 
Officers of the 
Insurance 
Company (Item 28) 

A statement of the name, principal business 
address, position, and office held for each 
director or officer of the insurance company. 

Item 11(k) 
(directors and 
executive officers) 

Persons Controlled 
by or Under 
Common Control 
with the Insurance 
Company or the 
Registrant (Item 
29) 

Disclosure of persons directly or indirectly 
controlled by or under common control with the 
registrant or the sponsoring insurance company. 

Item 11(k) 
(directors and 
executive officers) 

Indemnification 
(Item 30) 

Information about the effect of relevant 
indemnification agreements, arrangements, or 
statutory provisions through which underwriters 
or affiliates are insured or indemnified against 
any liability incurred in their official capacity.  

Item 14 
(indemnification of 
directors and 
officers) 

Principal 
Underwriters (Item 
31) 

A statement of investment companies, other than 
any registered separate account related to the 
filing, each principal underwriter is also acting as 
a principal underwriter. More detailed 
information about principal underwriters 
identified in Item 23, such as recent information 
about commissions and other compensation 
received from the registrant by each principal 
underwriter. 

Item 8 (plan of 
distribution) 

 



150 

Information about the issuer and the offering process are relevant when purchasing an 

annuity contract, including in the context of a RILA.249 These items, which largely correspond to 

items currently required to be disclosed by RILAs on Forms S-1 and S-3 as detailed in the table 

above, provide the appropriate amount of information about the issuing insurance company and 

the offering of securities in a way tailored to annuity contract investors. For example, because an 

investor’s rights under RILAs are dependent on the insurance company’s claim-paying ability, 

RILA purchasers also share an interest in disclosures of material pending legal proceedings 

involving the insurance company or related parties. On the other hand, where Form S-1 

disclosures have less relevance to RILAs, we have not included those disclosures in proposed 

Form N-4. 

d) Request for Comment 

We request comment on our proposed application of these requirements and disclosures 

to RILAs.  

89. Is it appropriate to require RILA issuers to meet these general instructions of the 

form? Should we tailor any particular provision to account for the differences 

between RILAs and the variable annuities that currently use the form? For 

example, is there any reason to treat RILAs different for purposes of the 

“essentially identical” test? 

90. The investor testing results suggested that investors had significant difficulty in 

understanding certain terminology used in connection with RILAs, in particular the 

words “term” and “investment term.”250 Should we, as a result, change any 

 

249  See Forms N-3 and N-4 Adopting Release. 
250  See OIAD Report at Section 7, Conclusions, Summary of Findings. 



151 

instruction to aid in investor understanding? For example, the form currently 

provides that the prospectus disclosure requirements in Form N-4 are intended to 

elicit information for an average or typical investor who may not be sophisticated 

in legal or financial matters.251 In light of this feedback in investor testing, should 

we amend this instruction or otherwise provide that insurance companies should 

not use “term,” “investment term,” or other terminology that investors found 

confusing? Regardless of whether insurance companies use “investment term” or 

different terminology, in the glossary definition of the “investment term” (or 

another term to describe that concept) should insurance companies be required to 

specifically disclose to investors that the “investment term” is not the same as the 

life of the contract? As another example, should we require, rather than permit, the 

use of a glossary or list of definitions for the entirety of the form so that investors 

have one place to look to understand a particular term? Should we clarify what 

terms are “special terms”? What terminology in particular should be considered a 

special term in the RILA context?  

91. Should we define certain key terms that insurance companies must use in their 

registration statement to help to mitigate investor confusion and help investors 

compare one RILA to another? Which key terms should we address and how 

should they be defined?  

 

251  See Instruction C.1.b of Form N-4. 



152 

92. Is it appropriate, as proposed, to apply these exiting Form N-4 disclosure 

requirements to RILA issuers? Are any of these disclosure items inappropriate for 

including in a RILA registration? 

93. Are there other details about the RILA contract, not otherwise addressed above, 

that we should require be disclosed on amended Form N-4? Are there details 

regarding the issuer or offering that we should require? 

94. Certain of these disclosures are repeated throughout the registration statement. For 

example, similar disclosures regarding principal underwriters are contained in the 

prospectus (Item 11) and SAI (Item 23). Should we limit these items to a particular 

location in the registration statement? 

95. Under the proposal, certain information that RILA issuers currently provide on 

Forms S-1 and S-3 would still be required by Form N-4, but would be placed in the 

SAI rather than the prospectus. Should any of the information we propose to 

require in the SAI instead be provided in the prospectus? 

96. Are these items properly ordered? Should we move any of these items to greater 

prominence or move items from the prospectus, SAI, or Part C to another part of 

the registration statement?  

9. Inline XBRL 

We are proposing to require RILA issuers to tag certain of the information they would 

disclose in their prospectuses and SAIs in a structured, machine-readable data language. 

Specifically, we are proposing to require RILA issuers to tag the required information in Inline 

XBRL in accordance with Rule 405 of Regulation S-T (17 CFR 232.405) and the EDGAR Filer 



153 

Manual.252 The proposed requirements for RILA issuers would include tagging of the overview 

and more in-depth descriptions of index-linked options and contract adjustments that RILA 

issuers would have to include in their prospectuses under the proposal, the proposed disclosure 

of census-type information regarding contracts with index-linked options, and information 

disclosed about changes in and disagreements with accountants.253 RILA issuers, in addition to 

variable contracts issuers whose contracts offer fixed options, would have to tag the proposed 

descriptions of fixed options available under the contract.254 Form N-4 filers also would have to 

tag the proposed new disclosures indicating that the insurance company is relying on the 

exemption provided by rule 12h-7, and variable contract issuers would have to tag the proposed 

new statement relating to the risks of variable options.255  

In addition, RILA issuers would have to tag those prospectus disclosures that Form N-4 

currently requires to be tagged.256 These include the following disclosure items: the Key 

Information Table, Fee Table, Principal Risks of Investing in the Contract, Other Benefits 

Available Under the Contract, and Investment Options Available Under the Contract in the 

statutory prospectus. The proposed Inline XBRL requirements, like the current Inline XBRL 

 

252  This proposed tagging requirements would be implemented by amending General Instruction C.3(h) of 
Form N-4, and by revising rule 405(b) of Regulation S-T to include the proposed RILA-specific 
disclosures. Pursuant to rule 301 of Regulation S-T, the EDGAR Filer Manual is incorporated by reference 
into the Commission’s rules. In conjunction with the EDGAR Filer Manual, Regulation S-T governs the 
electronic submission of documents filed with the Commission. Rule 405 of Regulation S-T specifically 
governs the scope and manner of disclosure tagging requirements for operating companies and investment 
companies, including the requirement in rule 405(a)(3) to use Inline XBRL as the specific structured data 
language to use for tagging the disclosures. 

253  See proposed General Instruction C.3(h) of Form N-4; see also proposed Items 2(b)(2), 2(d), 6(d), 7(e), 
26(c), and 31A. 

254  See proposed General Instruction C.3(h) of Form N-4; see also proposed Item 6(e). 
255  See proposed General Instruction C.3(h) of Form N-4; see also proposed Items 6(a) (instruction) and 

6(c)(1). 
256  See rule 405(b) of Regulation S-T; proposed General Instruction C.3(h) of Form N-4; see also proposed 

Items 3, 4, 5, 10, and 17. 



154 

requirements for Form N-4 issuers, would only apply to contracts being sold to new investors. 

The result of this proposed approach would be that prospectus disclosure for contracts that are no 

longer being sold to new investors would not need to be tagged, as we believe tagging this 

disclosure would have less utility for current investors and other market participants.257 Issuers 

of variable annuities registered on Form N-4 are currently required to tag certain registration 

statement disclosure items using Inline XBRL.258 These items are those that would be most 

suited to being tagged in a structured format and be of greatest utility for investors and other data 

users that seek structured data to analyze and compare RILA contracts. This rationale is the same 

as that which the Commission articulated in originally adopting these tagging requirements in the 

context of variable annuity disclosure.259 

In addition to these existing items, requiring Inline XBRL tagging of the new disclosure 

requirements we are proposing to include in Form N-4 would benefit investors, other market 

participants, and the Commission by making the disclosures more readily available and easily 

accessible for aggregation, comparison, filtering, and other analysis.260 We chose these particular 

items in the form to structure—including those that issuers of variable annuities would newly 

have to structure—because we believe that they are the most salient to investors and benefit most 

from being structured. We believe that tagging this disclosure, along with the requirement for 

 

257  See VASP Adopting Release at paragraph accompanying n.904. 
258  See General Instruction C.3(h) of current Form N-4; see also Interactive Data to Improve Financial 

Reporting, Release No. 33-9002 (Jan. 30, 2009) [74 FR 6776], as corrected by Release No. 33-9002A (Apr. 
1, 2009) [74 FR 15666] (requiring operating companies to submit financial statements accompanying their 
registration statements and periodic and current reports in XBRL). 

259  See VASP Adopting Release at section II.E. 
260  See supra footnotes 253-255. These primarily include the proposed new disclosure items that are specific to 

RILAs, as opposed to extant Form N-4 disclosure items to which we are proposing incremental 
amendments to address RILAs along with variable annuities. 



155 

RILA issuers to tag the same other disclosure items that are currently tagged, would result in 

information being tagged that would best permit investors and other data users to analyze and 

compare RILAs. For example, this would enable automated extraction and analysis of 

descriptions of index-linked options available under the contract, information regarding the 

features of each currently offered index-linked option, and information regarding contract 

adjustments. This would allow investors and other market participants more efficiently to 

perform large-scale analysis and comparison across RILAs (including the index-linked options 

that different RILAs offer) and time periods. Similarly, the requirement to tag information about 

fixed options will permit the same type of analysis with respect to these investment options—

including comparing fixed options across contracts, as well as index-linked options, variable 

options, and fixed options offered under the same contract.  

As another example, census-type information about variable annuity contracts, which is 

parallel to the SAI disclosure we propose to require for contracts with index-linked options, is 

currently reported in structured data format.261 Requiring census-type information about 

contracts with index-linked options to be tagged in Inline XBRL would help the Commission and 

staff identify trends in insurance companies’ offerings of the contracts, similar to the tools the 

Commission and staff currently have to identify trends in the offering of variable annuity 

contracts. An Inline XBRL requirement also would facilitate other analytical benefits, such as 

more easily extracting and searching disclosures about annuities, and automatically comparing 

these disclosures against prior periods. 

 

261  See supra section II.B.I.A.6; see also Item F.14 of Form N-CEN. 



156 

We are proposing to require RILA issuers to submit Interactive Data Files as follows, 

consistent with the approach for issuers of variable annuities registered on Form N-4:  

• For most post-effective amendments, Interactive Data Files would have to be filed 

either concurrently with the filing, or in a subsequent amendment that is filed on or before the 

date that the post-effective amendment that contains the related information becomes 

effective;262 

• For initial registration statements (and post-effective amendments other than as 

described in the bullet immediately above), Interactive Data Files would have to be filed in a 

subsequent amendment on or before the date the registration statement or post-effective 

amendment that contains the related information becomes effective;263 and  

• For any form of prospectus filed pursuant to rule 497(c) or (e), Interactive Data Files 

would have to be submitted concurrently with the filing.264  

We anticipate that this approach would facilitate the timely availability of important 

information in a structured format for investors, investment professionals, and other data users 

yielding substantial benefits. For data aggregators responding to investor demand for the data, 

the availability of the required disclosures in the Inline XBRL format concurrent with filing or 

before the date of effectiveness would allow them to quickly process and share the data and 

related analysis with investors.  

 

262  See proposed General Instruction C.3(h)(i)(B) of Form N-4. This instruction relates to post-effective 
amendments filed pursuant to paragraph (b)(1)(i), (ii), (v), (vi), or (vii) of rule 485. 

263  See proposed General Instruction C.3(h)(i)(A) of Form N-4. This instruction relates to initial registration 
statements and post-effective amendments other than those filed pursuant to paragraph (b)(1)(i), (ii), (v), 
(vi), or (vii) of rule 485. 

264  See proposed General Instruction C.3(h)(ii) of Form N-4. 



157 

Like other issuers, RILA issuers could request temporary and continuing hardship 

exemptions for the inability to timely file electronically the Interactive Data File.265 

Request for Comments 

We request comment generally on the proposed amendments to require the use of Inline 

XBRL, and specifically on the following issues: 

97. Should we adopt rules that make the submission of structured data in the Inline 

XBRL format mandatory for RILA issuers? 

98. Is it appropriate that RILA issuers would have to tag the same disclosure items that 

variable annuity issuers tag? Why or why not? If RILA issuers were to be required 

to tag other disclosure items that are also applicable to variable annuities, should 

variable annuity issuers also be required to tag these same items? 

99. Is it appropriate that all Form N-4 filers would have to tag certain of the new 

disclosure items that we are proposing to add to Form N-4, in particular, proposed 

Items 2(b)(2), 2(d), 6(a) (instruction), 6(c)(1), 6(d), 6(e), 7(e), 26(c), and 31A of 

Form N-4? Should insurance companies not be required to tag any of these items, 

and if so, why not? Are there other proposed disclosure items that we should also 

require insurance companies to tag? If so, why? 

100. Is it appropriate that the approach for RILA issuers to submit Interactive Data 

Files be consistent with the current approach for issuers of variable annuities 

registered on Form N-4, as proposed? If not, what alternative approach would be 

more appropriate and why? Is it appropriate that, like variable annuities registered 

 

265  See rule 201 Regulation S-T (temporary hardship exemption) and rule 202 of Regulation S-T (continuing 
hardship exemption). 



158 

on Form N-4, the proposed Inline XBRL requirements for RILA issuers would 

apply only to contracts being sold to new investors? Do commenters agree that 

tagging the prospectus disclosure would have less utility for current investors and 

other market participants? 

101. Are any other amendments necessary or appropriate to require the submission of 

the proposed required information in Inline XBRL? If so, what are they? 

C. Option to Use a Summary Prospectus 

We are proposing to amend rule 498A to permit RILA issuers, as well as issuers of 

“combination contracts” offering a combination of index-linked options and variable options, to 

use a summary prospectus to satisfy statutory prospectus delivery obligations.266 Investors would 

continue to have access to the RILA statutory prospectus and other information about the RILA 

contract online, with paper or electronic copies of this information upon request.267 This 

proposed approach would provide parity between RILA issuers and issuers of variable annuities 

 

266  Section 5(b)(2) of the Securities Act makes it unlawful to carry or cause to be carried a security for 
purposes of sale or for delivery after sale “unless accompanied or preceded” by a prospectus that meets the 
requirements of section 10(a) of the Act. See section 10(a) of the Securities Act (generally requiring a 
prospectus relating to a security to contain the information contained in the registration statement). For 
purposes of this release, a prospectus meeting the requirements of a section 10(a) prospectus is referred to 
as a “statutory prospectus.” For purposes of this section, we refer to RILA contracts and combination 
contracts together as “RILA contracts.” 

267  To further effectuate the changes being proposed, we propose to exclude RILA offerings from the 
provisions of rule 172, which provides that a final prospectus will be deemed to precede or accompany a 
security for sale for purposes of Securities Act section 5(b)(2) as long as the final prospectus meeting the 
requirements of Securities Act section 10(a) is filed or the issuer will make a good faith and reasonable 
effort to file it with the Commission as part of the registration statement within the required rule 424 
prospectus filing timeframe. Consistent with registered investment companies and business development 
companies, RILA offerings would be subject to a separate framework governing communications with 
investors under the proposal. See supra section II.E; see also Offering Reform Release at section VI.B.1.b. 



159 

registered on Form N-4, which are permitted to use summary prospectuses to satisfy their 

prospectus delivery obligations.  

RILA Summary Prospectus Overview 

The current summary prospectus rule for variable contracts uses a layered disclosure 

approach designed to provide investors directly with key information relating to the contract’s 

terms, benefits, and risks in a concise and reader-friendly presentation, with more detailed 

information available elsewhere. We anticipate that the summary prospectus framework would 

improve investor understanding of RILA contracts, as the Commission similarly expressed when 

it adopted the summary prospectus rule for variable contracts.268 This proposed approach for 

RILA contracts builds on the Commission’s decades of experience with layered disclosure and 

rules permitting the use of summary prospectuses.269 The proposal also recognizes investors’ 

expressed preferences for concise and engaging disclosure of key information. Accordingly, we 

believe the proposed approach is consistent with the RILA Act’s mandate of designing 

 

268  See VASP Adopting Release at n.21 and accompanying text. 
269  See id.; see also Enhanced Disclosure and New Prospectus Delivery Option for Registered Open-End 

Management Investment Companies, Investment Company Act Release No. 28584 (Jan. 13, 2009) [74 FR 
4545 (Jan. 26, 2009)] (“2009 Summary Prospectus Adopting Release”); Tailored Shareholder Reports for 
Mutual Funds and Exchange-Traded Funds; Fee Information in Investment Company Advertisements, 
Investment Company Act Release No. 34731 (Oct. 26, 2022) [87 FR 72758 (Nov. 25, 2022)] (“Tailored 
Shareholder Reports Adopting Release”) (adopting rules incorporating a layered disclosure approach to 
open-end funds’ annual and semi-annual reports to shareholders). 



160 

disclosure requirements “with the goal of ensuring that key information is conveyed in terms that 

a purchaser is able to understand.”270 

The proposed amendments to rule 498A would broaden the scope of the rule to address 

RILA contracts.271 Under the proposed amendments, the rule’s conditions for relying on the rule 

to satisfy prospectus delivery obligations would be the same for RILA contracts as for variable 

contracts.272 These conditions include the requirements to send or give a summary prospectus to 

an investor no later than the time of the “carrying or delivery” of the contract security, as well as: 

(1) requirements for the contents that must be included in a summary prospectus, (2) limitations 

on binding a summary prospectus with other materials, and (3) requirements that the summary 

prospectus, statutory prospectus, and contract statement of additional information must be 

publicly accessible, free of charge, on a website in the manner that the rule specifies.  

The proposed amendments to rule 498A would involve the use of two distinct types of 

summary prospectuses for RILA contracts, employing the same approach the rule currently uses 

 

270  See VASP Adopting Release at n.20 and accompanying text; Tailored Shareholder Reports Adopting 
Release at nn.10, 11, and 29 and accompanying text; see also supra discussion following footnote 7. 

271  To facilitate this change, and to make the terminology used in rule 498A more consistent with certain terms 
used in the proposed amendments to Form N-4, we are also proposing a number of amendments to the 
rule’s definitions. Specifically, we would (1) amend the definitions to “Class,” “Contract,” Investment 
Option,” “Registrant,” “Variable Annuity Contract,” and “Variable Life Insurance Contract” to address 
RILA contracts, and/or to make changes to these definitions that correspond with amendments to certain 
definitions in Form N-4 (either definitions of these same terms in Form N-4, or definitions of other terms in 
Form N-4 that would otherwise affect the way these terms are defined in rule 498A); (2) add definitions for 
“Fixed Option,” “Index-Linked Option,” “Insurance Company,” “Registered Separate Account,” “RILA 
Contract,” and “Variable Option” consistent with their counterparts in the proposed Form N-4 
amendments; and (3) deleting the definition of “Depositor.” These changes are necessary to communicate 
the provisions of the rule that would be applicable to RILA and combination contracts. 

272  See proposed rule 498A(f). Rule 498A also provides that a communication relating to an offering registered 
on Form N-4 that a person sends or gives after the effective date of the registration statement (other than a 
prospectus that Section 10 of the Securities Act permits or requires) will not be deemed a prospectus under 
section 2(a)(10) of the Securities Act, under certain conditions. The proposed amendments to rule 498A 
would extend this provision to RILA contracts. See rule 498A(g). Under the proposed amendments, the rule 
498A provision addressing information that may be incorporated by reference into a summary prospectus 
also would apply the same to RILAs as it does to other contracts currently within the scope of the rule. See 
rule 498A(d).161 

for variable contracts. An “initial summary prospectus,” covering contracts offered to new 

investors, would include certain key information about the contract’s most salient features, 

benefits, and risks, presented in plain English in a standardized order. The rule amendments 

would also require “updating summary prospectuses” to be provided to existing investors in 

RILA contracts as a condition to relying on the rule. The updating summary prospectus would 

include a brief description of certain changes to the contract that occurred during the previous 

year, as well as a subset of the information required to appear in the initial summary prospectus. 

Certain key information about the index-linked options that the contract offers would be 

provided in both the initial summary prospectus and updating summary prospectus.273  

As under current rule 498A for variable contracts, the proposed use of summary 

prospectuses for RILA contracts would be voluntary. This would be appropriate to provide RILA 

issuers sufficient time to transition to a summary prospectus regime, as well as in recognition of 

the fact that there could be different relative benefits of using a summary prospectus for certain 

RILA issuers and investors in these contracts.274 Similar considerations informed the 

Commission’s decision to adopt a voluntary summary prospectus regime for variable 

contracts.275 

 

273  This proposed approach is consistent with the approach for information about variable options in variable 
contracts’ summary prospectuses, in which certain key information about the portfolio companies offered 
as variable options appears in both the initial summary prospectus and updating summary prospectus. See 
proposed rule 498A(b)(5)(ix); proposed rule 498A(c)(6)(iv). 

274  The Commission similarly discussed the relative benefits to variable contract issuers of using a summary 
prospectus, based on the types of products that these issuers offer and the length of their current 
prospectuses, as well as the benefit of more concise disclosure to investors, in adopting rule 498A. See, 
e.g., VASP Adopting Release at section IV.E.1 (discussion in the Economic Analysis section of the release, 
addressing the Commission’s consideration of mandating summary prospectuses for variable contracts). 

275  See VASP Adopting Release at discussion accompanying nn.41-45; see also infra section III.C.1.c 
(discussing that different issuers and investors could expect to benefit differently from this optional 
prospectus delivery regime, although we expect a majority of RILA issuers to choose to use summary 
prospectuses and that therefore the majority of RILA investors will have the option to use both summary 
 



162 

Initial Summary Prospectus 

As under the current rule 498A, an initial summary prospectus for a RILA contract may 

only describe a single contract that the RILA issuer currently offers for sale.276 An initial 

summary prospectus may describe more than one class of a currently offered contract.277 

Aggregating disclosures for multiple contracts, or currently offered and no-longer-offered 

features and options of a single contract, can hinder investors from distinguishing between 

contract features and options that apply to them and those that do not. As a result, an initial 

summary prospectus could simplify and consolidate lengthy and complex disclosures. The 

content and ordering of items is designed to highlight aspects of a RILA contract that may not be 

emphasized in marketing materials and other disclosures.  

Like other summary prospectuses that rule 498A addresses, we are proposing a 

standardized presentation for RILA initial summary prospectuses to require certain disclosure 

items that we believe would be most relevant to investors to appear at the beginning of the initial 

summary prospectus, followed by supplemental information.278 The required presentation could 

also facilitate comparisons of different RILA contracts, as well as comparisons between RILA 

contracts and variable annuities. An initial summary prospectus must contain the information 

required by the rule, and only that information, in the order specified by the rule.279 The 

 

prospectuses and statutory prospectuses in their decision-making, in whatever proportion investors think is 
best for their preferences). 

276  See proposed rule 498A(b)(1). 
277  The definition of the term “class” in the proposed amendments is the same as the definition in the current 

rule (that is, as a class of a contract that varies principally with respect to distribution-related fees and 
expenses). Proposed rule 498A(a). 

278  See VASP Adopting Release at paragraph accompanying nn.58-59. 
279  Proposed rule 498A(b)(5). 



163 

information would be required to appear in the same order, and under relevant corresponding 

headings, as the rule specifies. 

The chart in Table 6 below outlines the information that we propose to require to appear 

in an initial summary prospectus for a RILA contract. We would not change these content 

requirements, with the exception of the ordering of the Overview of the Contract and KIT 

disclosures, from the current variable annuity requirements. The Commission has historically 

viewed these items as providing annuity investors with key information relating to a contract’s 

terms, benefits, and risks in a concise and reader-friendly presentation, and highlighting aspects 

of the contract that may not be emphasized in marketing materials and other disclosures.280 We 

preliminarily believe that this rationale is equally true in the context of RILA disclosure. Further, 

as discussed above, we propose that the Overview of the Contract disclosures (currently Item 3 

of Form N-4, but proposed to be re-numbered as Item 2) should precede the KIT (currently Item 

2 of Form N-4, but proposed to be re-numbered as Item 3), due to the context that the Overview 

section provides and based upon our experience with the form [and taking into account the 

results of investor testing].281 This change would be reflected in the requirements of rule 

498A.282 Otherwise, the same order of disclosures would be provided as under the current rule. 

 

280  See VASP Adopting Release at nn. 47-48 and accompanying text. To the extent that these content 
requirements are unchanged from the content requirements for variable annuity summary prospectuses, our 
rationale for these requirements has not changed from the rationale that is discussed throughout the sections 
of the VASP Adopting Release that address each of the content items discussed in Table 6 below. See 
VASP Adopting Release at section II.A.1.c. Further, we provide our reasoning as to why these particular 
disclosures are important to investors in the RILA context as a general matter in section II.B, supra. 

281  See supra section II.B.I.A.2. 
282  Currently, rule 498A requires issuers to place “Important Information You Should Consider About the 

[Contract]” disclosures before “Overview of the [Contract] disclosures.” 



164 

Table 6: Outline of the Initial Summary Prospectus 

 Heading in Initial 
Summary 
Prospectus 

Relevant 
Paragraph in 
Proposed 
Amendments to 
Rule 498A 

Item of 
Form  
N-4 (as 
proposed 
to be 
amended) 

Applicable 
to RILA 
Contracts?  

Applicable to 
Variable 
Annuities 
Registered on 
Form N-4?  

Cover 
Page 

Identifying 
Information (front 
cover page)[1]  

Rule 
498A(b)(2)(i) 
through (iv) 

-   

Legends (front 
cover page)[2] 

Rule 
498A(b)(2)(v) 

-   

EDGAR Contract 
Identifier (back 
cover page) 

Rule 
498A(b)(3) 

-   

Table of Contents 
(optional) 

Rule 
498A(b)(4) 

-   

Content Overview of the 
[Contract] 

Rule 
498A(b)(5)(ii) 

2  
(each 
paragraph of 
Item 2, as 
applicable) 

 
(each 
paragraph of 
Item 2 except 
(b)(2) and (d), 
which are 
generally only 
applicable to 
RILA 
contracts) 

Important 
Information You 
Should Consider 
About the [Contract] 

Rule 
498A(b)(5)(i) 

3  
(with line 
items 
applicable to 
RILA 
contracts, as 
specified in 
instructions 
to Item 3) 

 
(with line 
items 
applicable to 
variable 
annuities, as 
specified in 
instructions to 
Item 3) 

Benefits Available 
Under the [Contract] 

Rule 
498A(b)(5)(iv) 

10(a)   

Buying the 
[Contract] 

Rule 
498A(b)(5)(v) 

11(a)   

Making 
Withdrawals: 
Accessing the 

Rule 
498A(b)(5)(vii) 

12(a)   



165 

 Heading in Initial 
Summary 
Prospectus 

Relevant 
Paragraph in 
Proposed 
Amendments to 
Rule 498A 

Item of 
Form  
N-4 (as 
proposed 
to be 
amended) 

Applicable 
to RILA 
Contracts?  

Applicable to 
Variable 
Annuities 
Registered on 
Form N-4?  

Money in Your 
[Contract] 
Additional 
Information About 
Fees 

Rule 
498A(b)(5)(viii) 

4    

Appendix: 
[Investment 
Options/Portfolio 
Companies] 
Available Under the 
Contract 

Rule 
498A(b)(5)(ix) 

17   
(Item 17(b) 
and 17(c), as 
applicable) 

 
(Item 17(a) 
and 17(c), as 
applicable) 

Notes to Table 6: 
 
[1]: The beginning or front cover page of a RILA contract’s initial summary prospectus, like the initial summary 
prospectus of a variable annuity registered on Form N-4, would need to include the following information: (1) the 
insurance company’s name; (2) the name of the contract, and the class or classes if any, to which the initial summary 
prospectus relates; (3) a statement identifying the document as a “Summary Prospectus for New Investors”; and (4) 
the approximate date of the first use of the initial summary prospectus. 
 
[2]: The required legends would be the same for RILA contracts and for variable annuities registered on Form N-4. 
These legends address the purpose of the summary prospectus, the availability of the statutory prospectus and other 
information, information regarding the permitted cancellation period for the contract, and a statement that additional 
information about RILA contracts has been prepared by Commission staff and is available at investor.gov. The 
initial summary prospectuses for RILA contracts as well as variable annuities also would have to include the 
additional statements that we are proposing to require on the cover page of the prospectus for all Form N-4 issuers. 
See supra section II.B.1; see also proposed Item 1(a)(6)-(8) of Form N-4. 

A RILA initial summary prospectus would be permitted to include a table of contents. A 

table of contents must show the page number of the various sections or subdivisions of the 

summary prospectus, and immediately follow the cover page in any initial summary prospectus 

delivered electronically.  

The topics of the contents included in an initial summary prospectus—as well as the 

required headings under which these contents must appear—are the same for a RILA contract 

summary prospectus as for a summary prospectus of a variable annuity registered on Form 



166 

N-4.283 Further, certain of these required contents would vary in substance to reflect the unique 

aspects of RILA contracts as compared to variable annuities. These are indicated in Table 1 

above and include:  

• Disclosure provided under the heading “Overview of the Contract” (Item 2 of Form 

N-4), where disclosure for RILA contracts must include specific information about 

index-linked options currently offered under the contract, as well as interim value 

adjustments or market value adjustments that could affect an investor’s contract 

value;  

• Disclosure provided under the heading “Important Information You Should Consider 

About the Contract” (Item 3 of Form N-4), where certain rows in the required table 

are specific to RILA contracts as opposed to variable annuities;  

• Disclosure provided under the heading “Additional Information About Fees” (Item 4 

of Form N-4), where the requirements for fee information for RILA contracts differ 

from the parallel requirements for variable annuities (reflecting that RILA contracts 

generally do not entail annual contract expenses, but there are other costs associated 

with an investment in a RILA contract); and  

• Disclosure under the heading “Appendix: Investment Options Available Under the 

Contract” (Item 17 of Form N-4), where a RILA contract would include a different 

summary table for index-linked options offered under the contract than the summary 

table of variable options offered under a variable annuity.  

 

283  Proposed rule 498A(b)(5). 



167 

Each of these disclosure items, which would also appear in a RILA statutory prospectus, is 

discussed in more detail in section II.B above.  

Updating Summary Prospectus 

As under current rule 498A, RILA issuers would not send an updated initial summary 

prospectus to investors each year. Instead, any RILA issuers would send an updating summary 

prospectus, which would provide a brief description of certain changes with respect to the 

contract that occurred within the prior year.284 This would allow investors to focus their attention 

on new or updated information relating to the contract. Additionally, the updating summary 

prospectus would include certain of the items required in the initial summary prospectus that are 

most likely to entail contract changes and where any such contract changes are most likely to be 

important to investors because they affect how investors evaluate RILA contracts and are 

relevant to investors when considering additional investment decisions or otherwise monitoring 

their contracts. This is consistent with the Commission’s approach for variable annuity updating 

summary prospectuses.285 

Because the initial summary prospectus is designed for someone making an initial 

investment decision, we believe that existing RILA investors would benefit more from receiving 

 

284  A RILA issuer, like a variable annuity issuer, could only use an updating summary prospectus if it uses an 
initial summary prospectus for each currently offered contract described under the contract statutory 
prospectus to which the updating summary prospectus relates. Proposed rule 498A(c)(1). See also VASP 
Adopting Release at n.209 and accompanying text. 

285  See VASP Adopting Release at section II.A.2.a. As discussed above, the policy rationale for content 
requirements that would be the same among updating summary prospectuses for RILA contracts and 
variable annuity contracts—as well as the rationale for the location of these contents—is the same as that 
which the Commission articulated in adopting rule 498A. To the extent that these content requirements are 
unchanged from the content requirements for variable annuity summary prospectuses, our rationale for 
these requirements has not changed from the rationale that is discussed throughout the sections of the 
VASP Adopting Release that address each of the content items discussed in Table 7 below. See VASP 
Adopting Release at section II.A.2.c. Further, we provide our reasoning as to why these particular 
disclosures are important to investors in the RILA context as a general matter in section II.B, supra. 



168 

a shorter-form document including a brief summary of the changes to the contract, than from 

receiving the initial summary prospectus year after year.286 This approach also takes into account 

the cost to maintain and update separate initial summary prospectuses for currently offered 

contracts and those no longer offered.  

Unlike an initial summary prospectus, which could describe only a single contract that a 

RILA issuer currently offers for sale, an updating summary prospectus for a RILA could 

describe one or more contracts covered in the statutory prospectus to which the updating 

summary prospectus relates, as under current rule 498A.287 Similar to the initial summary 

prospectus, an updating summary prospectus could also describe more than one class of a 

contract.  

Updating summary prospectuses for RILA contracts, like initial summary prospectuses, 

would include specific disclosure items appearing in a prescribed order, under relevant 

corresponding headings.288 An updating summary prospectus for a RILA contract would have to 

contain the information required by the rule, and only that information, in the order specified by 

the rule. The chart in Table 7 below outlines the information that we propose to require to appear 

in an updating summary prospectus for a RILA contract.  

 

286  The Commission discussed this rationale when it initially adopted rule 498A. See VASP Adopting Release 
at section II.A.2.a. 

287  Proposed rule 498A(c)(2); see also VASP Adopting Release at nn.342-343 and accompanying paragraph.  
288  Proposed rule 498A(c)(6). 



169 

Table 7: Outline of the Updating Summary Prospectus 

 Heading in Updating 
Summary Prospectus 

Relevant 
Paragraph in 
Proposed 
Amendments to 
Rule 498A 

Item of 
Amended 
Form  
N-4 

Applicable to 
RILA 
Contracts?  

Applicable to 
Variable 
Annuities 
Registered on 
Form N-4?  

Cover 
Page 

Identifying 
Information (front 
cover page)[1] 

Rule 
498A(c)(3)(i) 
through (iv) 

-   

Legends (front cover 
page)[2] 

Rule 
498A(c)(3)(v) 

-   

EDGAR Contract 
Identifier (back cover 
page) 

Rule 
498A(c)(4) 

-   

Table of Contents 
(optional)[3] 

Rule 
498A(c)(5) 

-   

Content Updated Information 
About Your Contract 

Rule 
498A(c)(6)(i) 
through (ii) 

   

Important 
Information You 
Should Consider 
About the [Contract] 

Rule 
498A(c)(6)(iii) 

3  
(with line 
items 
applicable to 
RILA 
contracts, as 
specified in 
instructions 
to Item 3) 

 
(with line items 
applicable to 
variable 
annuities, as 
specified in 
instructions to 
Item 3) 

Appendix: 
[Investment 
Options/Portfolio 
Companies] 
Available Under the 
Contract 

Rule 
498A(c)(6)(iv) 

17   
(Item 17(b) 
and 17(c), as 
applicable) 

 
(Item 17(a) and 
17(c), as 
applicable) 

Notes to Table 7 
 
[1]: The beginning or front cover page of a RILA contract’s updating summary prospectus, like the updating 
summary prospectus of a variable annuity registered on Form N-4, would need to include the following information: 
(1) the insurance company’s name; (2) the name of the contract(s), and the class or classes if any, to which the 
updating summary prospectus relates; (3) a statement identifying the document as an “Updating Summary 
Prospectus”; and (4) the approximate date of the first use of the updating summary prospectus. 
 
[2]: The required legends would be the same for RILA contracts and for variable annuities registered on Form N-4. 
These legends address the purpose of the summary prospectus, the availability of the statutory prospectus and other 
information, and a statement that additional information about RILA contracts has been prepared by the SEC staff 
and is available at investor.gov. The updating summary prospectuses for RILA contracts as well as variable annuities 
also would have to include the additional statements that we are proposing to require on the cover page of the 



170 

 Heading in Updating 
Summary Prospectus 

Relevant 
Paragraph in 
Proposed 
Amendments to 
Rule 498A 

Item of 
Amended 
Form  
N-4 

Applicable to 
RILA 
Contracts?  

Applicable to 
Variable 
Annuities 
Registered on 
Form N-4?  

prospectus for all Form N-4 issuers. See supra section II.B.1; see also proposed Item 1(a)(6) through (8) of Form N-
4. 
 
[3]: The requirements for this optional table of contents would be the same for an updating summary prospectus as 
for an initial summary prospectus. See proposed rule 498A(b)(4); proposed rule 498A(c)(5). 

The updating summary prospectus for a RILA contract would be required to include a 

concise description of certain changes to the contract made after the date of the most recent 

updating summary prospectus or statutory prospectus that was sent or given to investors. These 

changes would appear under the heading “Updated Information About Your Contract,” with a 

required legend following the heading.289 The changes that the rule would require a RILA issuer 

to describe include those that relate to: (1) the availability of investment options under the 

contract; (2) the overview of the contract; (3) the KIT; (4) certain information about fees; (5) 

benefits available under the contract; (6) purchases and contract value; and (7) surrenders and 

withdrawals. The updating summary prospectus also could include a concise description of any 

other changes that the RILA issuer wishes to disclose, provided they occurred within the same 

time period as the other changes the rule would require the issuer to describe. In providing a 

concise description of a contract-related change in the updating summary prospectus, RILA 

issuers would have to provide enough detail to allow investors to understand the change and how 

it will affect them.290 

 

289  The legend would be the same for RILA contracts and variable annuities: “The information in this 
Updating Summary Prospectus is a summary of certain [Contract] features that have changed since the 
Updating Summary Prospectus dated [date]. This may not reflect all of the changes that have occurred 
since you entered into your [Contract].” Proposed rule 498A(c)(6)(i)(A). 

290  Proposed rule 498A(c)(6)(i)(B); see also VASP Adopting Release at paragraph accompanying n.374. 



171 

The topics for which a change would necessitate a description in the updating summary 

prospectus would be the same for RILA contracts as for variable annuities registered on Form 

N-4. We do not anticipate that disclosures addressing these topics in a contract statutory 

prospectus would change frequently, and thus providing investors with a notice and a brief 

description of any changes that do occur may be more informative than repeating all the 

disclosures each year.291 Despite the infrequency of changes, investors should be notified of any 

changes to these items given their importance to the investor’s experience of investing in a RILA 

contract.292  

We are proposing to amend rule 498A to specify that, in the context of a RILA contract 

updating summary prospectus, the change of availability of investment options includes a change 

to any of the features of the index-linked options disclosed in the table that Item 17(b) of Form 

N-4 requires (that is, the table in the appendix of investment options that will appear in a RILA 

contract summary prospectus).293 When the Commission adopted rule 498A, it stated that a 

change that has affected availability of portfolio companies (or investment options) includes 

changes in the portfolio companies (or investment options) offered under the contract or 

available in connection with any optional benefit.294 In the context of index-linked options, any 

change to the features of the index-linked options that the required table would describe—that is, 

the index, type of index, crediting period, index crediting methodology, limit on index loss, 

and/or guaranteed minimum limit on index gain—would meaningfully change the investor’s 

 

291  See VASP Adopting Release at paragraph following n.372. 
292  See id. at paragraph accompanying nn.365-369. 
293  Proposed rule 498A(c)(6)(i). 
294  VASP Adopting Release at n.361.  



172 

experience of investing in a RILA contract with the index-linked option that investor had 

previously chosen. For this reason, under the proposed amendments a change to any of these 

features would represent a change in the availability of the investment options that the RILA 

contract offers. 

The topics of the additional contents included in an updating summary prospectus—as 

well as the required headings under which these contents must appear—would be the same for 

RILA contracts and for variable annuities registered on Form N-4.295 Certain of these required 

contents, however, would vary in substance to reflect the unique aspects of RILA contracts as 

compared to variable annuities. These are indicated in Table 2 above and include:  

•  Disclosure provided under the heading “Important Information You Should Consider 

About the Contract” (Item 3 of Form N-4), where certain rows in the required table 

are specific to RILA contracts as opposed to variable annuities; and 

• Disclosure under the heading “Appendix: Investment Options Available Under the 

Contract” (Item 17 of Form N-4), where a RILA contract would include a different 

summary table for index-linked options offered under the contract than the summary 

table of variable options offered under a variable annuity.  

Online Accessibility of Contract Statutory Prospectus and Certain Other  

Documents Relating to the Contract 

Investors who receive a RILA contract initial or updating summary prospectus would 

have access to more detailed information about the RILA contract, either by reviewing the 

information online, or by requesting the information to be sent in paper or electronically. In this 

 

295  Proposed rule 498A(c)(6). 



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respect, the proposed amendments would include the same requirements for RILA contracts as 

for variable contracts. These requirements further the layered disclosure framework that rule 

498A creates for variable contracts and would, under the proposed amendments, similarly create 

for RILA contracts. Those insurance companies that issue RILAs, to the extent that they also 

issue variable annuity contracts that use summary prospectuses under rule 498A, therefore 

should be generally familiar with the practice of making this information available online and be 

able to integrate it with existing processes for variable annuities. Similar to what the Commission 

expressed in the context of variable annuity summary prospectuses, permitting RILA investors to 

access the contract statutory prospectus in several ways (online and by physical or electronic 

delivery) would maximize the accessibility and usability of this information and that investors 

have historically indicated a preference for both online and paper resources.296  

Under the proposed amendments, a RILA issuer relying on rule 498A (like a variable 

annuity issuer relying on this rule currently), would have to make the contract’s current initial 

summary prospectus, updating summary prospectus, statutory prospectus, and SAI (together, the 

“required online contract documents”) available online.297 These required online contract 

documents would be required to be publicly accessible, free of charge, at the website address that 

the cover page of the summary prospectus specifies, on or before the time that the person relying 

 

296  See VASP Adopting Release at n.417 and accompanying text; and Office of Investor Education and 
Advocacy of the U.S. Securities and Exchange Commission, Study Regarding Financial Literacy Among 
Investors (Aug. 2012), available at https://www.sec.gov/news/studies/2012/917-financial-literacy-study-
part1.pdf, at iv, xix. These proposed requirements are unchanged from the requirements for variable 
annuity summary prospectuses, and our rationale for these requirements has not changed from the 
Commission’s rationale that is discussed throughout the sections of the VASP Adopting Release that 
discuss online accessibility requirements. See VASP Adopting Release at sections II.A.5 and II.A.6. 

297  For proposed requirements relating to the required online contract documents, see generally proposed rule 
498A(h). 

https://www.sec.gov/news/studies/2012/917-financial-literacy-study-part1.pdf
https://www.sec.gov/news/studies/2012/917-financial-literacy-study-part1.pdf


174 

on the rule provides the summary prospectus to investors.298 The website address on which the 

required online contract documents appear must be specific enough to lead investors directly to 

the documents, although the website could be a central site with prominent links to each 

document.299 The required online contract documents would have to be presented in a manner 

that is human-readable and capable of being printed on paper in human-readable format, and 

persons accessing the documents must be able to permanently retain electronic versions of the 

documents. The proposed amendments include requirements for linking within the electronic 

versions of the contract statutory prospectus and SAI that are available online, and also for 

linking between electronic versions of contract summary and statutory prospectuses that are 

available online.  

Both initial summary prospectuses and updating summary prospectuses for RILA 

contracts would, like variable annuity summary prospectuses, be required to define any “special 

terms” elected by the registrant, using any presentation that clearly conveys their meaning to 

investors.300 In RILA contract summary prospectuses that are available online, the proposed 

amendments (like the current rule) require that investors be able either to view the definition of 

each special term upon command, or to move directly back and forth between each special term 

and the corresponding entry in any glossary or list of definitions the summary prospectus 

includes. 

 

298  A current version of each of the required online contract documents would have to remain available for at 
least 90 days following either: (1) the time of the “carrying or delivery” of the contract security if a person 
is relying on the rule to satisfy its section 5(b)(2) prospectus delivery obligations; or (2) if a person is 
relying on the rule to send communications that will not be deemed to be prospectuses, the time that the 
person sends or gives the communication to investors. Proposed rule 498A(h)(1). 

299  Proposed rule 498A(b)(2)(v)(B). 
300  Proposed rule 498A(e). 



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Satisfying each of these requirements regarding online accessibility of contract statutory 

prospectuses and certain other documents relating to the contract is a condition for a RILA issuer 

to rely on rule 498A to satisfy prospectus delivery obligations.301 Failure to comply with any of 

these conditions could result in a violation of section 5(b)(2) unless the contract statutory 

prospectus is delivered by means other than reliance on the rule. We recognize, however, that 

there may be times when, due to events beyond a person’s control, the person may temporarily 

not be in compliance with the rule’s conditions regarding the availability of the required online 

contract documents. The proposed amendments, like the current rule, includes a safe harbor 

provision addressing temporary noncompliance.302  

Other Requirements for Summary Prospectus and Other Contract Documents  

Like current rule 498A, the proposed amendments to rule 498A include additional 

requirements for RILA contract summary prospectuses. 303 These include:  

• Certain requirements relating to the delivery of paper or electronic copies of the required 

online contract documents upon request; 

• The requirement that a contract summary prospectus must be given greater prominence 

than any materials that accompany the contract summary prospectus;  

 

301  Proposed rule 498A(f)(4); proposed rule 498A(g)(4). 
302  Proposed rule 498A(h)(4). This provides that the conditions regarding the availability of the required online 

contract documents will be deemed to be met, even if the required online contract documents are 
temporarily unavailable, provided that the person has reasonable procedures in place to ensure that those 
materials are available in the required manner. A person relying on the rule to satisfy prospectus delivery 
obligations is required to take prompt action to ensure that those materials become available in the manner 
required as soon as practicable following the earlier of the time when the person knows, or reasonably 
should have known, that the documents were not available in the manner required. 

303  For these additional proposed requirements, see generally proposed rule 498A(i). 



176 

• Requirements that: (1) the required online documents be presented in a format that is 

convenient for reading and printing, and (2) a person be able to retain electronic versions 

of these documents in a format that is convenient for reading and printing; and 

• The requirement for any website address that is included in an electronic version of the 

summary prospectus to be an active hyperlink. 

Failure to comply with these additional requirements would not, however, negate a person’s 

ability to rely on the rule to satisfy prospectus delivery obligations. 

Request for Comments 

We request comment on the proposed amendments to rule 498A, which would permit 

RILA issuers to use a summary prospectus to satisfy statutory prospectus delivery obligations: 

102. Is it appropriate to permit RILA issuers, as well as issuers of “combination 

contracts,” to use a summary prospectus to satisfy statutory prospectus delivery 

obligations? Why or why not?  

103. Would the current rule 498A framework, which provides for an initial summary 

prospectus and an updating summary prospectus, be appropriate for RILA 

contracts?  

104. Is it appropriate that the use of summary prospectuses for RILA contracts be 

voluntary, as proposed? Should the use of summary prospectuses for RILA 

contracts instead be mandatory? 

105. Should an initial summary prospectus for a RILA contract only describe a single 

contract that the RILA issuer currently offers for sale, as proposed? Instead should 

we permit an initial summary prospectus to describe more than one contract? Do 



177 

commenters recommend any other changes to the proposed scope requirements for 

initial summary prospectuses for RILA contracts?  

106. Is the proposed presentation for RILA initial summary prospectuses appropriate, 

or should we modify the initial summary prospectus presentation requirements in 

any way? 

107. Are the proposed summary prospectus cover page requirements appropriate? For 

example, is it appropriate that initial (and updating) summary prospectuses for 

RILA contracts as well as variable annuities also would have to include the 

additional statements that we are proposing to require on the cover page of the 

prospectus for all Form N-4 issuers? 

108. Do the proposed RILA initial summary prospectus content items represent the 

disclosure that would best highlight the key terms, benefits, and risks of a RILA 

contract? Do the proposed content items capture key considerations that a typical 

contract investor would find salient? Should an initial summary prospectus include 

additional information an investor would need in order to make an informed 

investment decision, and if so, what would this information be? For example, is 

there any information we are proposing to include in Item 6 of Form N-4 that we 

should include in the summary prospectus? Alternatively, should we exclude or 

modify any of the proposed initial summary prospectus disclosure requirements? 

To the extent that commenters suggest changes that would result in different 

content across initial summary prospectuses for RILA contracts versus variable 

annuities, why would such changes be appropriate, and how should we address 



178 

these suggested changes in the context of “combination contracts” offering a 

combination of index-linked options and variable options?  

109. Under the proposal, would initial summary prospectuses for RILA contracts, on 

average, be longer, shorter, or about the same length as variable annuity initial 

summary prospectuses? What would account for any meaningful differences in 

average length? 

110. Is the proposed updating summary prospectus approach appropriate for existing 

RILA investors? Do commenters agree that existing RILA investors would benefit 

more from a brief summary of the changes to the contract reflected in the statutory 

prospectus than from receiving all of the disclosures in the initial summary 

prospectus? Instead should existing RILA investors receive a summary prospectus 

akin to the initial summary prospectus year after year? 

111. Should we permit, as proposed, an updating summary prospectus for a RILA 

contract to describe one or more contracts covered in the related statutory 

prospectus? Do commenters recommend any other changes to the proposed scope 

requirements for updating summary prospectuses for RILA contracts?  

112. We request comment on the proposed requirement to include a brief description 

of certain contract-related changes in the updating summary prospectus. Would 

this disclosure requirement be useful to investors? Is the scope of changes that a 

RILA issuer would be required to discuss appropriate? Are there other topics about 

which we should require a RILA issuer to describe a change? Should we define a 

change in the availability of investment options that would require disclosure as a 

change to any of the features of the index-linked options that the table that Item 



179 

17(b) of Form N-4 would require, as proposed? If not, what definition would be 

more appropriate and why? 

113. Do the other proposed RILA contract updating summary prospectus content items 

represent the disclosure that would be most appropriate and useful for existing 

investors, for example in considering whether to continue making additional 

purchase payments or reallocate contract value? If not, what alternative disclosure 

should we require? 

114. Should rule 498A include, as proposed, the same requirements with respect to 

online accessibility of a RILA contract statutory prospectus and certain other 

documents relating to the contract as the rule provides for variable annuities 

(including, as described above, the requirements to make the required online 

contract documents available online, presentation and linking requirements for 

these documents, and requirements relating to the definitions of “special terms”)? 

If not, what alternative requirements should we adopt to help ensure that investors 

who receive a RILA contract summary prospectus have access to more detailed 

information about the RILA contract if they want it? For example, should the 

required online contract documents also include information about the current 

limits on gains for each index-linked option offered under the contract? As another 

example, should the required online contract documents for issuers of RILAs and 

variable annuities that rely on rule 498A also include the financial statements of 

the registrant and/or insurance company, to the extent that these financial 

statements are not included in the SAI (if, for instance, an insurer’s financial 

statements are filed on Form N-VPFS or Form 10-K, and are incorporated by 



180 

reference into the registration statement)? To what extent would using the same 

approach for both RILAs and variable annuities ease compliance burdens on 

insurers? Is it appropriate that, as proposed, satisfying each of these proposed 

online accessibility requirements would be a condition for a RILA issuer to rely on 

rule 498A to satisfy prospectus delivery obligations? Are there any modifications 

we should make to the proposed safe harbor provision for temporary 

noncompliance? 

115. Should rule 498A include, as proposed, the same other requirements for summary 

prospectuses (relating to delivery upon request, prominence of the summary 

prospectus in relation to accompanying materials, “convenient for reading and 

printing” formatting, and hyperlinking requirements) as the rule currently requires 

for variable annuity summary prospectuses? Is it appropriate that, as proposed, 

satisfying each of these proposed requirements would not be a condition for a 

RILA issuer to rely on rule 498A to satisfy prospectus delivery obligations? 

D. Accounting (Items 16 and 26) 

We are proposing to permit RILA issuers to provide financial statements on amended 

Form N-4 in the same way that insurance companies currently do on Form N-4. The principal 

consequence of this change would be that the financial statements filed in connection with a 

RILA registration statement could be prepared in SAP to the same extent as currently permitted 

for insurance companies’ financial statements filed on that form. Instruction 1 to Item 26(b) of 

Form N-4 currently permits insurance companies that are the depositors of variable annuity 

separate accounts to prepare their financial statements for use in a registration statement filed on 

Form N-4 in accordance with SAP if the depositor would not have to prepare its financial 

statements in accordance with GAAP except for use in that registration statement or other181 

registration statements filed on Forms N-3, N-4, or N-6 (the forms used to register insurance 

products that are issued by investment companies).304 The instruction further states that the 

depositor insurance company’s financial statements must be prepared in accordance with GAAP 

if it prepares financial information in accordance with GAAP for use by its parent (as defined in 

Regulation S-X) in any report under sections 13(a) and 15(d) of the Exchange Act or any 

registration statement filed under the Securities Act.305 In interpreting this instruction the 

Commission has stated that the insurance product forms do not require the use of GAAP when: 

(1) GAAP financial statements are not prepared for either the depositor or its parent; or (2) the 

depositor’s parent prepares GAAP financial statements, but the depositor’s accounts are 

immaterial to its parent’s consolidated financial statements and, therefore, neither partial GAAP 

financial statements nor a GAAP reporting package is prepared by the depositor.306 

Forms S-1 and S-3 do not include an instruction similar to Instruction 1 of Item 26(b) of 

Form N-4. Rather RILAs registered on these forms are required to provide their financial 

statements in accordance with GAAP. The Commission, however, acting through authority 

delegated to the staff, has permitted insurance companies registering on Form S-1 to include 

SAP financial statements in RILA registration statements in the circumstances permitted by 

 

304  Similar to insurance products currently filing registration statements on these forms, RILA issuers would 
also be required, if all of the required financial statements of the insurance company are not in the 
prospectus, to state in the prospectus, under a separate caption, where the financial statements may be 
found and to briefly explain how investors may obtain any financial statements not in the SAI. Proposed 
item 16 of Form N-4. 

305  Similar instructions are contained in the other forms used to register insurance products issued by 
investment companies. See instruction 1 to Item 31(b) of Form N-3 and instruction 1 to Item 28(b) of Form 
N-6. 

306  See Registration Form for Insurance Company Separate Accounts Registered as Unit Investment Trusts that 
Offer Variable Life Insurance Policies, Investment Company Act Release No. 23066 (Mar. 13, 1998) [63 
FR 13988 (Mar. 23, 1998)] (discussing the same instruction in Form N-6). 



182 

Form N-4.307 The Commission has stated that this approach appropriately recognizes the cost 

burdens that would be imposed if the Commission were to require GAAP financial statements in 

cases where the depositor is not otherwise required to prepare financial information in 

accordance with GAAP.308 We preliminarily believe this is also true for insurance companies 

that offer RILAs and that it is important to provide for the consistent treatment of financial 

statements for all insurance companies that meet the circumstances permitted by Form N-4. As a 

result, permitting RILA issuers to rely on Instruction 1 to Item 26 to provide SAP financial 

statements to the same extent as issuers registering offerings of variable annuities on Form N-4 

would be consistent with investor protection. In addition, SAP financial statements, which focus 

on an issuer’s ability to meet its obligations under its insurance contracts, as regulated by state 

law, appear to provide sufficient material information for investors evaluating RILAs. 

Another consequence of requiring insurance companies to register offerings of RILAs on 

Form N-4 is that they will have greater flexibility to update their registration statement without 

the need to update certain financial statements. Under section 10(a)(3) of the Securities Act, 

RILA issuers, like variable annuity issuers, generally must file a post-effective amendment 

annually to update their audited fiscal year-end financial statements. In addition, Regulation S-X 

requires Form S-1 filers to include unaudited interim financial statements in any new registration 

statement or post-effective amendment that goes effective later than 134 days after the end of the 

 

307  See, e.g., F&G Life Letter. 
308  See Registration Form for Insurance Company Separate Accounts Registered as Unit Investment Trusts 

That Offer Variable Life Insurance Policies, Investment Company Act Release No. 25522 (Apr. 12, 2002) 
[67 FR 19848 (Apr. 23, 2002)]; see also VASP Adopting Release at n.813 and accompanying text. 



183 

insurer’s fiscal year.309 Form N-4 filers are not subject to this requirement.310 In addition, after 

the end of an insurer’s fiscal year, RILA issuers must include year-end audited financial 

statements in any new registration statement or post-effective amendment filed 45 days after the 

fiscal year-end.311 However, Form N-4 filers instead have a 90-day grace period.312 As a result of 

the proposal to include RILAs on Form N-4, RILA issuers therefore  would be able to file and 

amend their registration statements during certain times of year without the need to update their 

financial statements, which RILA issuers cannot do today.313 These approaches, in consideration 

of consistency in treatment among all insurance companies that meet the circumstances 

permitted by Form N-4, are equally appropriate for RILA filers on Form N-4. 

We are also proposing to require RILAs to provide the information relating to changes in 

and disagreements with accountants on accounting and financial disclosure as detailed in 17 CFR 

229.304 (“Item 304 of Regulation S-K”). Further, RILAs would be required to provide as an 

exhibit any letter from the insurance company’s former independent accountant regarding its 

concurrence or disagreement with the statements made by the insurance company in the 

registration statement concerning the resignation or dismissal as the insurance company’s 

 

309  17 CFR 210.3-12(a). RILA issuers that rely on rule 12h-7 are not required to provide periodic Exchange 
Act reports, including quarterly reports that include interim financial statements. Therefore, they must 
prepare interim financial statements for Securities Act registration statements, like Form S-1 and Form S-3, 
even though they do not prepare interim financial statements for other purposes.  

310  See Instruction 3 to Item 26(b) of Form N-4. 
311  See 17 CFR 210.3-01(c). 
312  See Instruction 3 to Item 26(b) of Form N-4. 
313  A further consequence of the proposed changes would be that insurance companies would generally be 

making available their RILA-related financial statements to investors on an annual basis, consistent with 
the timing of financial statements for variable annuities. Currently, insurance companies relying upon rule 
12h-7 provide their RILA-related financials annually, whereas insurance companies not relying on that rule 
provide financial statements quarterly. Insurance companies not relying on rule 12h-7 will file financial 
statements more frequently than annually if there are any post-effective amendments to the registration 
statement that require updated financial statements. See Form 10-Q. 



184 

principal accountant. These items are currently provided by RILAs on Forms S-1 and S-3 and are 

designed to address the practice of “opinion shopping” for an auditor willing to support a 

proposed accounting treatment designed to help a company achieve its reporting objectives even 

though that treatment might frustrate reliable reporting.314 The proposed amendments would not 

be required for variable annuities in light of their tiered investment company structure. Variable 

annuities typically invest indirectly in mutual funds offered as investment options under such 

contracts, which themselves are subject to similar disclosure obligations relating to changes in 

and disagreements with accountants on accounting and financial disclosure.315 

We request comment on these aspects of the proposal. 

116. Is it appropriate, as proposed, to permit RILA issuers to use the same approach 

with respect to the use of SAP financial statements, for purposes of preparing 

financial statements that are included on a registration statement on Form N-4, as 

Form N-4 currently provides for insurance company issuers? Why or why not?  

117. Would SAP financials provide sufficient material information for a RILA investor 

to make an informed investment decision? Why or why not? 

118. Why do insurance companies currently provide SAP financials instead of GAAP 

financials in their Form N-4 registration statements when permitted to do so? Do 

SAP financials currently provide sufficient material information for a variable 

annuity investor to make an informed investment decision?  

 

314  See Disclosure Amendments to Regulation S-K, Form 8-K and Schedule 14A Regarding Changes in 
Accountants and Potential Opinion Shopping Situations, Investment Company Act Release No. 16358 
(Apr. 12, 1988) [53 FR 12924 (Apr. 20, 1988)]; see also item 11(i) of Form S-1.  

315  See Item 27(b)(4) of Form N-1A.  



185 

119. Should we require the proposed items relating to changes in accountants for 

RILAs? If so, should we also require these items for all Form N-4 filers? If the 

information called for in Item 304 of Regulation S-K is required, is it appropriately 

placed in the SAI? 

E. Filing and Prospectus Delivery Rules 

1. Fee Payment Method and Amendments to Form 24F-2 

We are proposing to require insurance companies to pay securities registration fees 

relating to RILA offerings using the same method used for variable annuities.316 Specifically, 

issuers registering the offerings of RILAs on amended Form N-4 would be deemed to be 

registering an indeterminate amount of securities upon effectiveness of the registration 

statement.317 These issuers would then be required to pay registration fees annually based on 

their net sales of these securities, no later than 90 days after the issuer’s fiscal year ends, on the 

form that is used by registered separate accounts to pay securities registration fees relating to 

 

316  To accommodate the changes proposed in this release, EDGAR would be modified to require insurance 
companies registering RILAs to use a different CIK than that used for their other offerings. One CIK would 
be utilized to register the offerings of RILAs on Form N-4 and pay registration fees for securities relating to 
RILA offerings on Form 24F-2. The other would be utilized to register the insurance company’s other 
offerings of securities as they do currently. As a result, insurance companies would need to utilize separate 
CIKs for their RILA-related filings. If the issuer only offers RILAs, it should only use one CIK. Further, 
we are proposing to amend rule 313 of Regulation S-T in order to permit filings relating to RILA offerings 
to have both an investment company type and contract identifier in order to facilitate RILA issuers’ filing 
these forms and for ease in identification of particular RILA contracts. 

317  The proposed rule amendments would apply the same registration fee payment approach to RILAs that is 
currently provided by rule 24f-2 to current Form N-4 issuers. See proposed rules 456(e) (providing that 
where the registration statement relates to a RILA offering, RILA issuers would be deemed to have 
registered an indeterminate amount of securities for purposes of sections 5 and 6(a) of the Securities Act 
upon the effective date of its registration statement); and 457(u) (providing for RILA issuers to pay 
registration fees for securities relating to RILA offerings on the same annual net basis as other Form N-4 
issuers); see also proposed Form 24F-2. See section 4(e) of the Exchange Act [15 U.S.C. 78d-4(e)]; section 
28 of the Securities Act [15 U.S.C. 77z-3]. We preliminarily believe that these actions are necessary or 
appropriate in the public interest and consistent with the protection of investors. 



186 

variable annuities (Form 24F-2).318 We are further proposing to specify the calculation method 

for paying securities registration fees for RILA offerings, consistent with the fee calculation 

methodology that applies to variable annuities.319 We are also proposing amendments to Form 

24F-2 to specify when issuers can take credits for RILA redemptions that pre-date their use of 

that form and when expiring annuity contracts are rolled over into a new crediting period, as well 

as other non-substantive and conforming amendments.320 

Currently, insurance companies, like most issuers, register a specific amount of securities 

when registering RILAs and are required to pay a registration fee for those securities to the 

Commission at the time of filing a registration statement on Form S-1 or S-3.321 In contrast, the 

 

318  As a general matter, the proposed amendments would provide the same process for registering an 
indeterminate amount of securities relating to RILA offerings as is currently provided for exchange-traded 
vehicle securities under rule 456(d) (which, in turn, mirrors of the process for current Form N-4 issuers to 
register securities) except that (1) this process would be mandatory for RILAs and (2) RILA issuers would 
pay fees on Form 24F-2 instead of through a prospectus supplement in accordance with rule 424. See also 
Securities Offering Reform for Closed-End Investment Companies, Investment Company Act Release No. 
33836 (Apr. 8, 2020) [85 FR 33290 (June 1, 2020)] (“Closed-End Fund Offering Reform Adopting 
Release”). For example, the proposed amendments would provide the same mechanics as other Form 24F-2 
issuers when addressing interest calculations for late payments. 

319  All payments of filings fees for RILA registration statements would continue to be made by wire transfer, 
debit card, or credit card or via an ACH and there would be no refunds. See 17 CFR 230.111; proposed 
instruction A.5 to Form 24F-2.  

320  In addition to conforming changes in proposed Form 24F-2 to effectuate the changes discussed below, in 
order to improve the form we are proposing to: (1) remove reporting relating to shares paid for prior to Oct. 
11, 1997; (2) remove the statement in current Instruction A.3 to consult the EDGAR Filer Manual because 
the instructions referenced in Instruction A.3 are intended to be removed from the EDGAR Filer Manual; 
(3) remove current Instruction C.4, which includes EDGAR header tags for Item 5 of the form, as this 
information is no longer sufficient for filing purposes and current technical specifications are provided 
through the technical specifications page on the Commission’s webpage; (4) revise current Instruction C.9 
for Item 5(vii) to correspond to the current instructions for fee filing rates on the Commission’s website; (5) 
correct the website linked in current Instruction D.1; and (6) remove the estimated Paperwork Reduction 
Act burden cited in current Instruction F as extraneous in light of the OMB approval box that contains 
information on this topic. 

321  In general, issuers today—including insurance companies issuing securities relating to RILA offerings—
are required under the Securities Act to pay a registration fee to the Commission at the time of filing a 
registration statement. See sections 6(b)(1) (requiring applicants to pay a fee to the Commission at the time 
of filing a registration statement) and (c) (providing that a registration statement shall not be deemed to 
have taken place without payment of a registration fee) of the Securities Act [15 U.S.C. 77f(b)(1) and (c)]. 
This means they pay registration fees at the time they register the offering of securities, regardless of when 
 



187 

Investment Company Act provides that certain registered investment companies, including the 

variable annuity separate accounts that file on Form N-4, are deemed to have registered an 

indefinite amount of securities upon the effective date of their registration statement.322 Instead 

of paying registration fees at the time of filing a registration statement, registered separate 

accounts pay registration fees in arrears based on their net issuance of securities, no later than 90 

days after the issuer’s fiscal year end, on Form 24F-2.323 As a result, RILA issuers must 

currently ensure that they do not inadvertently sell more securities than they have registered, 

however this is not a concern in relation to variable annuities. Further, RILA issuers pay fees at 

effectiveness on Forms S-1 or S-3 for the securities being registered, while registered separate 

accounts do not pay a fee at effectiveness on Form N-4 but rather pay fees annually on Form 

24F-2 on the net sales of securities that year. 

Consistent with the other elements of this proposal, these proposed amendments are 

designed to require insurance companies to use the same framework to pay securities registration 

fees for RILAs that they do for variable annuities. Insurance companies offer RILAs in a manner 

substantially similar to variable annuities and would similarly benefit from paying registration 

fees on an annual net basis and from registering offerings of an indeterminate number of 

securities. The proposed amendments would provide registration fee payment parity for an 

insurance company that may offer one or more related insurance products, including index-

 

(or if) they sell them. In addition, although well-known seasoned issuers have additional flexibility in 
paying filing fees, none of the insurance companies that issue securities relating to RILA offerings 
currently claim status as a well-known seasoned issuer. See supra footnote 21. 

322  See 15 U.S.C. 80a-24(f). 
323  See id.; Form 24F-2. 



188 

linked options offered as part of combination annuity contracts.324 Requiring insurance 

companies to pay registration fees for securities relating to RILA offerings on Form 24F-2 would 

therefore be efficient for insurance companies. This approach would eliminate the risk that a 

RILA issuer may inadvertently oversell securities with respect to a registration statement on 

Form N-4, and the payment of fees on an annual net basis furthermore should lead to a reduction 

in overall filing fees relating to RILAs.325 Further, by requiring RILA and variable annuity 

offerings to use the same form and payment method, this process also would be efficient for the 

Commission. 

The proposed fee calculation method is also consistent with the continuous offering of 

RILAs to investors. These investors may make additional allocations or other investment 

decisions over time with respect to an investment in a RILA. One effect of this is that RILA 

issuers, unlike other Form S-1 or S-3 issuers, may have increased difficulty in using the filing 

fees associated with unsold securities of a particular RILA offering to offset the filing fees due 

for a subsequent registration statement. This is because many RILA issuers are not easily able to 

terminate a RILA offering, a necessary step to recoup fees paid on unsold securities for use in a 

separate RILA offering.326 

 

324  For combination products, each issuer of securities under the product (e.g., the separate account for the 
variable option and the insurance company for the index-linked option) would file a separate Form 24F-2 
relating to the payment of registration fees for its respective securities offered under the product. 

325  As part of the proposed amendments to Form 24F-2, RILA issuers would be required to include the value 
of any expiring annuity contract or index-linked option that is rolled over into a new crediting period in its 
calculation of the aggregate sale price of securities sold during the fiscal year. RILA issuers further would 
be required to report such contracts or options as a redemption. This would result in zero net sales being 
reported in this situation. See proposed instruction C.4 to Form 24F-2. 

326  See 17 CFR 230.457(p). To facilitate the transition to calculating fees on an annual net basis and filing 
Form 24F-2, a RILA’s fee calculation should exclude excess securities that were registered under its last 
registration statement that remain unsold prior to the effectiveness of any final rule. See proposed 
instruction C.5 to Form 24F-2. This would be so that a filing fee is not charged twice for the same 
securities being registered. 



189 

We are also proposing amendments to Form 24F-2 that would indicate when RILA 

issuers can take credits for redemptions of securities not claimed in a prior fiscal year (“non-

claimed prior redemptions”). Typically, issuers that file Form 24F-2 can take credit for these 

redemptions to offset some of the purchases being reported for the current fiscal year. This is 

only intended to be available for non-claimed prior redemptions that had occurred since the use 

of the form (and the payment of registration fees on an annual net basis) was available to the 

issuer.327 The form, however, includes a legacy instruction for any non-claimed redemptions in a 

prior fiscal year that ends no earlier than October 11, 1995. This specific date is related to the 

timing of open-end funds’ and unit investment trusts’ transition to Form 24F-2.328 With the 

addition of RILAs to this form, we are removing the reference to October 11, 1995 in Item 5(iii) 

of Form 24F-2 and amending the related instructions so that it is clear that issuers will only be 

able to take credit for non-claimed prior redemptions that occur on or after the date the issuer 

became eligible to use the form, which for RILA issuers would be the effective date of the 

proposed amendments, if adopted.329 

We request comment on the proposed fee payment methodology for RILAs and the 

proposed amendments to Form 24F-2. 

120. Is it appropriate to require RILA issuers to pay registration fees in arrears for the 

registration of securities? Would the process be more efficient for insurance 

companies than the current registration fee processes used by RILA issuers? If not, 

 

327  See generally Closed-End Fund Offering Reform Adopting Release at n.348. 
328  See Registration Under the Securities Act of 1933 of Certain Investment Company Securities, Investment 

Company Act Release No. 22815 (Sep. 10, 1997) [62 FR 47934 (Sep. 12, 1997)] at n.9. 
329  In addition to RILA issuers, interval funds have been able to use Form 24F-2 since Aug. 1, 2021 (the 

effective date of rule 24f-2 as applied to interval funds), so these funds likewise would only be able to take 
credit for non-claimed prior redemptions since that date. 



190 

what is the appropriate manner in which RILA issuers should pay registration 

fees? For example, should we instead amend Form N-4 to permit or require the 

payment of fees on that form for RILA issuers at the time the issuer files the 

registration statement, consistent with insurance companies’ current practices 

when paying registration fees for securities offerings registered on Forms S-1 and 

S-3? 

121. Instead of requiring RILA issuers to pay registration fees in arrears as proposed, 

should we permit RILA issuers to choose whether to take this treatment or use 

some other registration fee system? 

122. Is the proposed calculation methodology appropriate for RILAs? If not, what 

aspects of the methodology should be changed and why? 

123. Is it appropriate to have RILA issuers file Form 24F-2 for this purpose, or should 

we instead have RILA issuers file a prospectus pursuant to rule 424(i), consistent 

with the treatment of exchange-traded vehicle securities under rule 456(d)? 

124. Are the proposed amendments to Form 24F-2 appropriate? Should we tailor Form 

24F-2 to RILAs in other ways? Are the proposed amendments clear as to how a 

RILA issuer would use that form? Are there any other clarifications we should 

offer? 

125. Should we, as proposed, require separate Form 24F-2 filings for index-linked 

options and variable options that are offered as investment options in combination 

contracts? If not, how can we amend Form 24F-2 and rules 456 and 457 to 

accommodate combination contracts, given different legal entities are issuing the 

securities associated with different types of investment options? 



191 

126. Are the proposed amendments to rule 456 and 457 sufficiently clear as to how 

RILA issuers should calculate and pay the registration fees for securities relating to 

RILA offerings? Should we amend the rules further to provide more clarity? 

127. The proposed amendments to rule 456 and Form 24F-2 provide procedures for 

how to address a merger or the cessation of operations of the issuer, which in the 

RILA context is the insurance company issuing the RILA. Are these provisions 

necessary for RILA issuers? Should these instructions instead address the cessation 

or merger of the particular RILA being reported?  

128. Do commenters agree with the proposed requirements for how to address non-

claimed prior redemptions? Why or why not? 

129. Are there any other considerations or changes we should make to facilitate 

requiring RILA issuers to pay registration fees in arrears, either regarding 

securities already registered by RILA issuers or for some other reason? 

2. Post-Effective Amendments and Prospectus Supplements 

To facilitate the registration of RILA offerings on Form N-4 and consistent with the other 

elements of this proposal, we are proposing amendments to require RILA issuers to use the same 

framework for filing post-effective amendments to the registration statement that other issuers on 

Form N-4 currently use. Specifically, the proposal would amend rule 485 to require RILA issuers 

to use that rule when amending RILA registration statements on Form N-4. This change would 

permit RILA issuers to file post-effective amendments that become automatically effective under 

rule 485(a) after a specified period of time after the filing or, in certain enumerated 



192 

circumstances, immediately effective under rule 485(b).330 In addition, we are also proposing 

amendments that would require RILA issuers to apply rule 497 under the Securities Act when 

appropriate to file RILA prospectuses and prospectus supplements with the Commission.331 

These amendments are intended to facilitate a uniform post-effective amendment and prospectus 

filing framework for issuers on Form N-4 and should provide increased efficiencies for RILA 

issuers and Commission staff by applying consistent procedures for all security offerings 

registered on Form N-4. 

Our rules currently provide different processes for RILA issuers on Forms S-1 and S-3 

and current issuers on Form N-4 to update and keep current a registration statement or 

prospectus. Form N-4 is used by separate accounts that are unit investment trusts that offer 

variable contracts to register their securities under the Investment Company Act and to register 

an indefinite amount of continuously-sold securities under the Securities Act. Therefore, these 

issuers have a system of updating their disclosures that facilitates that structure. Issuers on Form 

N-4 typically update their registration statements annually through a post-effective amendment 

filed in accordance with rule 485 in order to, among other things, comply with Securities Act 

requirements.332 Rule 485(b) provides for the immediate effectiveness of many of the routine 

updates that issuers on Form N-4 may make over the course of a continuous, long-term offering, 

for example, those amendments filed for no purpose other than to bring the financial statements 

 

330  See rule 485(b).  
331  Consistent with this change, we are also proposing corresponding changes to (1) rule 424(f) to specify that 

RILA issuers must use rule 497 rather than rule 424 when filing prospectuses and prospectus supplements, 
and (2) rule 415(b) to exempt RILA offerings from the requirements of paragraph (a) of that rule consistent 
with the treatment of variable annuity separate accounts. 

332  See, e.g., section 10(a)(3) of the Securities Act [15 USC 77j(a)(3)]. 



193 

up to date under section 10(a)(3) of the Securities Act.333 These issuers also file forms of 

prospectuses used in their offerings through rule 497 and can supplement their prospectuses, also 

known as “stickering,” to reflect certain changes to the information disclosed by making a filing 

with the Commission in accordance with rule 497.  

Conversely, RILA issuers currently follow the processes operating companies use to 

update their registrations statements. Operating companies that are engaged in a continuous 

offering of securities, like RILA issuers, are similarly required to update their registration 

statement each year and may update their registration statement for changes other than to bring 

the financial statements up to date.334 For RILAs whose offerings are registered on Form S-1, 

these updates typically occur through a post-effective amendment.335 Rule 462 currently 

provides RILA issuers with a limited set of circumstances, none of which are specific or 

generally relevant to RILA offerings, in which a post-effective amendment to a registration 

statement is effective upon filing.336 Rather, when a RILA issuer seeks to update a RILA 

registration statement on Form S-1, the issuer must file a post-effective amendment that is 

typically declared effective by Commission staff acting pursuant to delegated authority.337  

 

333  See rule 485(b)(1)(i). Material post-effective amendments, however, are not immediately effective. See rule 
485(a). 

334  See, e.g., section 10(a)(3) of the Securities Act; rule 415(a); Item 512 of Regulation S-K. 
335  Under Form S-3, the section 10(a)(3) update need not be made through a post-effective amendment. 

Rather, under this form, the section 10(a)(3) update generally occurs when the issuer files its annual report 
on Form 10-K containing the issuer’s audited financial statements for its most recently completed fiscal 
year. 

336  See rule 462(d) and (e). For example, this rule provides that a post-effective amendment that seeks only to 
add exhibits to a registration statement would be effective upon filing. In addition, although a well-known 
seasoned issuer is permitted to file a post-effective amendment to an automatic shelf registration statement 
with immediate effectiveness, none of the insurance companies currently offering RILAs currently claims 
status as a well-known seasoned issuer. 

337  See 15 U.S.C. 77h; 17 CFR 229.501(a); 17 CFR 230.473. See also supra footnote 335 (describing the Form 
S-3 post-effective amendment process). 



194 

In addition to differences in the post-effective amendment process, RILA issuers also 

follow different processes to file prospectuses than current Form N-4 filers, relying on rule 424 

rather than rule 497. Although these rules provide for similar processes, there are certain 

differences. For example, rule 424 requires an issuer to file a prospectus only if the issuer makes 

substantive changes or additions to a previously-filed prospectus, whereas rule 497 requires 

funds to file every prospectus that varies from any previously-filed prospectus.338 Accordingly, 

under the proposed amendments, a RILA issuer would be required to file every prospectus 

relating to a RILA offering that varies in form from a previously filed prospectus before it is first 

used.339 This approach would provide a publicly accessible, usable database of current RILA 

prospectuses which would also assist the Commission in conducting its regulatory functions. In 

addition, rule 424 includes provisions related to continuous or delayed securities offering under 

rule 415.340 However, in light of the proposed amendments to the RILA registration framework, 

these provisions would no longer be applicable to RILAs.341 

Consistent with the other elements of this proposal, the proposed amendments are 

designed to provide parity between RILAs and other annuities registered on Form N-4. RILAs, 

like variable annuities, are longer-term investment products that are continuously offered and 

must maintain a current registration statement and up-to-date prospectus for new investors as 

well as for existing investors that may be able to make additional contributions or reallocate 

assets. Accordingly, applying rule 485’s simplified post-effective amendment process is a more 

 

338  See rule 424(a); rule 497. 
339  See proposed rule 497(e). 
340  See rule 424(b). 
341  See proposed rule 415(b).  



195 

appropriate framework for RILA registration statements in light of their similarity to variable 

annuities. RILA registration statements are routinely updated over the course of an offering and 

may be subject to material and non-material amendments over the long-term nature of the 

investment product. As such, the proposed amendments addressing the post-effective amendment 

process for RILA registration statement should provide benefits to current RILA issuers using 

Form S-1 by reducing administrative complexity when updating financial statements included in 

a registration statement or when making other changes to a registration statement through rule 

485’s provisions for automatic and immediate effectiveness.342 Requiring RILA issuers to rely 

on the simplified post-effective amendment process would enable these issuers to update their 

disclosures in a manner that complements and facilitates RILAs’ offering structure and 

particularly provide efficiency in the context of combination contracts. 

Requiring RILA issuers to rely on rules 485 and 497 also would provide a uniform post-

effective amendment and prospectus filing framework for all issuers using Form N-4 and provide 

insurance companies that may offer one or more related insurance products, including index-

linked options offered as part of combination annuity contracts, consistent filing requirements 

across related products. This should also result in enhanced efficiencies as these issuers would no 

longer be required to manage distinct filing processes for related products. In addition, 

employing the framework provided by rules 485 and 497 would provide Commission staff with 

an increased degree of administrative efficiency by facilitating the review of amendments 

containing material changes to RILA registration statements while permitting amendments with 

non-material changes to become effective immediately. 

 

342  See proposed rule 485. 



196 

We request comment on the proposed application of rules 485 and 497 to RILAs. 

130. Should we require RILA issuers to file post-effective amendments to registration 

statements on Form N-4 under rule 485? Are there additional circumstances not 

currently enumerated in the rule for which we should permit the immediate 

effectiveness of post-effective amendments? 

131. Do commenters agree that the current post-effective amendment process for RILA 

registration statements on Form S-1 may result in increased uncertainty and costs 

for RILA issuers than if the same issuers used the proposed post-effective 

amendment process under proposed rule 485 to amend RILA registration 

statements? Will using the process required by rule 485 mitigate these concerns? 

132. Should we require RILA issuers to file prospectuses and prospectus supplements 

under rule 497 rather than under rule 424? If not, what is a more appropriate 

process for RILA issuers to file prospectuses and prospectus supplements given the 

proposed move of RILA registration statements to Form N-4? 

133. How would RILA issuers be affected by the requirement to file the exact form of 

prospectus under rule 497, given rule 424 only requires filers to file prospectuses 

that contain substantive changes from or additions to a previously filed prospectus? 

134. Are there other filing rules that should be amended to help facilitate the 

movement of RILA registration statements to Form N-4? Is so, please explain what 

rules should be amended and the rationale for the suggested changes.  

3. Prospectus Delivery 

We also propose to prohibit the use of rule 172 in connection with the offering of a 

RILA. Under rule 172, a final prospectus is deemed to precede or accompany a security for sale 

for purposes of Securities Act section 5(b)(2) as long as the final prospectus meeting the 



197 

requirements of Securities Act section 10(a) is filed or the issuer will make a good faith and 

reasonable effort to file it with the Commission as part of the registration statement within the 

required rule 424 prospectus filing timeline.343 

Registered investment companies, including variable annuity separate accounts, are 

excluded from rule 172 and therefore must deliver a prospectus to investors.344 Therefore, we are 

excluding RILA offerings from rule 172 to ensure that investors receive a prospectus about these 

complex investments and because we are proposing to treat offerings of RILAs like offerings of 

variable annuities in other respects. Moreover, we understand that, as a practical matter, RILA 

issuers typically do not rely on rule 172 because RILA issuers typically deliver prospectuses to 

accompany or precede other communications, such as annuity applications, in order to avoid 

those communications being offers that otherwise would be non-conforming prospectuses that 

violate section 5 of the Securities Act.345 

We request comment on excluding RILA offerings from rule 172. 

135. Is our understanding correct that RILA issuers typically deliver prospectuses to 

investors to accompany or precede other communications, and thus do not rely on 

rule 172? If not, in what circumstances to RILA issuers typically rely on rule 172? 

Is there any reason we should permit RILA issuers to rely on rule 172 even though 

issuers cannot rely on the rule for other offerings registered on Form N-4? 

 

343  See Rule 172(b) and (c); see also Offering Reform Release at n.561 and accompanying text. 
344  Id. at section VI.B.1.b. 
345  See section 2(a)(10) of the Securities Act (providing, in part, that a communication sent or given after the 

effective date of the registration statement shall not be deemed a prospectus if it is proved that prior to or at 
the same time with such communication a written prospectus meeting the requirements of section 10(a) was 
sent or given to the person to whom the communication was made). See also Offering Reform Release at 
n.561 (stating that a final prospectus only filed as provided in rule 172 will not be considered to be sent or 
given prior to or with a written offer within the meaning of this clause of section 2(a)(10)). 



198 

F. Materially Misleading Statements in RILA Sales Literature 

We are proposing to amend rule 156 to make its provisions applicable to RILA sales 

literature. Under the Federal securities laws applicable to all securities (including RILA 

offerings), it is unlawful for any person to use materially misleading communications in 

connection with the offer or sale of any security.346 Rule 156 does not prohibit or permit any 

particular representations or presentation, rather it is an interpretive rule that provides factors to 

be weighed in considering whether a statement involving a material fact is or might be 

misleading in the specific context of investment company sales literature for purposes of the 

Federal securities laws, including sales literature relating to the sale of variable annuities. 

Applying this rule to RILA sales literature is consistent with the RILA Act in that it would 

provide RILA issuers guidance on ways to avoid presenting investors with materially misleading 

advertisements, which should help ensure that investors receive the information necessary to 

make informed decisions about these products.347 

Rule 156 provides guidance on whether a statement involving a material fact is 

misleading in sales literature, depending on an evaluation of the context in which it is made, with 

the rule providing four non-exhaustive factors to guide in this determination.348 While these 

factors have some relevance to the marketing of all securities, similarities between variable 

annuities and RILAs (as to how and to whom they are marketed), make the extension of rule 156 

to RILAs particularly appropriate. Like investment company sales literature generally (and 

variable annuity marketing materials particularly), RILA advertisements discuss complex 

 

346  See 15 U.S.C. 77q(a); 15 U.S.C. 78j(b); 17 CFR 240.10b-5. 
347  See Mutual Fund Sales Literature Interpretive Rule, Investment Company Act Release No. 10915 (Oct. 26, 

1979); [44 FR 64070 (Nov. 6, 1979)] (“Rule 156 Release”). 
348  See rule 156(b). 



199 

investment features, and RILA issuers should benefit from rule 156’s contextual analysis in 

considering whether a particular representation is materially misleading. Thus, the proposed 

amendments to rule 156 would help address these concerns by focusing attention to specific 

areas of RILA sales literature that we have identified as being particularly susceptible to 

misleading statements.349  

Commission staff have reviewed RILA advertisements to better understand how 

insurance companies market these products to investors. As part of this review, and based upon 

prior experience reviewing RILA registration statements, the staff identified common RILA 

marketing approaches that could benefit from rule 156’s guidance about advertising statements 

that could be misleading under the Federal securities laws without appropriate context. 

For example, in the sales literature reviewed by the staff, insurance companies typically 

marketed RILAs as growth products based primarily on the linkage to an underlying index. 

Current rule 156(b)(1)(ii) provides that a statement could be misleading because of “[t]he 

absence of explanations, qualifications, limitations or other statements necessary or appropriate 

to make such statement not misleading.” Thus, if rule 156 were applied to RILAs as proposed, 

rule 156 would assist insurance companies in considering whether representations about a RILA 

as a growth product would require qualification in light of particular RILA features, such as the 

existence and extent of any limitations on upside index performance. Representations that 

highlight downside protections of a RILA could similarly be misleading without the context of 

the cost or limitation of those protections (e.g., upside limitations). The same analysis would 

apply to representations that tout customization without discussing the trade-offs associated with 

 

349  See, e.g., Rule 156 Release (Rule 156 is “intended to highlight general areas which, based on the 
Commission’s regulatory experience with investment company sales literature, had proven to be 
particularly susceptible to misleading statements”). 



200 

that customization (e.g., long lock-up periods to get the best rates or having to experience a 

contract adjustment when making a change), or fail to explain that the insurance company has 

reserved the right to change or remove key features of the contract while surrender charges still 

apply. If RILA sales literature discussed these aspects of the contract without adequately 

explaining these limitations or the insurer’s discretion to alter key features, that omission could 

make the advertisement misleading. Accordingly, the application of rule 156(b)(1)(ii) to RILA 

sales literature would require an insurance company to consider whether an advertisement would 

be materially misleading if it suggests a given RILA is a loss-avoidance vehicle or a 

customizable product in the absence of qualifying explanations or statements. Similarly, if sales 

literature advertises a particular feature of the product’s bounded return structure (including, e.g., 

a specified index; an upside feature such as a particular “cap rate” or “participation rate”; or a 

downside feature such as a “floor” or “buffer”) that is not available for the life of the product or 

the full term of any surrender charge period, the rule would require consideration of whether the 

statement is misleading without providing additional context as to the insurer’s discretion. 

As another example, current rule 156(b)(4) provides that “[r]epresentations about fees or 

expenses associated with an investment in a fund could be misleading because of statements or 

omissions made involving a material fact, including situations where portrayals of the fees and 

expenses associated with an investment in the fund omit explanations, qualifications, limitations, 

or other statements necessary or appropriate to make the portrayals not misleading.” While RILA 

investors are not typically charged direct ongoing fees or expenses, RILAs do typically limit an 

investor’s ability to participate in upside performance, and charges like contract adjustments can 

impose costs upon highlighted features such as guaranteed benefits. In the context of RILA sales 

literature, the proposed application of this provision of rule 156 to RILA advertisements would201 

require consideration about whether representations or portrayals either of a RILA’s costs or 

charges (e.g., advertising implying that a RILA had low costs or no ongoing charges), or optional 

benefits that are subject to a contract adjustment, would necessitate qualifying statements or 

explanations regarding the costs or tradeoffs to the investor to receive an advertised benefit or 

those generally associated with the RILA.350 

Lastly, current rule 156(b)(2)(i) states that “[r]epresentations about past or future 

investment performance could be misleading because of statements or omissions made involving 

a material fact, including situations where: [p]ortrayals of past income, gain, or growth of assets 

convey an impression of the net investment results achieved by an actual or hypothetical 

investment which would not be justified under the circumstances, including portrayals that omit 

explanations, qualifications, limitations, or other statements necessary or appropriate to make the 

portrayals not misleading.” In the context of RILA advertising, the proposed provision would 

require consideration of whether illustrations about the operation of a RILA or its features could 

be misleading because, for example, they use assumptions (such as limits on gains or index 

performance that includes dividends whereas the RILA’s index does not include dividends) that 

are not currently offered or exceed what could be reasonably anticipated or use “cherry picked” 

data. Including historical index performance in an advertisement also would mislead investors if, 

for example, it suggested that the performance shown is predictive of future performance of the 

 

350  Insurance companies may apply a contract adjustment to the investors’ account when an investor annuitizes 
or takes advantage of benefits like “free withdrawal” provisions (that typically permit investors to withdraw 
up to 10% of the contract value each year without paying a surrender charge), death benefits, systemic 
withdrawals, and guaranteed benefits. See The Design and Regulatory Framework of Registered Index-
Linked Annuities, ALI CLE Conference on Life Insurance Products 2022 (“It is important to note that 
interim value adjustments may apply to surrenders and all types of ‘withdrawals,’ such as free look 
payments; annuitization; death benefit payments; deductions for third party advisory fees; systemic 
withdrawals; and even income payments under guaranteed benefit riders.”) 



202 

index or a RILA. On the other hand, using the index’s historical performance to illustrate how a 

RILA works in a fair and balanced way (e.g., by showing index performance relative to 

representative limits on gains and losses, as some RILA advertisements currently do) would be 

consistent with the proposed extension of rule 156 to RILA advertisements, assuming those 

advertisements otherwise include appropriate caveats to ensure that the illustrations are not 

misleading.351 Moreover, our preliminary view is that purporting to show the historical 

performance of the RILA or any particular index-linked option itself would generally be 

materially misleading. This is because the terms of a RILA investment, such as limits on gains, 

change frequently, making past performance irrelevant to current investors who are not able to 

utilize those past rates in current market conditions. In addition, to the extent that a RILA is 

using a point-to-point crediting method, that RILA’s return to an investor would be particularly 

sensitive to the specific date the investor purchased the RILA and when the crediting period ends 

for the index-linked option chosen by the investor.352 This further increases the likelihood of a 

current investor’s investment experience deviating from the historical performance of a given 

RILA, even when that RILA had similar terms to those currently offered. Our understanding is 

that insurance companies do not currently advertise the historical performance of the RILA or 

any particular index-linked option itself. 

In addition to rule 156, advertisements and sales literature for existing N-4 issuers is 

subject to 17 CFR 230.482 (“rule 482”). Rule 482 requires, among other things, enhanced 

disclosures in investment company and business development company advertisements designed 

 

351  See rule 156(b)(1)(ii) (statement can be misleading because of “absence of explanations, qualifications, 
limitations or other statements necessary or appropriate to make such statement not misleading”). 

352  See, e.g., OIAD Report at Section 3, Comparing RILA Features, Variations in Term Length and Simulated 
Returns; Section 7, Conclusions, Implications of the Research: The Economics of RILAs. 



203 

to convey balanced information to prospective investors, particularly with respect to 

standardizing representations of a fund’s past performance.353 These provisions were introduced 

as a result of the Commission’s experience with fund advertisements that were creating 

unrealistic or misleading expectations through representations regarding past performance.354 

Accordingly, rule 482 now permits funds to use performance data in their advertisements, but 

only according to standardized methodologies set forth in the rule. Unlike the rules applicable to 

most RILAs, rule 482 also permits registered investment companies and business development 

companies to provide advertisements and sales literature to investors without it being 

accompanied or preceded by a statutory prospectus.355 

While not required by the RILA Act, we nevertheless considered whether RILA 

advertising might raise similar concerns that would justify amending rule 482 to include RILAs. 

As explained below, we have not yet seen sufficient evidence to support an expansion of rule 

482 to RILAs at this time, though we acknowledge such concerns may develop in the future.356 

This conclusion largely follows from the rule’s standardized performance data requirements, 

which do not align with current practices in RILA advertisements. While variable annuity 

marketing materials frequently utilize standardized performance returns, this is not the case with 

RILA advertisements. Rather than relying on past performance, insurance companies typically 

market RILAs on other bases that are less amenable to standardized performance metrics, for 

 

353  See Amendments to Investment Company Advertising Rules, Investment Company Act Release No. 26195 
(Sept. 29, 2003) [68 FR 57760 (Oct. 6, 2003)] (“482 Amendment Release”). 

354  See id. 
355  See 17 CFR 230.433(b)(2). 
356  As a result, RILA sales literature, as “free writing” prospectuses, would continue to be subject to 17 CFR 

230.164 and 17 CFR 230.433, as well as any other applicable rule that permits a communication 
notwithstanding the “gun jumping” provisions of the Securities Act. 



204 

example highlighting that these are flexible products whose features can be customized to fit a 

particular investor’s needs. RILA advertising also typically does not attempt to utilize past 

performance, suggesting there is neither a need for rules prescribing RILA-specific past 

performance metrics, nor sufficient experience to inform the development of such metrics. For 

these reasons, we would not change rule 482 to include RILAs. 

We request comment on the proposed application of rule 156 to RILAs and our proposal 

not to amend rule 482 to include RILAs. 

136. Would the application of rule 156 to RILA sales literature help to prevent or 

address material misstatements in those communications? Is there any other action 

we should take to address this concern? 

137. Are there differences between variable annuities and RILAs that would justify not 

extending rule 156 to RILA sales literature as proposed?  

138. Instead of extending rule 156 to RILAs, should we create a new rule that 

specifically and solely deals with materially misleading information in RILA sales 

literature? If so, what is it about RILAs that necessitates a RILA-specific rule 

about materially misleading sales literature, and what particular areas or topics 

should we address in a RILA-specific sales literature rule? 

139. Do commenters agree with the contextual concerns highlighted above with 

regards to the representations typically used in RILA sales literature? Are there 

other claims or suggestions in RILA sales literature that insurance companies use 

that we should be concerned about?  

140. Do insurance companies currently utilize any performance metrics in RILA 

advertisements? Why do insurance companies not currently utilize past 



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performance in RILA sales literature to the same extent as variable annuity 

advertisements? Is there a way to standardize RILA past performance information? 

Is there a way to view RILA past performance information as other than as 

materially misleading? 

141. Do commenters agree that advertising the historical performance of a RILA or 

any particular index-linked option would be misleading in light of the customized 

nature of RILA contracts and the pace at which the RILA features that determine 

RILA performance are subject to change? 

142. Are there benefits to investors in amending rule 482 to include RILA advertising 

materials? If so, how should it be amended? How would we address past 

performance metrics for a RILA in light of the customized nature of RILAs and 

the changing nature of RILA features? 

143. Should we permit insurance companies to provide RILA sales literature to 

investors without being accompanied or preceded by a summary or statutory 

prospectus as variable annuities do? How would insurance companies be able to 

present such a complex product to investors in a way that they can understand? 

G. Existing Commission Letters 

Certain Commission letters, or portions thereof, exempting insurance companies from the 

requirement to provide financial statements prepared in accordance with GAAP in connection 

with the registration of an offering of RILAs on Form S-1 based on the authority provided in 17 

CFR 210.3-13 (“3-13 Exemptions”) would be withdrawn or rescinded in connection with any 

adoption of this proposal in light of the proposed change to permit RILAs to provide SAP 

financial statements on amended Form N-4 in the same way that other insurance companies are 



206 

permitted to do so on current Form N-4.357 Following the compliance date of any final rule, some 

letters, or portions thereof, would be moot, superseded, or otherwise inconsistent with the final 

rule and, therefore, would be withdrawn or rescinded. If commenters believe that additional 

Commission letters or other actions, or portions thereof, should be withdrawn or rescinded, they 

should identify the letter or guidance, state why it is relevant to the proposal, how it or any 

specific portion thereof should be treated, and the reason therefor. Based on the proposal, 3-13 

Exemptions that would be withdrawn or rescinded would include, but would not necessarily be 

limited to, all of the 3-13 Exemptions listed below. 

Table 8: Existing Commission Letters 

Name Date 

Great-West Life & Annuity Insurance Company and Great-West Life & 
Annuity Insurance Company of New York 

9/28/2018 

Athene Annuity and Life Company 9/28/2018 
Allianz Life Insurance Company of North America and Allianz Life Insurance 
Company of New York 

9/28/2018 

MONY Life Insurance Company of America 3/7/2019 
Symetra Life Insurance Company and First Symetra National Life Insurance 
Company of New York 

8/8/2019 

Forethought Life insurance Company 10/17/2019 
Nationwide Life Insurance Company 10/17/2019 
Minnesota Life Insurance Co.  6/11/2020 
MEMBERS Life Insurance Co.  11/6/2020 
Transamerica Life Insurance Company and Transamerica Financial Life 
Insurance Company 

2/11/2021 

Midland National Life Insurance Company 8/12/2021 
Protective Life Insurance Company and Protective Life and Annuity Insurance 
Company 

10/14/2022 

Everlake Life Insurance Company 10/21/2022 

 

357  Rule 3-13 provides, in part, that the “Commission may, upon the informal written request of the registrant, 
and where consistent with the protection of investors, permit the omission of one or more of the financial 
statements herein required or the filing in substitution therefor of appropriate statements of comparable 
character.” We would not be rescinding exemptions provided in any of the letters outlined below provided 
with respect to non-RILA insurance products because they are not affected by this rulemaking. 



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Name Date 

Fidelity & Guaranty Life Insurance Company and Fidelity & Guaranty Life 
Insurance Company of New York 

3/17/2023 

Delaware Life Insurance Company and Gainbridge life Insurance Company 4/28/2023 

We request comment on the proposed recessions. 

144. Are there any other Commission letters or actions that should be rescinded or 

withdrawn if the proposal is adopted?  

145. Are there any staff letters or guidance pieces that would be moot, superseded, or 

otherwise inconsistent with the final rule? 

146. In a future rulemaking, should we consider codification of any 3-13 Exemptions 

that have been granted to other insurance products? If so, what considerations 

should the Commission consider in doing so? 

H. Registered Market-Value Adjustment Annuities 

In addition to RILAs, there are other non-investment company insurance products that 

are securities under the Federal securities laws. Like RILAs, offerings of these securities are 

currently registered by insurance companies on Forms S-1 or S-3. For example, some annuity 

contracts that offer fixed investment options and apply market-value adjustment annuities 

(“MVAs”) to amounts withdrawn from such fixed options before the end of the fixed option’s 

term (e.g., due to contract withdrawals, transfers to other investment options, and annuitization) 

are required to register the MVA with the Commission (“registered MVAs”).358 For these 

annuities, fixed options are either offered on their own or in a combination contract with variable 

options. Like RILAs, a significant feature of a registered MVA is the contract adjustment. 

 

358  Registered MVAs are securities because the MVA feature imposes certain investment risks on purchasers. 
See Section 3(a)(8) of the Securities Act and 17 CFR 230.151; see also SEC v. Variable Annuity Life 
Insurance Co. of America, 359 U.S. 65, 77 (1959). 



208 

Because RILAs and registered MVAs differ only with respect to the manner in which 

interest is calculated and credited, many of the disclosures we are proposing for RILAs on Form 

N-4 would also be appropriate for registered MVAs. This is particularly true of the proposed 

disclosures relating to the operation of contract adjustments, given their importance in both a 

RILA and a registered MVA. 

We are not proposing to require insurance companies to register offerings of registered 

MVAs on Form N-4 at this time because the RILA Act does not address these securities and 

imposes specific timelines for the Commission both to propose rules and to adopt final rules. We 

request comment below, however, on whether we should also require insurance companies to 

register offerings of registered MVAs on Form N-4. To help commenters evaluate these requests 

for comment, we also have analyzed the changes to Form N-4 we believe would be necessary to 

accommodate offerings of these securities:  

• Adding registered MVAs to the list of permissible uses of Form N-4 on the facing page 

and general instructions;359 

• Adjusting the definition of “Contract Adjustment” in the form to account for investment 

options beyond index-linked options; 

• In the discussion of how interest is calculated for the contract’s fixed options in the 

description of the insurance company, registered separate account, and investment 

options, requiring: (1) a statement that an investor could lose a significant amount of 

money due to the contract adjustment if amounts are removed from a fixed option prior to 

the end of its term, (2) a description of the transactions subject to a contract adjustment 

 

359  See, e.g., proposed General Instruction B.1 of Form N-4. 



209 

with cross-references to the related disclosure in the prospectus, and (3) a prominent 

statement of the maximum amount of loss, as a percentage, an investor could experience 

from a negative contract adjustment and that this loss could be greater due to surrender 

charges and tax consequences;360 

• Adjusting the disclosures in the prospectus about contract adjustments in the charges-

related disclosures to account for investment options beyond index-linked options having 

contract adjustments;361 

• In the appendix of available investment options, in the discussion of fixed options, 

requiring: (1) a legend stating that if amounts are withdrawn from a fixed option before 

the end of its term, the insurance company may apply the contract adjustment and that 

this may result in a significant reduction in contract value; and (2) the provision of 

appropriate cross-references to the prospectus disclosure relating to contract 

adjustments;362 

• Requiring registered MVAs to provide the same disclosure proposed for RILAs regarding 

changes in accountants;363 

• Requiring registered MVAs to provide the same census-type information as we are 

proposing for RILAs;364 and 

 

360  See proposed Item 6(e)(2) of Form N-4. 
361  See proposed Item 7(e) of Form N-4. 
362  See proposed Item 17(c) of Form N-4. 
363  See proposed Item 26(c) of Form N-4. As with RILAs, if insurance companies were required to use Form 

N-4 for registered MVAs, they would also be permitted to use SAP in registered MVA registration 
statements to the same degree as other Form N-4 filers. See supra section II.D. If we were to do this, 3-13 
Exemptions provided in connection with registered MVAs would be withdrawn or rescinded for the 
reasons discussed in section II.G above. 

364  See proposed Item 31A of Form N-4. 



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• Requiring the same undertakings and exhibits for registered MVAs as we are proposing 

for RILAs.365 

In addition to these changes to Form N-4, if we were to require insurance companies to 

use Form N-4 to register offerings of registered MVAs, we would anticipate providing the same 

functional changes we are proposing for RILAs, that is, the ability to use a summary prospectus 

and the use of the same filing and marketing rules, for the same reason as we are proposing these 

changes for RILAs.366 For example, we could create a defined term “registered market value-

adjusted annuity” in rule 405 that would be an annuity (1) that is deemed a security; (2) that is 

offered or sold in a registered offering; (3) that is issued by an insurance company that is subject 

to the supervision of either the insurance commissioner or bank commissioner of any State or 

any agency or officer performing like functions as such commissioner; (4) not issued by an 

investment company; and (5) whose value may reflect a positive or negative adjustment (based 

on calculations using a predetermined formula, or a change in interest rates, or some other factor 

or benchmark) if amounts are withdrawn before the end of a specified period. We could then use 

this definition to apply to registered MVAs those Securities Act rules we propose to apply to 

RILAs.367 We would also expect to have the same requirements as to the use of Inline XBRL for 

similar reasons.368 

 

365  See proposed Items 27(q) and 34(b) of Form N-4. 
366  See supra sections II.C, E, and F. 
367  This definition mirrors that of “registered index-linked annuity” we are proposing to add to rule 405 for 

RILAs, other than the last provision which borrows from the definition of “contract adjustment” we are 
proposing to add to Form N-4. We could also consider creating a defined term in rule 405 that combines 
both the RILA and registered market-value adjusted annuity definitions for simplicity. 

368  See supra section II.B.9. 



211 

We request comment on whether to require insurance companies to register the offering 

of registered MVAs on Form N-4. 

147. Would it be appropriate to require insurance companies to register the offering of 

registered MVAs on Form N-4 (as proposed to be as amended in this proposal)? 

Should all of the changes suggested above apply to registered MVAs?  

148. Is the definition of “registered market-value adjusted annuity” included above as 

an example the correct one? 

149. Are there any other disclosures that would be relevant in the registered MVA 

context? 

I. Technical Amendment to Form N-6 

The Commission is proposing a technical amendment to Form N-6 to reflect the correct 

placement of an amendment to this form that the Commission adopted in 2020 in the release 

titled “Facilitating Capital Formation and Expanding Investment Opportunities by Improving 

Access to Capital in Private Markets” (herein referred to as the “Exempt Offering Framework 

Adopting Release”).369 In that release, the Commission adopted, among other amendments, 

amendments to certain instructions associated with the Exhibits items of Form N-4 and Form N-

6. The amendatory instructions in the Exempt Offering Framework Adopting Release 

erroneously referred to outdated Exhibits items of these forms. That is, the amendatory 

instructions referred to Items 24 and 26 respectively, instead of Items 27 and 30 respectively (as 

adopted by the Commission in earlier amendments to Forms N-4 and N-6 in the VASP Adopting 

 

369  Facilitating Capital Formation and Expanding Investment Opportunities by Improving Access to Capital in 
Private Markets, Investment Company Act Release No. 34082 (Nov. 2, 2020) [86 FR 3496 (Jan. 14, 
2021)]. 



212 

Release).370 The amendments we are proposing to Form N-4 correctly reflect the placement of 

the amendment that the Commission adopted in the Exempt Offering Framework Adopting 

Release in Item 27 of the form instead of in Item 24. We are also proposing a technical 

amendment to Item 30 of Form N-6 that correctly reflects the placement of the amendment that 

the Commission adopted in the Exempt Offering Framework Adopting Release in this item 

instead of in Item 26. 

J. Compliance Period 

We are proposing a compliance date one year after publication of final amendments in 

the Federal Register.371 All initial registration statements and post-effective amendments that are 

annual updates to effective registration statements on Form N-4 that are filed after the 

compliance date would be required to comply with the amendments. This compliance period is 

designed to give registrants sufficient time to comply with the proposed changes, including to 

update their registration statements; to prepare to use rules 485 and 497 to update their 

registration statements and file prospectuses with the Commission; and to begin paying securities 

registration fees on Form 24F-2. 

RILAs that have previously registered offerings of securities on Forms S-1 or S-3 would 

file a post-effective amendment to their registration statement pursuant to rule 485(a) at the time 

of their next annual update following the compliance date, using Form N-4.372 In appropriate 

 

370  See Exempt Offering Framework Adopting Release at amendatory instructions 50 and 51; see also VASP 
Adopting Release at section II.C.4 (Table 6). 

371  This compliance period would apply for all of the amendments in this release other than the technical 
amendment to Form N-6 discussed in section II.I supra. 

372  A post-effective amendment filed under rule 485(a) [17 CFR 230.485(a)] generally becomes effective 
either 60 days or 75 days after filing, unless the effective date is accelerated by the Commission. RILA 
registrants generally should be able to rely on template filing relief, in which case they would not need to 
file a rule 485(a) filing for each RILA. See proposed amended rule 485(b)(1)(vii). Existing RILA issuers 
 



213 

circumstances, we would consider requests by registrants with respect to existing variable 

annuity contracts to file post-effective amendments pursuant to Securities Act rule 485(b)(1)(vii) 

when these post-effective amendments make conforming changes to comply with the proposed 

amendments to Form N-4.373  

We also are proposing to provide a six-month delayed effective date for all amendments 

except for the amended Form N-4, amended rule 498A, and technical amendments to Form N-6, 

such that all other final amendments would be effective six months after publication in the 

Federal Register. Thus, we propose that a registrant would be able to rely on rule 498A to satisfy 

its obligations to deliver a RILA contract’s statutory prospectus beginning on the effective date 

of the rule amendments, provided that the registrant is also in compliance with the amendments 

to Form N-4. The delayed effective date for remaining amendments would provide the 

Commission time to prepare the EDGAR system to accommodate transitioning RILA offerings 

onto the proposed framework.374  

 

that only issue RILAs and will be using the same CIK would be permitted to transition by filing a 
485APOS or 485BPOS in EDGAR. Both of these submission types allow the entity to keep its current 
Securities Act file number, and both allow the filer to obtain new contract IDs and the needed Form N-4 
investment company type designation in EDGAR. RILA issuers that will be acquiring new CIKs for their 
RILA offerings would need to transition by filing an administrative Form N-4 submission under a newly-
issued CIK to obtain a new Securities Act file number, new contract IDs, and the Form N-4 investment 
company type (which is used for EDGAR purposes only). 

373 A post-effective amendment filed under rule 485(b) may become effective immediately upon filing. A post-
effective amendment may be filed under rule 485(b) if it is filed for one or more specified purposes, 
including to make nonmaterial changes to the registration statement. A post-effective amendment filed for 
any purpose not specified in rule 485(b) generally must be filed pursuant to rule 485(a). Under rule 
485(b)(1)(vii), the Commission may approve the filing of a post-effective amendment to a registration 
statement under rule 485(b) for a purpose other than those specifically enumerated in the rule. The 
Commission’s staff has been delegated the authority to approve registrants’ requests under rule 
485(b)(1)(vii). 17 CFR 200.30-5(b-3)(1). 

374  There would be no transition period associated with the technical amendment to Form N-6 discussed in 
section II.I supra.  



214 

We are not delaying the effective date of the proposed changes to Form N-4 and rule 

498A, however, to allow registrants to begin filing registration statements under the revised form 

as soon as possible. We believe allowing registrants to use the new form as soon as possible 

following the Commission’s adoption of final amendments is consistent with Congress’s intent 

in directing the Commission to prepare and finalize a new form for RILAs within 18 months of 

enactment.  

We request comment on the proposed compliance period: 

150. Would the proposed compliance period provide registrants sufficient time to 

prepare to comply with the amendments? Would more time be appropriate or, 

conversely, should we provide a shorter compliance period to ensure that investors 

receive the benefit of the proposed amendments more quickly?  

151. Should we provide a separate compliance period to provide more time for 

insurance companies to comply with the requirement to structure certain disclosure 

in Inline XBRL? For example, should we provide an additional year period after 

the date insurance companies are required to first update their disclosure? 

152. Is it appropriate to permit a registrant to rely on rule 498A to satisfy its 

obligations to deliver a RILA contract’s statutory prospectus beginning on the 

effective date of the rule amendments, provided that the registrant is also in 

compliance with the amendments to Form N-4?  

K. General Request for Comment from Retail Investors 

We are requesting input from the retail investor community relating to the experiences of 

seeking information about, and investing in, a RILA. We understand that RILAs are typically 

sold to retail investors. This, together with the congressional mandate to design disclosure 

requirements for RILAs with the goal of ensuring that key information is conveyed in terms a 



215 

purchaser is able to understand, makes feedback from retail investors particularly relevant as we 

consider the disclosures that would be required in a RILA registration form.375 Specifically, we 

invite retail investors seeking to comment on their feedback with annuities generally and RILAs 

in particular to submit a short Feedback Flyer, available at Appendix D. 

III. ECONOMIC ANALYSIS 

A. Introduction 

We are mindful of the costs imposed by, and the benefits obtained from, our rules. 

Section 3(f) of the Exchange Act, section 2(b) of the Securities Act, and section 2(c) of the 

Investment Company Act state that when the Commission is engaging in rulemaking under such 

titles and is required to consider or determine whether the action is necessary or appropriate in 

(or, with respect to the Investment Company Act, consistent with) the public interest, the 

Commission shall consider whether the action will promote efficiency, competition, and capital 

formation, in addition to the protection of investors. Further, section 23(a)(2) of the Exchange 

Act requires the Commission to consider, among other matters, the impact such rules would have 

on competition and states that the Commission shall not adopt any rule that would impose a 

burden on competition not necessary or appropriate in furtherance of the purposes of the 

Exchange Act.  

We are proposing amendments to our rules designed to carry out the requirements of 

Section 101(b) Division AA, Title I of the Consolidated Appropriations Act, 2023, to establish a 

registration form for RILAs. The Commission is proposing to amend the form currently used by 

most variable annuity separate accounts, Form N-4, to require issuers of RILAs to register 

 

375  See supra discussion accompanying and following footnote 7.  



216 

offerings on that form as well. To facilitate this amendment, the Commission is also proposing to 

amend certain filing rules and make other related amendments. In addition, we are proposing 

other amendments to Form N-4 that would apply to all issuers that use that form. We are also 

proposing to apply a current Commission rule that provides guidance as to when sales literature 

is materially misleading under the Federal securities laws to RILA advertisements and sales 

literature. 

While the Commission has developed a set of specific registration forms for variable 

insurance contracts, RILA issuers cannot use those forms because a RILA issuer is not an 

investment company. Currently, insurance companies register the offerings of RILAs on the 

Securities Act registration forms that are typically used to register traditional debt or equity 

offerings, Forms S-1 and S-3. Because Forms S-1 and S-3 are not tailored to the particular 

characteristics of RILAs (or indeed insurance products more generally), these forms include a 

number of disclosure requirements that may be less material to investors when evaluating an 

insurance product like a RILA and do not include line-item requirements mandating RILA-

specific information that is of importance to investors in these products. The inclusion of 

disclosures that are of little relevance to investors and the omission of information that is of 

importance to investors limits the usefulness of the information investors currently receive about 

RILAs and thus their ability to make informed investment decisions. In addition, Forms S-1 and 

S-3 require the use of GAAP financial statements, rather than the SAP financial statements that 

the State insurance regulators require. SAP financial statements, which focus on an issuer’s 

ability to meet its obligations under its insurance contracts, as regulated by State law, appear to 

provide sufficient material information for investors evaluating RILAs. Investors may also 

benefit from the lower cost burdens on issuers provided by the use of SAP financial statements, 



217 

to the extent that those savings are passed along to investors. The proposed rule would increase 

the usefulness of the information provided to current and prospective investors in RILAs by: 

• Adapting the existing registration and disclosure framework for variable insurance 

contracts to accommodate RILAs; 

• Requiring RILA-specific disclosure requirements in Form N-4, including disclosures 

specific to the underlying investment options, such as, for each available index-linked 

option, the index, crediting period, and index crediting methodology; 

• Proposing amendments to Form N-4 based on our experience in administering the form 

and in reaction to our observations of investor testing, which would be applicable to all 

issuers that use this registration form and which are designed to improve disclosures; 

• Switching the order of the Key Information Table and Overview of the Contract items;  

• Utilizing a question and answer format for the Key Information Table; 

• Removing an instruction that permits registrants to omit additional disclosure in the 

prospectus that repeats information disclosed in the Overview of the Contract or the Key 

Information Table; and 

• Extending the current rule providing factors to be weighed in considering whether a 

statement involving a material fact is or might be misleading in the specific context of 

investment company sales literature to RILAs, in order to address misleading statements 

about RILA fees, product features, and certain performance presentations in RILA sales 

literature. 

We have considered the potential costs and benefits that would result from the proposed 

rules, as well as the potential effects on efficiency, competition, and capital formation. Certain 

potential economic effects of the proposed rule would stem from the statutory mandate, while 



218 

others would stem from the discretion we are exercising. We discuss the potential economic 

effects of the proposed amendments in section III.C. We also consider certain alternatives to our 

proposed approach to implementing the statutory mandate, as discussed in section III.E. We note 

that, where possible, we have attempted to quantify the costs, benefits, and effects on efficiency, 

competition, and capital formation expected to result from the proposed rule. In some cases, 

however, we are unable to quantify the economic effects because we lack the information 

necessary to provide a reasonable and reliable estimate. Nevertheless, as described more fully 

below, the Commission is providing both a qualitative assessment and quantified estimate of the 

economic effects, where feasible. The Commission invites commenters to include estimates and 

data that could help it form useful estimates of the economic effects of the proposed 

amendments. 

B. Baseline 

1. Affected Parties 

The proposed rule would affect issuers of and investors in RILAs, as well as issuers of 

and investors in variable annuities that are registered on Form N-4.  

a. The Market for Annuity Products 

As of January 2023, there were 90 RILAs registered with the Commission issued by 23 

insurance companies.376 Among the 90 RILAs, 50 are stand-alone RILA products, while 40 are 

combination contracts that offer index-linked options as well as variable options. The number of 

RILAs registered with the SEC on Form S-1 is 52, while the remaining 38 are registered on 

 

376  Based on analysis of Forms S-1, S-3 and POS AM filed by RILA issuers. 



219 

Form S-3. A little over half of the registered RILAs (47 RILAs) report SAP financials, with the 

remainder (43 RILAs) reporting GAAP financials.377  

RILA contracts currently offer a variety of index-linked options. Specifically, RILA 

contracts that are currently registered with the Commission offer index-linked options whose 

returns are linked, in part, to between two and nine indices with an average among RILAs of 4.3 

indices.378 The indices associated with current RILA contracts commonly include the S&P 500, 

Russell 2000, and NASDAQ-100. RILA contracts offer index-linked options with less well 

known indices and ETFs as well, but with much less frequency.379 

As discussed in Section I, index-linked options whose returns are based, in part, on the 

same index may nevertheless have different elements that contribute to an investor’s returns. 

Notably, different index-linked options whose returns are linked to the same index may offer 

different crediting periods (the set length of time for measuring growth of contract value based 

on the performance of the linked index—for example, one or three years), crediting 

methodologies, and buffer or floor levels. RILAs that are currently registered with the 

Commission offer between 4 and 64 index-linked options, with an average of 22.8 index-linked 

options. Common crediting periods include one, two, three, and six years, with one year being 

most common. In the past, index-linked options with terms as long as 10 years have been 

offered, although the longest index-linked option term currently offered is six years. For those 

“combination” contracts that offer index-linked options and variable options, the number of 

 

377  EDGAR Database. Certain Commission letters, or portions thereof, exempt insurance companies from the 
requirement to provide financial statements prepared in accordance with GAAP in connection with the 
registration of an offering of RILAs on Form S-1. See Section II.G. 

378  Data obtained from Forms S-1, S-3 and POS AM filed by RILA issuers. 
379  Data obtained from Forms S-1, S-3 and POS AM filed by RILA issuers. 



220 

variable options ranges from 1 to 100, with an average of 10.4 variable options. The most 

common variable option is a money market fund – in all instances of combination contracts, a 

money market fund (or, in one case, a similar liquid investment) is offered as a variable option.  

Table 9 provides information on the dollar amount of RILA sales from 2016 to 2022.380 

RILA sales have increased from $7.3 billion in 2016 to $41.1 billion in 2022, which represents a 

463% increase between these two years.  

Table 9: Sales of RILAs, 2016-2022 

 2016 2017 2018 2019 2020 2021 2022 

Sales of RILAs 
($ billions) 

7.3 9.0 11.2 17.4 24.1 38.7 41.1 

Source: Fact Tank: Sales Data, LIFE INSURANCE MARKETING AND RESEARCH ASSOCIATION, 
https://www.limra.com/en/newsroom/fact-tank/ (using data from the U.S. Individual Annuity Sales surveys for 
Q4 for each year from 2016 through 2022). 

 

A recent survey of insurers found that 85% of respondents believed in 2021 that RILA 

sales would increase by 10% or more over the next three years, 10% believed that RILA sales 

would increase by less than 10%, while 5% believed that RILA sales would remain the same 

over that time period. No respondents indicated that they believed RILA sales would decrease.381 

When surveyed about the factors driving the growth in RILA sales, the three most commonly 

cited reasons were: (1) increased understanding of RILAs among advisers and broker-dealers 

(85%), (2) the entrance of large, reputable insurers into the RILA market (80%), and (3) 

 

380  Fact Tank: Sales Data, LIFE INSURANCE MARKETING AND RESEARCH ASSOCIATION, 
https://www.limra.com/en/newsroom/fact-tank/ (using data from the U.S. Individual Annuity Sales surveys 
for Q4 for each year from 2016 through 2022). 

381  Cerulli Associates & Insured Retirement Institute, Custom Key Findings, U.S. Annuity Markets 2021: 
Acclimating to Industry Trends and Changing Demand Ex. 1 (2021) (“Cerulli Report”), available at 
https://www.irionline.org/wp-content/uploads/2022/02/IRI-Key-Findings_2021_Final_12622.pdf  

https://www.limra.com/en/newsroom/fact-tank/
https://www.limra.com/en/newsroom/fact-tank/
https://www.irionline.org/wp-content/uploads/2022/02/IRI-Key-Findings_2021_Final_12622.pdf221 

increased supply due to the entrance of large issuers and distributors of RILAs (80%).382 

Respondents also indicated that they expected to see the largest increases in sales among the 

following distribution channels: independent agents or broker/dealers, captive insurance agents, 

regional broker/dealers, and wirehouses.383 RILAs were also the product most insurers indicated 

had “tremendous” growth potential over the near term. 384  

As of 2019, there were a total of 2,396 unique variable annuity products offered by a total 

of 33 companies.385 Net assets totaled $2,018.0 billion. Also in 2019, variable annuity sales 

totaled $98.3 billion.386 Of the total sales, $62.8 billion (64% of total sales) were annuities within 

qualified plans and $35.5 (36%) were non-qualified annuities.387 Investors purchased annuities 

across various distribution channels – captive agents, $34.5 billion, (35% of total sales); 

independent financial planners/NASD firms, $39.2 billion (40%); banks/credit unions, $9.2 

billion (9%); wirehouses/regional broker-dealers, $12.6 billion (13%); and direct response, $2.8 

billion (3%).388  

b. Issuing Insurance Companies 

 

382  Id. at Exhibit 2.      
383  Id. at Exhibit 3. Other RILA distribution channels include: brokerage general agencies/independent 

marketing organizations, registered investment advisers, and direct sales. 
384  Cerulli Report at Exhibit 5.  
385  See Insured Retirement Institute Retirement Fact Book 2020 (“IRI Fact Book”). In 2018 (the last year for 

which this information is available in the 2020 edition), the total number of variable annuity contracts in 
force was 17.9 million, with an average individual contract value of $113,053.   

386  Id. 
387  Id. 
388  Id. 



222 

The number of insurance companies currently offering securities registered as RILAs 

with the Commission is 23, from 19 insurance company complexes. Out of these 23 insurance 

companies, 15 of them register RILAs on Form S-1, while the remaining 8 use Form S-3.389 

 Insurance companies offer, on average, 4 RILA contracts, ranging from a maximum of 

11 RILAs to a minimum of 1 RILA. The top two issuers offer 21 RILAs in total, or 29% of the 

number of existing RILA products.390 

c. Investors 

In 2021 there were an estimated 83 million individuals aged 45–64 and 56 million 

individuals aged 65 or older in the United States, representing 25 percent and 17 percent of the 

total population, respectively.391 The number of individuals age 65 or older is projected to be 65 

million (19 percent of the total projected population) in 2025, 78 million (21 percent of the 

projected population) in 2035, 83 million (22 percent of the projected population) in 2045, and 

90 million (24 percent of the projected population) in 2055.392  

Individuals that are planning for, or are already in, retirement face increasing challenges 

with respect to achieving their income goals for retirement. First, people are living longer. 

Second, traditional defined-benefit retirement systems that provide guaranteed income are being 

replaced with defined-contribution systems that require people to accumulate their own 

 

389  Data obtained from Forms S-1, S-3 and POS AM filed by RILA issuers. 
390  Calculated using data obtained from Forms S-1, S-3 and POS AM filed by RILA issuers. 
391  Annual Estimates of the Resident Population for Selected Age Groups by Sex for the United States: Apr. 1, 

2020, to July 1, 2021 (NC-EST2021-AGESEX). We do not have demographic data on RILA investors. A 
2013 survey found that 86 percent of individual annuity investors purchased their first annuity before ag 65, 
including 47% who were between the ages of 50 and 64 years old.  The average age of investors at first 
purchase of an annuity is 51. The average current annuity investor age is 70. See The Gallup Organization 
and Mathew Greenwald & Associates for The Committee of Annuity Insurers, Survey of Ownership of 
Individual Annuity Contracts (2013).   

392  Projected Age Groups and Sex Composition of the Population: Main Projections Series for the United 
States, 2017-2060. U.S. Census Bureau, Population Division: Washington, DC. 



223 

retirement savings.393 Evidence suggests that, on average, individuals may not be saving 

appropriately to meet their retirement goals. For example, one survey found that while 74 percent 

of individuals are saving for retirement: (1) 51 percent of older individuals have less than 

$50,000 saved for retirement, (2) 57 percent of individuals save less than 10 percent of their 

income, and (3) 33 percent of individuals save less than 5 percent of their income.394 In addition 

to the finding that individuals may not be saving an appropriate amount for retirement, there is 

also concern that individuals may not be taking on an appropriate amount of financial risk.395  

Investors may not be saving appropriately to meet their retirement goals for several 

reasons. For example, individuals may face meaningful burdens (e.g., search costs) when trying 

to identify appropriate investments or savings products. Once identified, investors may face 

additional burdens (e.g., acquiring and analyzing large amounts of information) to determine 

which specific investments or saving products among the ones identified allow investors to best 

meet their savings goals.396 Second, improving technology has permitted the development of 

more complex and confusing financial products.397 As a result of the burden associated with 

identifying appropriate investments, as well as the burden of acquiring and analyzing 

 

393  John Y. Campbell, Restoring Rational Choice: The Challenge of Consumer Financial Regulation (NBER 
Working Paper No, 22025, 2016), available at http://www.nber.org/papers/w22025 (“Campbell Paper”). 

394  Insured Retirement Institute, Retirement Readiness Among Older Workers 2021 (2021) (“IRI Survey”), 
available at https://www.irionline.org/wp-content/uploads/legacy/default-document-library/iri-retirement-
readiness-2021_fullreport.pdf. 

395  See Campbell Paper. Campbell argues that individuals take too little financial risk and that the willingness 
to take financial risk varies with wealth—individuals with greater wealth are willing to take on more 
financial risk than individuals with less wealth. 

396  John Y. Campbell, Howell E. Jackson, Brigitte C. Madrian, and Peter Tufano, Consumer Financial 
Protection, 25 J. ECON. PERSPECTIVES 91 (2011) (“Campbell et al. Paper”). Campbell et al. note that 
making decisions about financial products often requires considerable information on terms and conditions, 
particularly for financial decisions that are undertaken only infrequently.   

397  See Campbell Paper. 

http://www.nber.org/papers/w22025
https://www.irionline.org/wp-content/uploads/legacy/default-document-library/iri-retirement-readiness-2021_fullreport.pdf
https://www.irionline.org/wp-content/uploads/legacy/default-document-library/iri-retirement-readiness-2021_fullreport.pdf


224 

information to choose among the set of appropriate investments, investors may spend less time 

and effort (i.e., resources) than is required to make appropriate investment decisions.  

Investors may not be saving appropriately for other reasons, as well. For example, some 

investors may not make the appropriate decisions for themselves even if they were presented 

with all the information that was required to make a decision. Decision making limitations may 

be particularly problematic in the context of saving for retirement because learning from 

experience is difficult. Investing in retirement products is only done infrequently and the 

outcomes from investing decisions are delayed, perhaps for decades, and are subject to large 

random shocks, so that personal experience is slow to accumulate and is contaminated by noise. 

Also, financial innovation can reduce the relevance of an investor’s prior experiences. For 

example, prior experience investing in investment vehicles with unbounded returns would be less 

relevant for investing in RILAs (which have bounded returns) than it would be for investing in 

variable annuities (which have unbounded returns).398 Another possibility is that investors may 

 

398  See Campbell et al. Paper. The Campbell Paper identifies five aspects of “financial ignorance” that may 
lead to poor investor decision making. First, investors may lack understanding of basic concepts necessary 
to make appropriate decisions. For example, investors appear to lack an understanding of diversification 
and the tradeoff between risk and return. Second, investors may not understand the terms of financial 
contracts. Third, it appears that, rather than using all available historical data to form views about future 
returns on alternative strategies, investors rely on their own specific experiences to form an opinion. 
Fourth, individuals appear to not understand their own difficulties with financial decision making. Finally, 
investors appear to not understand the incentives faced by other parties and the effect these incentives have 
on their strategic behavior. Other studies suggest poor investment decisions may result from investor 
uncertainty and lack of investor familiarity with different assets. For example, individuals may not invest 
appropriately because individuals are unable, given historical experience, to form precise estimates of how 
they expect assets to perform in the future. See, e.g., Raymond Kan and Guofu Zhao (2007). Optimal 
Portfolio Choice with Parameter Uncertainty, Journal of Financial and Quantitative Analysis, 27(3), 621-
656.  Rather than being unable to form precise estimates of how they expect assets to perform in the future, 
investors may not have, perhaps due to not having the requisite experience, the ability to form any 
expectation about how they expect an asset to perform in the future.  If investors’ ambiguity is great 
enough, they simply may choose not to invest in particular assets. See, e.g., David Easley and Maureen 
O’Hara (2009). Ambiguity and Nonparticipation: The Role of Regulation, Review of Financial Studies, 
22(5), 1817-1843. Finally, investors may make poor investment decisions because they choose to 
overweight investment in assets with which they are familiar, and underweight, or exclude, investment 
assets with which they are less familiar. See, e.g., Gur Hubberman (2001). Familiarity Breeds Investment, 
 



225 

have preferences that lead them to favor present consumption over future consumption (“present-

biased preferences”) and, as a result, they save an inappropriate amount for retirement.399 

Finally, many people have a limited financial capacity to save, particularly individuals already 

burdened with student loans and mortgages. 

2. Current Regulatory Requirements 

As discussed in section I above, RILAs are securities for purposes of the Securities Act, 

and public offerings of RILAs, therefore, must be registered with the Commission.400 Unlike 

variable annuity contracts for which the Commission has adopted a specific registration form 

tailored to those products, insurance companies register RILA offerings on Form S-1 or Form S-

3.  

Form S-1 is available to any issuer (except foreign governments and issuers of asset-

backed securities) to register securities for which no other registration form is authorized or 

prescribed. A registration statement on Form S-1 contains extensive disclosure about all aspects 

of the issuer’s business and financial condition and consists of two parts: a prospectus (Part I), 

and additional information not required to be included in the prospectus (Part II), but that is 

publicly available on the Commission’s EDGAR website. Form S-1 allows incorporation by 

reference only on a very limited basis. The prospectus must contain financial statements meeting 

the requirements of Regulation S-X, which generally includes audited financial statements 

 

Review of Financial Studies, 14(3), 659-680 and Massimo Massa and Andrei Simonov (2006). Hedging, 
Familiarity, and Portfolio Choice, Review of Financial Studies, 19(2), 633-685.         

399  See Campbell et al. Paper. Campbell et al. note that individuals with present-biased preferences favor 
present consumption which can lead an individual to make decisions today that reduce their future welfare 
in a way that the individual later regrets. 

400  See supra footnote 5 and accompanying text. 



226 

prepared in accordance with GAAP.401 Currently, disclosures about RILA offerings are largely 

unstructured. The audited financial statements in the prospectus, if prepared in accordance with 

GAAP, must be tagged in Inline XBRL if the Form S-1 contains a price or a price range.402 Form 

S-1 must be declared effective by the Commission before any sales of the registered securities 

may be made. The time required for Commission review will depend on the number and 

complexity of Commission comments and the issuer’s ability to adequately address those 

comments. The issuer must pay the Commission registration fee before it files a Form S-1. The 

amount of the fee is based on the proposed maximum aggregate offering price.403 The issuer 

must indicate the amount of each type of security being registered and calculate the fee payable 

for each security.  

Form S-3 is a “short-form” registration statement under the Securities Act that can be 

used by companies that have been subject to reporting obligations under the Exchange Act for at 

least one year and that satisfy certain other requirements.404 Reporting obligations under the 

 

401  Certain Commission letters, or portions thereof, exempt insurance companies from the requirement to 
provide financial statements prepared in accordance with GAAP in connection with the registration of an 
offering of RILAs on Form S-1. As discussed in Section III.B.1.a, 47 RILAs report SAP financials. 

402  See 17 CFR 229.601(b)(101)(i)(B). 
403  Generally, Form S-1 (or S-3) fees paid for a withdrawn registration statement are available to the issuer for 

use with its future registration statements. The amount available for use as an offset under rule 429 under 
the Securities Act equals the portion of the filing fee paid that is associated with any unsold securities of the 
same class registered on an earlier registration statement. Once a filing fee has been used as an offset, those 
unsold securities on the earlier registration statement are deemed deregistered. RILAs are continuously 
offered to investors, who in many cases are long-term investors that may make additional allocations or 
other investment decisions with respect to an investment in a RILA. Because RILA investors may make 
additional allocations or other investment decisions with respect to an investment, unless a prior RILA 
offering is completely unsold, RILA issuers may have increased difficulty in using filing fees associated 
with unsold securities of a prior offerings.       

404  The issuer must be either organized under U.S. law with its principal business operations in the United 
States or a foreign private issuer that reports under the Exchange Act using the domestic reporting forms. 
The issuer must have a class of securities registered under section 12(b) or 12(g) of the Exchange Act, or be 
required to file reports under section 15(d) of the Exchange Act. The issuer must have been subject to the 
reporting requirements of the Exchange Act and have filed all reports and materials required under sections 
 



227 

Exchange Act include audited financial statements prepared in accordance with GAAP and 

structured in Inline XBRL. A registration statement on Form S-3 contains extensive disclosure 

about all aspects of the issuer’s business and financial condition and consists of two parts: a 

prospectus which includes, either directly or incorporated by reference from the issuer’s 

Exchange Act filings, detailed information about the issuer (Part I), and additional information 

not required to be included in the prospectus (Part II), but that is publicly available on the 

Commission’s EDGAR website.  

Registration using Form S-3 offers issuers advantages over registration using Form S-1. 

First, Form S-3 allows significant incorporation by reference, which allows for shorter 

prospectuses and makes Form S-3 easier to complete. Also, Form S-3 also allows for forward 

incorporation by reference, eliminating the need to file post-effective amendments to keep 

registration statements current.  

A Form S-3 filed by a non-WKSI must be declared effective by the Commission. A Form 

S-3 receives either a full review, a targeted review of one or more sections of the registration 

statement, or no review. Commonly, a full review takes approximately 30 days with targeted 

reviews taking less time. The time to resolve any Commission comments will depend on the 

number and complexity of the Commission’s comments. An issuer must pay Commission filing 

fees before it files Form S-3. The amount of the filing fee is based on the proposed maximum 

aggregate offering price. 

 

13, 14, and 15(d) of the Exchange Act for the 12 calendar months preceding the filing of Form S-3, and, 
with certain exceptions, must have timely filed all such reports and other materials required to be filed 
during the 12 calendar months and any portion of a month immediately preceding the filing of the 
registration statement. An issuer that meets all of the requirements of Form S-3 and that has a public float 
of $75 million or more (i.e., “seasoned issuers”) may use Form S-3 to register any offering of debt or equity 
for cash.   



228 

Under the Federal securities laws applicable to all securities (including RILA offerings), 

it is unlawful for any person to use materially misleading communications in connection with the 

offer or sale of any security.405 Rule 156 is an interpretive rule that provides factors to be 

weighed in considering whether a statement involving a material fact is or might be misleading 

in the specific context of investment company sales literature, including literature relating to the 

sale of variable annuities. 

As discussed in section I above, in 2022 Congress enacted the RILA Act directing the 

Commission to adopt a new registration form for RILAs within 18 months of enactment (i.e., the 

end of June 2024). If the Commission fails to adopt the form by the end of June 2024, the RILA 

Act provides that issuers can begin registering the offering of RILAs on Form N-4. 

3. Market Practice 

Annuities can play a role in helping investors save for retirement and receive guaranteed 

lifetime income during retirement.406 There are multiple types of annuities available to help 

investors who have different financial goals or tolerances for risk save for retirement: fixed 

annuities, variable annuities, and RILAs. Fixed annuities offer investors preservation of their 

investment by guaranteeing a minimum rate of return, but with little opportunity for asset 

growth. During the accumulation phase,407 a traditional (i.e., book value) fixed annuity offers 

 

405  See 15 U.S.C. 77q(a); 15 U.S.C. 78j(b); 17 CFR 240.10b-5. 
406  Id. The IRI Fact Book argues that annuities give investors the ability to create their own pensions. The IRI 

Fact Book also argues that, unlike mutual funds, annuities offer a wide variety of guarantees to protect an 
investor’s investment. For example, death benefits provide principal protection in the event that an investor 
dies during a market downturn.   

407  During the accumulation phase, also called the savings phase, capital builds up. In this phase, the investor 
pays premiums into the contract to accumulate assets. See IRI Fact Book. 



229 

investors a fixed rate of return (known in advance) for a given period of time.408 A market value 

adjusted annuity (see section II.H) is similar to a traditional annuity, but the assets are subject to 

a market value adjustment based on interest rate changes.409 Fixed index annuities guarantee a 

certain rate of return,410 but also provide the potential for (limited) additional returns based on 

the performance of a specified market index.411  

Variable annuities accumulate savings based on the performance of the underlying 

investment options chosen by an investor. Typically, investors are able to choose among 

investment options that pass on the returns of a wide variety of mutual funds such as equity 

funds, bond funds, funds that combine equities and bonds, actively managed funds, index funds, 

domestic funds, and international funds.412 Depending on the investment options chosen, 

variable annuities can offer investors the greatest opportunity for asset growth, but they also can 

involve the greatest amount of investment-based risk, compared to other types of annuities.413 

 

408  Id. The IRI Fact Book also notes that fixed annuities involve less investment risk because they offer a 
guaranteed minimum rate of interest. The minimum rate is not affected by fluctuations in market interest 
rates. 

409  Id. The IRI Fact Book contends that fixed index annuities are designed for investors who want to partake in 
the benefits of a market-linked vehicle with a protected investment floor if there is a downturn in the index. 

410  Currently, insurance companies with a minimum A.M. Best Insurance Ratings of A- offer fixed rate 
annuities that guarantee between 3.70% and 5.40% for a three-year period, and between 3.20% and 5.25% 
for a ten-year period. Multi-Year Guarantee Annuities (MYGA), ANNUITY ADVANTAGE (accessed Aug. 
17, 2023, and filtered by “State” of “- All”; “Min AM Best” of “A-”; “Years” of “10”; and “Range” of 
“Exact”), https://www.annuityadvantage.com/annuity-rates-quotes/multi-year-guarantee-
annuities/?rating=4&years=10&pos=300&sort=guarantee_period_yield&limit=all.  

411  IRI Fact Book. 
412  Id. 
413  Additionally, variable annuities often involve direct fees, such as insurance charges, and indirect expenses, 

including management and other fees and expenses associated with the underlying mutual funds in which 
the variable annuity subaccounts invest. See IRI Fact Book. 

https://www.annuityadvantage.com/annuity-rates-quotes/multi-year-guarantee-annuities/?rating=4&years=10&pos=300&sort=guarantee_period_yield&limit=all
https://www.annuityadvantage.com/annuity-rates-quotes/multi-year-guarantee-annuities/?rating=4&years=10&pos=300&sort=guarantee_period_yield&limit=all


230 

RILAs are an index-linked product that can be purchased by individual investors as part 

of both qualified and non-qualified retirement accounts.414 RILAs combine features of fixed-

index annuities and variable annuities. RILAs limit or reduce downside risk in return for an 

investor accepting limited upside performance. In exchange for giving up the complete 

protection of principal offered by fixed annuities, a RILA investor is potentially afforded greater 

upside potential than that provided by fixed annuities, though typically less than the potential 

upside of investing in the same index within a variable annuity.415 RILAs allow investors some 

ability to customize a level of risk with which they are comfortable.416 Like other annuities, 

RILAs have an accumulation phase followed by a payout phase. The accumulation phase is 

divided into one or more crediting periods.417 Also like other annuities, after a “surrender 

charge” period (generally, 3 to 10 years following an investor’s last premium payment), 

investors can usually surrender their contract at the end of any crediting period and receive full 

account value.418 Investors, however, may lose money if they withdraw early from an investment 

option or from the contract, as explained in section I.A above. 

At the end of a crediting period, the issuer credits a RILA investor’s contract value with 

“interest” (which can be either positive or negative) that is based on the performance of a 

 

414  Thorsten Moenig, It's RILA Time: An Introduction to Registered Index-Linked Annuities, 89 J. RISK & INS. 
339 (2022) (“Moenig Paper”). 

415  See IRI Fact Book. 
416  Id. The IRI Fact Book also contends that historically investors generally fell into one of two camps: those 

willing to exchange safety of principal for modest returns, and those able to tolerate the higher risk of being 
invested in securities in exchange for greater upside potential. RILAs address a developing demand for 
products that allow investors some ability to customize a level of risk with which they are comfortable. 
Structured annuities (i.e., RILAs) meet the needs of the in-between investor who wants some degree of 
certainty but also desires some upside potential.   

417  Id. 
418  Id.   



231 

specified index, subject to restrictions on the upside, through a cap and/or “participation rate,” as 

well as some form of downside protection.419 If the index declines, the credited loss is lessened 

by either a floor (a maximum loss percentage), a buffer (index losses are credited to the RILA 

investor’s contract value only when they exceed a certain threshold), or a downside participation 

rate (the loss credited to contract value is a certain percentage of the index loss).420 RILA 

downside protection mechanisms typically do not change over time, whereas issuers may, and 

likely will, change upside limits on gains for both new contracts as well as existing contracts to 

reflect changing market conditions.421 If a RILA contract offers downside protection in the form 

of a floor, then the increased volatility would expose the issuer to greater downside risk. To 

offset the increased downside risk, an issuer might choose to reduce its upside risk by lowering 

cap rates.422 If the RILA contract offers downside protection in the form of a buffer, then 

increased volatility would expose the issuer to reduced downside risk. The reduced downside 

risk might cause issuers to increase cap rates.423 

Also, unlike variable annuities, most RILAs do not include any direct ongoing fees or 

charges to the investor. Insurance companies, however, can benefit from offering RILAs in at 

least three ways. First, insurance companies can benefit from a favorable imbalance between the 

downside protections that a RILA contract offers, and the upside limits the contract offers.424 

 

419  Id. 
420  Id. The Moenig Paper argues that RILAs are structurally similar to fixed-index annuities except that RILAs 

may credit negative returns. A fixed-index annuity can be viewed as a special case of a RILA with a floor 
of 0%. The insurer provides full protection on the index return in exchange for a low cap rate (commonly 
between 2% and 4%). 

421  See Moenig Paper.  
422  Id. 
423  Id. 
424  Id.  



232 

That is, insurance companies set the level of upside limits such that their value (to the issuer) 

exceeds the cost of providing the downside protection mechanism to investors.425 One study 

estimates an average annual cost to investors from the imbalance between the downside 

protections that a RILA contract offers and the upside limits is approximately 0.17% of the RILA 

investment amount.426 To assess if the findings of the study continue to be relevant for the 

current RILA market, the staff conducted an independent analysis of RILA contract terms. 

Specifically, staff examined 24 one-year term rates linked to the S&P 500 index, Nasdaq 100 

index, Russell 2000 index, and MSCI EAFE.427 These rates were offered by three insurance 

companies across a two-week interval.428 In particular, staff calculated the fair value of the 

portfolio, composed of a risk-free zero-coupon bond with one-year maturity and a collection of 

hypothetical index options with one-year expiration that would replicate the promised payoff for 

 

425  We understand that for shorter crediting periods and for common indexes such as the S&P 500, insurance 
companies are able to use exchange-traded derivative securities to closely approximate the insurer’s 
liabilities from a RILA contract at the end of each crediting period. For example, for a RILA with both a 
floor and a cap, the insurance company can hedge its liability by purchasing a call option (with an 
appropriate strike price given the floor) and selling a call (with a higher strike price that is dependent on the 
cap). The insurance company can offer a cap such that the proceeds from selling the call with the higher 
strike price exceed the cost of purchasing the call option with the lower strike price. For a RILA with a 
downside buffer (as opposed to a floor) and a cap, the process for insurance companies to hedge their 
liabilities is similar, but with a different mix of options. In the case of a RILA with a downside buffer and a 
cap, the insurance company would purchase a call option, sell a call option (with a higher strike price), and 
selling a put option (with a lower strike price, as appropriate given the downside buffer). In this case, the 
insurance company can offer a cap such that the proceeds from selling the call and the put exceed the cost 
of the call option with the lower of the two strike prices.         

426  See Moenig Paper; Public Filings on EDGAR.  
427  The staff obtained the term rates from Rates: Current rates for Allianz Index Advantage ADV Variable 

Annuity, ALLIANZ, https://www.allianzlife.com/what-we-offer/Annuities/registered-index-linked-
annuities/index-advantage-adv/rates (visited Sept. 14, 2023); Variable Annuities, EQUITABLE, 
https://equitable.com/retirement/products/variable-annuities (click “View Performance Cap Rates”) (visited 
Sept. 14, 2023); Nationwide Defender Annuity, NATIONWIDE (Sept. 1, 2023),  (visited Sept. 14, 2023).. 

428  Each contract designates a distinct set of buffer and cap rates with no additional features. The sample 
period spans from September 5 to 15, 2023. The Moenig Paper cited an industry survey as a source for the 
data in its analysis.  We understand that the industry survey cited does not contain updated product-level 
contract-level details beyond the data cited in the Moenig Paper. We request comment on data sources 
(e.g., pricing vendors) that should be considered for these calculations.  See infra section III.F. 

https://www.allianzlife.com/what-we-offer/Annuities/registered-index-linked-annuities/index-advantage-adv/rates
https://www.allianzlife.com/what-we-offer/Annuities/registered-index-linked-annuities/index-advantage-adv/rates
https://equitable.com/retirement/products/variable-annuities


233 

each contract.429 Staff used the Black-Scholes formula for European options to derive fair prices 

of these hypothetical index options. In estimating the implied volatility for each specific strike 

price, staff utilized an estimated one-year volatility surface.430 The volatility surface estimates 

the values for implied volatility across a range of standardized options with varying implied 

strike prices, including both calls and puts. Staff then linearly interpolated between the implied 

volatilities with implied strikes adjacent to the strike price of each hypothetical option to obtain 

the implied volatility. This implied volatility is used as an input in the Black-Scholes formula to 

derive the fair values of the options.431 Staff assumed that the options expire in exactly one year. 

The annual cost of each contract is defined as the difference between the par value and the 

calculated risk-neutral fair price of the contract, divided by the par value.432 

Table 10 presents the mean and median annual costs for each of the twenty-four contracts 

during the sample period. The annual costs hover around zero for all contracts. The mean annual 

costs are positive for nearly all of the contracts, ranging from 0.04% for contract 22 and 0.93% 

for contract 20, but negative for others, such as contract 1, contract 2, contract 3, and contract 16.  

These results are consistent with the Moenig Paper’s findings of a mean cost of 0.17%. 

Table 10: Pricing of twenty-four sample RILA contracts 

 

429  More specifically, the options position encompasses a long At-the-Money (ATM) call option, coupled with 
a short Out-the-Money (OTM) call option with strike price equal to the index value increased by a factor of 
the cap rate and a short OTM put option with strike price equal to the index value decreased by a factor of 
the buffer rate. 

430  The volatility surface data is obtained through IvyDB OptionMetrics. 
431  The other model inputs – the end-of-day S&P 500 index value and the risk-free interest rate – are obtained 

through IvyDB OptionMetrics. 
432  The staff incorporated any explicit annual product fee charged by the insurance company into the cost 

calculation. This analysis could be extended to incorporate several additional factors that differentiate the 
RILA from the replicating strategy that would be priced in a market. For example, it does not consider any 
effective difference to the investor in liquidity because of early withdrawal charges or penalties, differences 
in portfolio value prior to maturity, death benefits, or specific crediting methods. We request comment on 
these aspects of pricing of RILA contracts below. See infra section III.F. 



234 

  Mean Median  

Contract 1 -0.30% -0.30%  

Contract 2 -0.64% -0.64%  

Contract 3 -0.30% -0.29%  

Contract 4 0.57% 0.61%  

Contract 5 0.34% 0.34%  

Contract 6 0.37% 0.50%  

Contract 7 0.42% 0.44%  

Contract 8 0.39% 0.40%  

Contract 9 0.60% 0.58%  

Contract 10 0.72% 0.74%  

Contract 11 0.51% 0.46%  

Contract 12 0.09% 0.09%  

Contract 13 0.22% 0.22%  

Contract 14 0.24% 0.25%  

Contract 15 0.35% 0.36%  

Contract 16 -0.08% -0.11%  

Contract 17 0.16% 0.11%  

Contract 18 0.12% 0.13%  

Contract 19 -0.08% -0.22%  

Contract 20 0.93% 0.93%  

Contract 21 0.63% 0.64%  

Contract 22 0.04% 0.04%  

Contract 23 0.33% 0.33%  

Contract 24 0.38% 0.38%  
Note: The table summarizes the annual costs for each of the twenty-four contracts offered by three insurance 
companies during a two-week interval. See Rates: Current rates for Allianz Index Advantage ADV Variable 
Annuity, ALLIANZ, https://www.allianzlife.com/what-we-offer/Annuities/registered-index-linked-annuities/index-
advantage-adv/rates (visited Sept. 14, 2023); Variable Annuities, EQUITABLE, 
https://equitable.com/retirement/products/variable-annuities (click “View Performance Cap Rates”) (visited Sept. 
14, 2023); Nationwide Defender Annuity, NATIONWIDE (Sept. 1, 2023), 
https://nationwidefinancial.com/media/pdf/VAM-3629AO.pdf (visited Sept. 14, 2023). At the end of each 
business day, we employ a market price approach to compute the fair value of each contract. We then compare 
the fair value to the par value to derive the annual cost and incorporate any explicit product fee. Subsequently, we 
compute the mean and median annual costs for each contract over the two-week measurement period. 

Also, we understand that, generally, insurance companies can benefit from offering 

RILAs by investing RILA proceeds into fixed-income securities such as corporate bonds, 

thereby earning a “credit risk premium.” Further, insurance companies can benefit when a RILA 

offers index-linked options whose index for measuring performance is a price-based index that 

does not account for dividend payments. For example, if an investor chooses an index-linked 

https://www.allianzlife.com/what-we-offer/Annuities/registered-index-linked-annuities/index-advantage-adv/rates
https://www.allianzlife.com/what-we-offer/Annuities/registered-index-linked-annuities/index-advantage-adv/rates
https://equitable.com/retirement/products/variable-annuities
https://nationwidefinancial.com/media/pdf/VAM-3629AO.pdf


235 

option whose performance is based, in part, on the S&P 500 Price Return Index, the credited 

return may be based on the point-to-point change in the S&P 500, which does not include the 

dividend payments of the underlying stocks.433 The excluded dividends can act as an implicit 

“fee” on investors with the magnitude of the implicit fee being comparable to average dividend 

rates among the underlying index stocks.434  

While most RILAs do not include any explicit ongoing fees or charges to the investor, 

RILAs typically have charges for early or mid-term withdrawals. As discussed in section 

II.B.2.a, charges for early or mid-term withdrawals could include, surrender charges, contract 

adjustments, and transaction charges (separate from surrender charges).435    

RILAs differ from other annuity contracts in other ways as well. Variable annuities 

involve a direct investment of premiums into subaccount(s) that correspond to one, or more, of 

many mutual funds. RILA premiums, on the other hand, are not directly invested into the assets 

of the underlying index, and typically investors can only choose among index-linked options 

whose returns are based on a small number of mainstream indexes.436 Also, the financial 

guarantees common to variable annuities are long term and are only applied when the contract 

terminates, either at maturity or due to the investor’s death, or if the account value reaches zero 

due to guaranteed withdrawals.437 These factors make variable annuity guarantees difficult to 

 

433  See supra footnote 431. 
434  Id. The Moenig Paper provides the following example. If stock prices rise by 7% on average over the 

crediting period, in addition to paying 2% in dividends, then the RILA account would be credited 7%, even 
though investors in the underlying stocks would earn a 9% return. Omitting dividend payments benefits 
insurers by reducing the cost of providing a given amount of downside protection (e.g., through lower 
option prices). 

435  See also supra footnote 431. 
436  See Moenig Paper. 
437  Id. 



236 

value and hedge due to their long-term nature (potentially 25 years, or more).438 The guarantees 

that RILA contracts offer as part of their bounded return structure, on the other hand, are short-

term (i.e., they are limited to the crediting period of the index-linked option the investor selects, 

which is usually one, two, three, or six years) and tied to the performance of a common index, so 

that issuers can hedge the embedded liabilities accurately through the financial markets.439  

Further, guarantees that RILA contracts offer may be much less dependent on investor 

behavior than variable annuity guarantees. Variable annuity investors may have a strong 

incentive to surrender or exchange their policy when an embedded guarantee loses its value (i.e., 

moves “out of the money”).440 The guarantees RILA contracts offer reset with the end of the 

crediting period of the index-linked option the investor selects, so such guarantees are more 

commonly “at the money” and investors do not have as strong of an incentive to surrender or 

exchange their policies.441  

Additionally, RILAs and variable annuities differ with respect to their use of proceeds. 

As discussed in Section II.B.4, variable annuity proceeds are held in separate accounts and, 

therefore, insulated from the issuer’s creditors. Variable annuity proceeds in unitized sub-

accounts must be invested as the investor chooses and returns are credited to the account directly. 

Like variable annuity proceeds, RILA proceeds are placed into a (non-unitized) separate account. 

As a result, the proceeds are not insulated from the issuer’s creditors. Also, RILA proceeds can 

be invested as the issuer sees fit.  

 

438  Id. 
439  Id. 
440  Thorsten Moenig and Nan Zhu (2018). Lapse-and-Reentry in Variable Annuities, Journal of Risk and 

Insurance, 85(4), 911-938 (“Moenig and Zhu Paper”). 
441  See Moenig Paper. 



237 

 We understand that for index-linked options offering shorter crediting periods, and 

whose returns are based on common indexes such as the S&P 500 Index, insurance companies 

are able to invest RILA proceeds in exchange-traded derivative securities that closely 

approximate the issuer’s liabilities from a RILA contract at the end of each crediting period.442 In 

doing so, insurance companies are able to hedge away their risk at a low cost. Further, we 

understand that insurance companies can, and do, invest the remaining proceeds into fixed-

income securities (e.g., corporate bonds) that allow them to earn a “credit risk premium.”443 The 

credit risk premium can be an important source of benefits to issuers.444 

C. Benefits and Costs  

1. Benefits 

a. Use of Form N-4 

Unlike variable annuity offerings that are registered on Form N-4, insurance companies 

register RILA offerings on Forms S-1 or S-3. These forms include a number of disclosure 

requirements that are specific to the insurance company issuing the RILA that the Commission 

does not require in the registration statements for offerings of variable annuities.  

We are proposing that insurance companies use Form N-4 to register the offering of 

RILAs and we are proposing to adapt Form N-4 for that purpose.445 Because it is an existing 

form, we believe RILA issuers and investors are familiar with Form N-4. As a result of 

expanding the scope of Form N-4 to address RILAs, RILA offerings would be registered on the 

same form as variable annuities. Requiring that insurance companies register RILA offerings on 

 

442  Id. 
443  Id. 
444  Id. 
445  See proposed General Instruction B.1 of Form N-4. 



238 

Form N-4 would leverage insurance-product specific disclosure requirements reflected in the 

form and also would permit the summary prospectus layered disclosure framework the 

Commission adopted in 2020 for variable annuities.  

The following sections discuss the specific benefits deriving from the contents and 

requirements of the form in detail. In addition to these benefits, expanding the scope of Form N-

4 to include RILAs would benefit investors by making it easier for them to evaluate and compare 

RILAs, and also to compare other annuity products with RILAs. For example, investors may 

require less effort to evaluate and compare annuity products that register using the same form. To 

the extent that investors require less effort to evaluate and compare these annuity products, 

investors may be more likely to make decisions that better align with their investment goals.  

b. Contents of Form N-4 

The proposal is designed to facilitate the Commission’s goal it sought to achieve in 

adopting Form N-4, namely to help investors make an informed investment decision regarding 

the annuity products that are registered on that form. The registration process on Form N-4 uses 

a layered disclosure approach designed to provide investors with key information relating to the 

contract’s terms, benefits, and risks in a concise and more reader-friendly presentation, with 

access to more detailed information for those investors who want it. Providing investors with key 

information is particularly important in the context of annuity contracts since their structure is 

typically more complex than other types of investment products commonly sold to retail 

investors. 

Specifically, the proposal would update the contents of Form N-4 to specifically address 

RILAs, including by: (1) amending the form’s general instructions; (2) amending the 

requirements for front and back cover pages; (3) updating the Key Information Table; (4) 

providing new principal disclosures regarding RILA investment options; and (5) providing for 



239 

new contract adjustment and fee disclosures. The proposal would also include certain other 

technical and conforming amendments to Form N-4 and related rules designed to accommodate 

the inclusion of RILA offerings on that form as well as requiring the insurance company to 

provide disclosure in response to the remaining items on Form N-4 to the extent applicable.   

(1) General Instructions 

The proposal would require RILA offerings registered on Form N-4 to comply with the 

general instructions of that form, including requirements related to: (1) using document design 

techniques that promote effective communication, (2) organizing information to make it easier 

for investors to understand, (3) including information in the prospectus or SAI not otherwise 

required so long as the additional information is not incomplete, inaccurate, or misleading, and 

does not obscure or impede understanding of the information that is required, (4) requiring Form 

N-4 filers to define special terms used in the prospectus in any presentation that clearly conveys 

meaning to investors, (5) allowing insurance companies to describe multiple contracts that are 

essentially identical in a single prospectus, (6) making available the dates of both the prospectus 

and SAI, (7) providing an interactive data file related to certain information on the form, (8) 

requiring insurance companies to include active hyperlinks, or other means of facilitating access 

that leads directly to the relevant website, for an electronic version of the prospectus, and (9) the 

use of incorporation by reference. The general instructions are designed to require clear and 

consistent disclosure to investors about annuity contracts currently registered on the form and to 

make clear how filers must prepare and file their registration statements.  

We believe clear disclosure benefits investors by making it easier for investors to 

evaluate and compare offerings. Concise and decision-useful disclosures can help facilitate the 

investment decision-making process. Also, the presentation of information in a consistent 



240 

manner could facilitate not only the evaluation and comparison among RILA offerings, but also 

could facilitate the comparison of RILAs to other annuity products.446 Further, certain investors, 

while aware of variable annuities, simply may not be aware of RILAs as an investment option. 

Presentation of information in a consistent manner on Form N-4 could increase investor 

awareness of RILAs as an investment option.     

(2) Front and Back Cover Pages 

The proposal would make certain changes to information currently required on the front 

and back pages of a prospectus for all registrants on Form N-4. Like variable annuities registered 

on Form N-4, RILAs would be required to present certain information on the front and back 

cover pages of the prospectus. The proposal would require several new cover page disclosures 

for all Form N-4 issuers. One of these would provide additional information distinguishing 

among the investment options available in the annuities registering on Form N-4 and cross-

reference the prospectus appendix that provides additional information about each option. These 

changes could help investors better understand what investment options are available under the 

contract, in an easily identifiable location. Also, the proposal would require the inclusion of three 

new legends that highlight risks that are particularly prevalent in RILAs. The new legends that 

highlight risk that are particularly prevalent in RILAs should benefit investors by putting them 

on notice of these key considerations at the outset, helping the investor make informed decisions. 

(3) Key Information Table 

As required for current Form N-4 issuers, the proposal would require RILA issuers to 

provide a Key Information Table in their registration statements. The KIT includes a summary of 

 

446  The consistent presentation of information also could facilitate information collection by third parties such 
as investment advisers and data aggregators who could then, in turn, provide information to investors.241 

five areas: (1) fees and expenses, (2) risks, (3) restrictions, (4) taxes, and (5) conflicts of interest. 

The KIT is important summary disclosure for investors that is included in the prospectus, and the 

proposed amendments to the KIT requirements are intended to highlight important 

considerations related to RILAs, including certain unique and/or opaque aspects of RILAs.447 

Consistent with our layered disclosure approach for variable annuities registered on Form N-4, 

RILA issuers would be required to provide cross-references in the KIT to the location in the 

statutory prospectus where the subject matter is described in greater detail. Certain of the 

amended KIT requirements would apply to all Form N-4 issuers. In particular, in a change from 

the current KIT requirements for Form N-4 issuers, the amendments would require that 

responses in an item be presented in a Q&A format.448 In a change for all Form N-4 issuers, the 

proposal also would change the order in which the KIT appears relative to the Overview of the 

Contract disclosures in the prospectus.  

Overall, the proposed KIT requirements (like the current KIT requirements for variable 

annuities) are designed to provide a brief description of key facts about a RILA in a specific 

sequence and in a standardized presentation that is designed to be easy to read and navigate. We 

believe that a standardized presentation that is designed to be easy to read and navigate benefits 

investors by making it easier for investors to evaluate and compare RILA offerings. Also, the 

standardized presentation of information could facilitate not only the evaluation and comparison 

 

447  Many of the summary points presented in the KIT are discussed in greater detail in other parts of the form. 
In this way, the KIT is an integral part of the layered disclosure approach the Commission traditionally has 
taken with annuity products. To ensure that the KIT serves this function effectively, we also are proposing 
to delete Form N-4’s general instruction stating that where the discussion of information required by the 
Overview of the Contract (currently Item 3) or KIT (currently Item 2) also responds to the disclosure 
requirements in other items of the prospectus, registrants need not include additional disclosure in the 
prospectus that repeats the information disclosed in the Overview of the Contract or the KIT. See infra 
footnote 84 and accompanying text.  

448  Currently, such format is suggested but not required. See General Instruction C.3.(c) of Form N-4. 



242 

among RILA offerings, but also could facilitate the comparison of RILAs to other annuity 

products.  

(4) Principal Disclosure Regarding RILA Offerings 

The proposal would amend Form N-4 to require disclosure that would provide investors 

with information about all annuities whose offerings are registered on Form N-4 as well as with 

specific information about RILAs and the index-linked options available under the RILA 

contracts. With regard to Form N-4 issuers generally, the proposal would require registrants to 

disclose investment option risk, early withdrawal risk, contract benefits risk, insurance company 

risk, and the risk of contract changes. With regard to specific information about RILAs, the 

proposal includes requirements related to: (1) information about RILAs generally and an 

overview of certain key elements of any index-linked option offered under the contract; (2) a 

more in-depth description of index-linked investment options available under the contract; (3) 

the inclusion of an appendix that consolidates certain summary information related to index-

linked options and fixed options available under the contract (which would accompany similar 

information about variable options offered under a “combination” contract); and (4) certain 

principal risk disclosures relating to investing in the RILA contract that the prospectus describes.  

The proposed disclosure requirements are designed to provide additional information 

regarding the risk of investing in Form N-4 issuers generally, as well as the unique aspects of 

RILAs and certain summary and detailed information about index-linked options available under 

a RILA contract. The information could benefit investors by making it easier for investors to 

evaluate and compare variable annuity products registered on Form N-4. The required disclosure 

relating to index-linked and fixed options available under a contract could benefit investors by 



243 

facilitating the comparison of these investment options to other investment options available 

under the contract, as well as to investment options that other RILA contracts offer.    

(5) Addition of Contract Adjustments and Other Amendments to Fee and Expense 

Disclosures 

RILA investors have the ability to take a withdrawal or transfer out their money before 

the end of a crediting period. If amounts are removed from an investment option before the end 

of a crediting period, typically an insurance company will apply an interim value adjustment to 

the investor’s contract value. The IVA, which will adjust the contract value based on a formula, 

can move up and down as market conditions change throughout the crediting period and may 

adjust daily. The IVA is irrelevant if the investor does not move money from an investment 

option until the end of the crediting period, but it becomes relevant if the investor withdraws or 

transfer the money before the end of a crediting period. Similarly, a positive or negative market 

value adjustment could apply if amounts are partially or fully withdrawn from the contract before 

the end of a specified period. These contract adjustments, whose calculation varies by insurance 

company, may have a positive or negative effect on the value of the contract. 

We propose amendments to Form N-4 to require specific disclosures with respect to 

contract adjustments. Currently, Form N-4 requires variable annuity registrants to provide 

comprehensive information on the fees and expenses that investors will pay when buying, 

owning, and surrendering a contract, including expenses paid each year during the time the 

investor owns the contract. Although RILAs typically do not charge the explicit fees and 

expenses common to variable annuities, they do typically utilize contract adjustments. Since 

negative adjustments may result in substantial costs to investors, we believe that it is important to 

include a detailed description of contract adjustments in the registration statement. 



244 

Specifically, we are proposing to expand current disclosure requirements to address 

contract adjustments that could affect investors’ contract value when buying, owning, and 

surrendering or making withdrawals from an investment option. We are also proposing certain 

other specific disclosures about contract adjustments, such as requiring disclosures about the 

maximum potential loss that an investor could experience in connection with a negative contract 

adjustment. 

We believe that these disclosures would benefit investors since they would be able to 

better evaluate the costs of purchasing and owning annuity contracts, including RILAs. In 

addition, these disclosures can make less-informed investors aware of RILAs’ unique 

characteristics, which could increase investor understanding of RILAs as an investing option. 

(6) Other Amendments to Form N-4 

The proposal would include certain other amendments to Form N-4 and related rules 

designed to accommodate the inclusion of RILA offerings on Form N-4. These include 

amendments to Form N-4’s facing sheet, definitions, exhibit list, and required representations, as 

well as amendments to certain Securities Act rules that help to implement the proposal. Because 

these other amendments to Form N-4 and related rules are designed to accommodate the 

inclusion of RILA offerings on Form N-4, the benefits that could accrue as a result of these other 

amendments are those that result from RILA issuers registering offerings on Form N-4 rather 

than Form S-1 or Form S-3.  

The proposal would also amend Form N-4’s required exhibits list to add new Item 27(p) 

for all issuers, which would require the filing of any power of attorney included pursuant to rule 

483(b). While this exhibit is already required to be filed with a Form N-4 registration statement 

under rule 483(b), practices differ in regard to the placement of a required power of attorney 



245 

exhibit within the exhibit list. This amendment would benefit investors in comparing these 

exhibits for all annuity products whose offerings are registered using Form N-4 by standardizing 

the location of these exhibits in the registration statement. Facilitating the comparison of annuity 

products could benefit investors by helping them to invest in RILAs in a manner that is 

consistent with their overall financial needs and objectives. 

We are also proposing to add new Item 31A in Form N-4 to require census-type 

information on RILAs offered in connection with the applicable registration statement. Under 

this proposed new item, an insurance company would have to provide information regarding any 

RILA offered through the registration statement, as of the most recent calendar year-end, 

including (1) the name of each contract; (2) the number of contracts outstanding; (3) the total 

value of investor allocations attributable to index-linked options; (4) the number of contracts sold 

during the prior calendar year; (5) the gross premiums received during the prior calendar year; 

(6) the amount of contract value redeemed during the prior calendar year; and (7) whether the 

contract is a combination contract. The information in new Item 31A would help the 

Commission and staff in identifying trends in insurance companies’ offerings of RILAs and have 

a more complete understanding of the marketplace for annuity securities. 

We also propose amendments to Item 34 of Form N-4 to require RILA issuers to include 

two specific undertakings in their registration statements on Form N-4: (1) to file, during any 

period in which offers or sales are made, through a post-effective amendment to its registration 

statement, any prospectus required by section 10(a)(3) of the Securities Act and, (2) that, for the 

purposes of determining liability under the Securities Act, each post-effective amendment shall 

be deemed to be a new registration statement relating to the securities offered therein, and the 

offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. 



246 

These proposed undertakings are the same as two undertakings RILA issuers currently provide in 

registration statements. We believe that it remains appropriate for RILA issuers to continue to 

furnish these representations concerning post-effective amendments to a registration statement 

as, under the proposed amendments, RILAs may be continuously offered on a registration 

statement for an indefinite amount of time. 

(7) Remaining Items 

The proposal would require RILA issuers to provide disclosure in response to the 

remaining items on Form N-4 to the extent applicable. These are items that we have previously 

determined are relevant in the context of variable annuity offerings. Requiring RILA filers to 

provide disclosure in response to the remaining items on Form N-4 to the extent applicable 

would help ensure that comparable information is provided in a standardized, consistent manner 

for all filers using Form N-4.  

We believe standardized, consistent disclosure of comparable information benefits 

investors by making it easier for investors to evaluate and compare RILA offerings. Also, the 

presentation of information in a standardized, consistent manner across all filers using Form N-4 

could facilitate not only the evaluation and comparison among RILA offerings, but also could 

facilitate the comparison of RILAs to variable annuities. Further, certain investors, while aware 

of variable annuities, simply may not be aware of RILAs as an investment option. Presentation 

of information in a standardized, consistent manner on Form N-4 could increase investor 

awareness of RILAs as an investing option. Facilitating the comparison of annuity products 

could benefit investors by helping them to invest in RILAs in a manner that is consistent with 

their overall financial needs and objectives. 

(8) Inline XBRL 



247 

The proposal would require many of the newly added disclosures on Form N-4 to be 

structured (i.e., tagged) in Inline XBRL, a structured, machine-readable data language.449 In 

addition, RILA issuers would have to tag those prospectus disclosures that Form N-4 currently 

requires to be tagged. 

Currently, disclosures about RILA offerings are largely unstructured; only the insurance 

company’s financial statements, if reported in GAAP and included in a registration statement 

that includes a price or price range, are required to be tagged in Inline XBRL.450 Certain of the 

existing disclosures on Form N-4 are required to be tagged in Inline XBRL.451 

The proposed tagging requirements are designed to make the tagged disclosures more 

readily accessible for aggregation, comparison, filtering, and other analysis. As a point of 

comparison, XBRL requirements for public operating company financial statement disclosures 

have been observed to improve investor understanding of the disclosed information.452 While 

those observations are specific to operating company financial statement disclosures (including 

footnotes), and not to disclosures on Form N-4, they indicate that the proposed Inline XBRL 

requirements would provide investors with increased insight into key features of the contract that 

 

449  See supra section II.B.9.. 
450  See supra footnote 402. 
451  Currently tagged disclosures include: Item 2 (Key Information), Item 4 (Fee Table), Item 5 (Principal Risks 

of Investing in the Contract), Item 10 (Benefits Available under the Contract), and Item 17 (Portfolio 
Companies under the Contract). See Instruction C.3.h of Form N-4; 17 CFR 232.405(b)(2)(iii).  

452  See, e.g., Birt, J., Muthusamy, K. & P. Bir, XBRL and the Qualitative Characteristics of Useful Financial 
Information, 30 ACCOUNT. RES. J. 107 (2017) (finding “financial information presented with XBRL 
tagging is significantly more relevant, understandable and comparable to non-professional investors”); 
Cahan, S.F., Chang, S., Siqueira, W.Z. & K. Tam, The roles of XBRL and processed XBRL in 10-K 
readability, J. BUS. FIN. ACCOUNT. (2021) (finding 10-K file size reduces readability before XBRL’s 
adoption since 2012, but increases readability after XBRL adoption, indicating “more XBRL data improves 
users’ understanding of the financial statements”); Efendi, J., Park, J.D. & C. Subramaniam, Does the 
XBRL Reporting Format Provide Incremental Information Value? A Study Using XBRL Disclosures 
During the Voluntary Filing Program, 52 ABACUS 259 (2016) (finding XBRL filings have larger relative 
informational value than HTML filings). 



248 

is described in the Form N-4 registration statement. For example, the data tagging could allow 

third parties such as financial data aggregators to efficiently compare and otherwise process the 

disclosed information into analyses accessible to investors. 

c. Option to Use a Summary Prospectus 

We are proposing to amend rule 498A to permit RILA issuers, as well as issuers of 

“combination contracts” offering a combination of index-linked options and variable options, to 

use a summary prospectus to satisfy statutory prospectus delivery obligations. Investors would 

continue to have access to the RILA statutory prospectus and other information about the RILA 

contract online, with paper or electronic copies of this information upon request. The current 

summary prospectus rule for variable contracts uses a layered disclosure approach designed to 

provide investors directly with key information relating to the contract’s terms, benefits, and 

risks in a concise and reader-friendly presentation, with more detailed information available 

elsewhere. The proposed amendments to rule 498A would broaden the scope of the rule to 

address RILA contracts.  

As discussed in section II.C above, the proposed amendments to rule 498A would 

involve the use of two distinct types of summary prospectuses for RILA contracts, employing the 

same approach the rule currently uses for variable contracts. An “initial summary prospectus,” 

covering contracts offered to new investors, would include certain key information about the 

contract’s most salient features, benefits, and risks, presented in plain English in a standardized 

order. The rule amendments would also require “updating summary prospectuses” to be provided 

to existing investors in RILA contracts. The updating summary prospectus would include a brief 

description of certain changes to the contract that occurred during the previous year, as well as a 

subset of the information required to appear in the initial summary prospectus. Certain key 



249 

information about the index-linked options that the contract offers as investment options would 

be provided in both the initial summary prospectus and updating summary prospectus.  

The proposed rule would create a choice for insurance companies. They may meet their 

prospectus delivery obligations by providing the statutory prospectus, or they may satisfy these 

obligations by providing a summary prospectus and making statutory prospectuses and other 

required documents available online. Those insurance companies that expect to benefit by 

providing summary prospectuses would choose to rely on the proposed amendments to meet 

their prospectus delivery obligations. Those insurance companies that do not expect to benefit 

from this optional prospectus delivery regime would choose to continue to provide statutory 

prospectuses to investors. 

The presentation proposed for the initial summary prospectus may also reduce the 

investor effort required to compare RILA contracts, to consider different index-linked options 

that a RILA offers, or to compare RILA contracts with each other and with variable annuity 

contracts, when an investor considers a new investment. Information provided in a concise, user-

friendly presentation could allow investors to compare information across contracts and as a 

result, may lead investors to make decisions that better align with their investment goals.453  

 

453  Research suggests that individuals are generally able to make more efficient decisions when they have 
comparative information that allows them to assess relevant trade-offs. See, e.g., Christopher K. Hsee, 
George F. Loewenstein, Sally Blount, Max H. Bazerman (1999). Preference Reversals Between Joint and 
Separate Evaluations of Options: A Review and Theoretical Analysis, Psychological Bulletin, 125(5), 576–
90; see also Jeffrey R. Kling, Sendhil Mullainathan, Eldar Shafir, Lee Vermeulen, Marian V. Wrobel 
(2012). Comparison Friction: Experimental Evidence from Medicare Drug Plans, Quarterly Journal of 
Economics, 127(1), 199–235. In a randomized field experiment, some senior citizens choosing between 
Medicare drug plans were randomly selected to receive a letter with personalized, standardized, 
comparative cost information. Plan switching was 28% in the group that received a letter with personalized, 
standardized, comparative cost information, but only 17% in the comparison group, and the intervention 
caused an average decline in predicted consumer cost of about $100 a year among letter recipients. 



250 

If insurance companies choose to meet their prospectus delivery obligations by delivering 

summary prospectuses to investors, with other documents available online, investors would then 

have a choice as well. Under the layered disclosure framework we are proposing for RILAs, 

investors would receive information in the form of a summary prospectus, with more detailed 

information available online if the investor chooses to access it.454 Thus, investors can continue 

to review the statutory prospectuses by accessing them online, or they may request paper or 

electronic delivery of statutory prospectuses on an ad hoc basis. Alternatively, investors may 

choose only to consult the summary prospectuses. Further, if investors want to rely on some 

combination of summary and statutory prospectuses to receive information about the contract, 

that choice is available to them as well. Given the Commission’s experience administering the 

optional summary prospectus regime for variable annuities, we expect a majority of RILA 

issuers would choose to use summary prospectuses. Thus, we expect that the vast majority of 

investors will have the option to use both summary prospectuses and statutory prospectuses in 

their decision-making, in whatever proportion investors think is best for their preferences. 

Initial Summary Prospectus. Should insurance companies issuing RILAs choose to use 

summary prospectuses, investors may benefit in a number of ways.455 The proposed initial 

summary prospectus for RILAs would be limited to describing only the contract and features 

currently available under the statutory prospectus. This focus could make more salient the 

features and risks of a RILA, thereby facilitating investors’ evaluation of those features and risks.  

 

454  During investor testing, several participants felt they would need information beyond the information 
contained in the KIT to make a decision about a RILA. See OIAD Report at Section 5, Qualitative Testing, 
Results from Round 1.   

455  Some investors may prefer to read statutory prospectuses, and therefore, the advantages associated with 
summary disclosure, as described in this section, may not apply to those investors. The statutory prospectus 
would, under the proposed rule, be available online and in paper or electronic format upon request. 



251 

We are proposing a standardized presentation for RILA initial summary prospectuses to 

require certain disclosure items that would be most relevant to investors to appear at the 

beginning of the initial summary prospectus, followed by supplemental information. An initial 

summary prospectus must contain the information required by the rule, and only that 

information, in the order specified by the rule.456 The information would be required to appear in 

the same order, and under relevant corresponding headings, as the rule specifies. The required 

presentation could also facilitate comparisons of different RILA contracts, as well as 

comparisons between RILA contracts and variable annuities.  

We believe standardized, consistent disclosure of comparable information benefits 

investors by making it easier for investors to evaluate and compare RILA offerings. Also, the 

presentation of information in a standardized, consistent manner could facilitate not only the 

evaluation and comparison among RILA offerings, but also could facilitate the comparison of 

RILAs to other variable annuities. Further, certain investors, while aware of variable annuities, 

simply may not be aware of RILAs as an investment option. Presentation of information in a 

standardized, consistent manner in an initial summary prospectus could increase investor 

awareness of RILAs as an investing option. 

In addition, given the time required to review a statutory prospectus, RILA investors may 

benefit from summary prospectuses because they offer a shorter alternative to statutory 

prospectus disclosure. There is evidence that suggests that consumers benefit from summary 

disclosures.457 Within the specific context of investing, there is evidence from related contexts 

 

456  Proposed rule 498A(b)(5). 
457  There is evidence that the summarization of key information is useful to consumers. See, e.g., Sumit 

Agarwal, Souphala Chomsisengphet, Neale Mahoney, Johannes Stroebel, Regulating Consumer Financial 
Products: Evidence from Credit Cards (NBER Working Paper No. 19484, rev. 2014), available at 
 



252 

that suggests that summary prospectuses allow investors to spend less time and effort to arrive at 

the same portfolio decision as if they had relied on a statutory prospectus.458 This research is 

consistent with the 2012 Financial Literacy Study, which showed that at least certain investors 

favor a layered approach to disclosure with the use, wherever possible, of summary documents 

containing key information about an investment product or service.459 

Also, investors allocate their attention selectively,460 and the sheer volume of disclosure 

in a statutory prospectus may discourage some investors from reading contract statutory 

prospectuses. The observations of a telephone survey conducted on behalf of the Commission 

with respect to mutual fund statutory prospectuses (which are typically shorter than variable 

contract statutory prospectuses, and shorter than RILA statutory prospectuses are expected to be 

under the proposal) are consistent with the view that the volume of disclosure may discourage 

 

https://www.nber.org/papers/w19484. The authors find that a series of requirements in the CARD Act, 
including provisions designed to promote simplified disclosure, has produced decreases in both over-limit 
and late fees, saving US credit card users $20.8 billion annually; see also Robert L. Clark, Jennifer A. Maki 
& Melinda Sandler Morrill, Can Simple Informational Nudges Increase Employee Participation in a 401(k) 
Plan? 80 S. ECON. J. 677 (2014). The authors find that a flyer with simplified information about an 
employer’s 401(k) plan, and about the value of contributions compounding over a career, had a significant 
effect on participation rates. 

458  See John Beshears, James J. Choi, David Laibson & Brigitte C. Madrian, How Does Simplified Disclosure 
Affect Individuals’ Mutual Funds Choices?, in EXPLORATIONS IN THE ECONOMICS OF AGING 75 (David A. 
Wise ed., 2010) (“Beshears Paper”), available at https://scholar.harvard.edu/laibson/publications/how-
does-simplified-disclosure-affect-individuals-mutual-fund-choices. We note, however, that while the 
authors find evidence that investors spend less time making their investment decision when they are able to 
use summary prospectuses, there is no evidence that the quality of their investment decisions is improved. 
In particular, “On the positive side, the Summary Prospectus reduces the amount of time spent on the 
investment decision without adversely affecting portfolio quality. On the negative side, the Summary 
Prospectus does not change, let alone improve, portfolio choices. Hence, simpler disclosure does not appear 
to be a useful channel for making mutual fund investors more sophisticated …” Id. at 13 (manuscript page). 

459  See 2012 Financial Literacy Study.   
460  See George Loewenstein, Cass R. Sunstein & Russell Golman. (2014) Disclosure Psychology Changes 

Everything, 6 ANN. REV. ECON. 391 (2014). 



253 

investors from reading statutory prospectuses.461 That survey observed that many mutual fund 

investors do not read statutory prospectuses because they are long, complicated, and hard to 

understand. Responses to investor surveys in other contexts, also suggest that shareholders may 

be more likely to read more concise shareholder reports.462 

To the extent summary prospectuses increase readership of RILA contract disclosures, 

they could improve the quality and efficiency of portfolio allocations made on the basis of 

disclosed information for those investors who otherwise would not have read the statutory 

prospectus.  

The presentation proposed for the initial summary prospectus may also reduce the 

investor effort required to compare RILA contracts, to consider different index-linked options 

that a RILA offers, or to compare RILA contracts with each other and with variable annuity 

contracts, when an investor considers a new investment. Information provided in a concise, user-

friendly presentation could allow investors to compare information across contracts and as a 

result, may lead investors to make decisions that better align with their investment goals.463 For 

example, the proposed amendments would require insurance companies to distill certain key 

product information into tables, which could facilitate comparison across different products. 

 

461  Prior to the Commission’s 2009 adoption of mutual fund summary prospectus rules, the Commission 
engaged a consultant to conduct focus group interviews and a telephone survey concerning investors’ views 
and opinions about various disclosure documents filed by companies, including mutual funds. During this 
process, investors participating in focus groups were asked questions about a hypothetical Summary 
Prospectus. Investors participating in the telephone survey were asked questions relating to several 
disclosure documents, including mutual fund prospectuses. See Abt SBI, Inc., Final Report: Focus Groups 
on a Summary Mutual Fund Prospectus (May 2008), available at https://www.sec.gov/comments/s7-28-
07/s72807-142.pdf. Although the results from the investor testing reflect stated investor preferences, they 
do not provide us with information with respect to the extent to which RILA investors would actually be 
more likely to read a RILA summary prospectus relative to a statutory prospectus. 

462  Tailored Shareholder Reports Adopting Release. 
463  See supra footnote 453. 



254 

Further, the proposed framework for RILA contract summary and statutory prospectuses 

also includes design elements to facilitate investor use. In particular, the proposed amendments 

include requirements for linking both within the electronic version of a contract statutory 

prospectus and between the electronic versions of the contract statutory prospectus and the 

contract summary prospectus. The linking requirement would permit investors who use the 

electronic versions of contract prospectuses to quickly navigate between related sections within 

the contract statutory prospectus and back and forth between related sections of the contract 

summary prospectus and the contract statutory prospectus. Further, the proposal would also 

require that investors either be able to view the definition of each special term used in an online 

summary prospectus upon command, or to move directly back and forth between each special 

term and the corresponding entry in any glossary or list of definitions that the summary 

prospectus includes. This requirement would facilitate understanding of terms that may be 

confusing or unfamiliar among investors viewing the documents online. 

Updating Summary Prospectus. As under current rule 498A, we are not proposing that 

RILA issuers send an updated initial summary prospectus to investors each year. Instead, any 

RILA issuer that relies on rule 498A would send an updating summary prospectus, which would 

provide a brief description of certain changes with respect to the contract that occurred within the 

prior year.464 The updating summary prospectus would also include certain of the information 

required in the initial summary prospectus that we consider most relevant to investors when 

considering additional investment decisions.465 Further, updating summary prospectuses for 

RILA contracts, like initial summary prospectuses, would include specific disclosure items 

 

464  Proposed rule 498A(c)(1).  
465  See supra footnote 285 and accompanying text. 



255 

appearing in a prescribed order, under relevant corresponding headings.466 An updating summary 

prospectus for a RILA contract would have to contain the information required by the rule, and 

only that information, in the order specified by the rule. 

The proposed updating summary prospectus for RILAs would have many of the same 

benefits for investors associated with the initial summary prospectus discussed above, with 

respect to presenting key information in an easier and less time-consuming manner for investors. 

Specifically, because many terms of the RILA contract do not change from year-to-year, the 

contract statutory prospectus may contain large amounts of disclosure that is duplicative of 

disclosure that the investor has previously received. Those changes that do occur may be 

important to investors, but the disclosure about these changes could be difficult for the investor 

to identify given the volume of prospectus disclosure that investors would otherwise receive, and 

the current lack of a requirement to identify new or changed information. 

Under the proposed amendments, the updating summary prospectus would include a 

concise description of important changes affecting the statutory prospectus disclosure relating to 

certain topics that occurred within the prior year—namely: (1) the availability of investment 

options under the contract, (2) the overview of the contract, (3) the KIT, (4) certain information 

about fees, (5) benefits available under the contract, (6) purchases and contract value, and (7) 

surrenders and withdrawals. These are topics that are most likely to entail contract changes and, 

for the reasons previously noted, are the types of contract changes most likely to be important to 

investors because they affect how investors evaluate RILA contracts and are relevant to investors 

when considering whether to continue in the existing option (if available) or transfer funds to a 

 

466  Proposed rule 498A(c)(6). 



256 

different option. The proposed updating summary prospectus, if used by issuers to satisfy their 

prospectus delivery obligations, would likely reduce the burden on investors and increase their 

understanding of their contract by highlighting certain changes to the contract made during the 

previous year, while foregoing the repetition of most information that had remained unchanged.  

d. Use of Statutory Accounting 

The proposal would permit RILA issuers to provide financial statements on amended 

Form N-4 in the same way that insurance companies currently do on Form N-4.467 As a result of 

this change, the financial statements filed in connection with a RILA registration statement could 

be prepared in SAP to the same extent as currently permitted for insurance companies’ financial 

statements filed on that form. We expect this approach to appropriately recognize the cost 

burdens if we were to require GAAP financial statements in cases where the insurance company 

is not otherwise required to prepare financial information in accordance with GAAP. In addition, 

SAP financial statements, which focus on an issuer’s ability to meet its obligations under its 

insurance contracts, as regulated by State law, appear to provide sufficient material information 

for investors evaluating RILAs. As a result, permitting insurance companies to provide SAP 

financial statements when registering the offering of a RILA to the same extent as they can in 

connection with variable annuities on Form N-4 would be consistent with investor protection. 

Also, investors could benefit to the extent the reduced cost burdens provided by SAP financial 

statements are passed along to investors.  

 

467  Certain Commission letters, or portions thereof, exempt insurance companies from the requirement to 
provide financial statements prepared in accordance with GAAP in connection with the registration of an 
offering of RILAs on Form S-1.  As discussed in Section III.B.1.a, among RILA contracts that are currently 
registered with the Commission, 47 RILAs report SAP financials and 43 RILAs report GAAP financials. 



257 

The proposal also would require RILAs to provide information relating to changes in and 

disagreements with accountants on accounting and financial disclosure as detailed in 17 CFR 

229.304 (“Item 304 of Regulation S-K”). Further, RILAs would be required to provide as an 

exhibit any letter from the insurance company’s former independent accountant regarding its 

concurrence or disagreement with the statements made by the insurance company in the 

registration statement concerning the resignation or dismissal as the insurance company’s 

principal accountant. These items are currently provided by RILAs on Forms S-1 and S-3 and are 

designed to address the practice of “opinion shopping” for an auditor willing to support a 

proposed accounting treatment designed to help a company achieve its reporting objectives even 

though that treatment might frustrate reliable reporting.468 Because the requirements for Form N-

4 filers under the proposal are the same as for Form S-1 and Form S-3 filers currently, we would 

not expect any additional benefits from the requirement to provide information relating to 

changes in and disagreements with accountants on accounting and financial disclosure.    

e. Filing Rules 

Fee Payment Method and Amendments to Form 24F-2. The proposal would require 

RILA issuers to pay registration fees for RILAs using the same method that other filers on Form 

N-4 currently use. Issuers registering the offerings of RILAs on amended Form N-4 would be 

deemed to be registering an indeterminate amount of RILAs upon effectiveness of the 

registration statement. These issuers would then be required to pay registration fees annually 

based on their net sales of these securities, no later than 90 days after the issuer’s fiscal year 

ends, on the form that is used by current Form N-4 filers to pay registration fees (Form 24F-2). 

 

468  See Disclosure Amendments to Regulation S-K, Form 8-K and Schedule 14A Regarding Changes in 
Accountants and Potential Opinion Shopping Situations, Investment Company Act Release No. 16358 
(Apr. 12, 1988) [53 FR 12924 (Apr. 20, 1988)]; see also item 11(i) of Form S-1. 



258 

The proposal would further specify the calculation method for paying RILA registration fees, 

consistent with the fee calculation methodology that applies to current Form N-4 filers. The 

proposal would also indicate when issuers can take credits for RILA redemptions that pre-date 

their use of that form and when expiring annuity contracts are rolled over into a new crediting 

period as well as other minor technical amendments. 

The proposed filing rules would provide benefits to insurance companies. Rather than 

registering a specific amount of securities, insurance companies would register an indefinite 

amount of securities upon the effective date of their registration statement. Registering an 

indefinite amount of securities benefits insurance companies by eliminating the risk that a RILA 

issuer may inadvertently oversell securities with respect to a registration statement on Form N-4. 

The payment of fees on an annual net basis furthermore should lead to a reduction in overall 

filing fees relating to RILAs. To the extent that there are cost savings for issuers, some of those 

savings may potentially be passed on to investors. 

Post-Effective Amendments and Prospectus Supplements. As discussed in section II.E, 

the proposal would require RILA issuers to use the same framework for filing post-effective 

amendments to the registration statement as is currently used by other filers on Form N-4. First, 

the proposal would amend rule 485 under the Securities Act to require RILA issuers to use that 

rule when amending RILA registration statements on Form N-4. Requiring RILA issuers to use 

that rule when amending RILA registration statements on Form N-4 would permit RILA issuers 

to file post-effective amendments that become automatically effective under rule 485(a) after a 

specified period of time after the filing or, in certain enumerated circumstances, immediately 

effective under rule 485(b). Issuers may benefit to the extent automatic effectiveness allows 

issuers to tap favorable windows of opportunity in the RILA market, to structure terms of RILAs 



259 

on a real-time basis to accommodate investor demand, and to determine or change the plan of 

distribution in response to changing market conditions.  

Second, the proposal would require RILA issuers to apply rule 497 under the Securities 

Act when appropriate to file RILA prospectuses and prospectus supplements with the 

Commission. Under the proposed amendments, a RILA issuer would be required to file every 

prospectus relating to a RILA offering that varies in form from a previously filed prospectus 

before it is first used. This approach—rather than requiring filing only if the issuer makes 

substantive changes from or additions to a previously-filed prospectus—may benefit both 

investors and issuers. The requirement that insurance companies file every prospectus that varies 

in form from a previously filed prospectus before it is first used could facilitate investor 

evaluation and comparison by making publicly available the most timely information currently 

available to investors. We would expect this benefit to be minimal, however, because rule 424 

under the Securities Act requires RILA issuers only to file prospectuses that contain substantive 

changes. Prospectuses required to be filed under rule 497 that would not be required to file under 

rule 424, then, would be prospectuses updated with minor, non-substantive changes and likely of 

limited informational benefit to investors.  

As discussed above, certain issuers use a short-form registration statement on Form S-3, 

which requires less information than Form S-1 and allows for significant incorporation by 

reference. Certain issuers also can rely on rule 430B under the Securities Act to omit certain 

information from the “base” prospectus when the registration statement becomes effective and 

later provide that information in a subsequent Exchange Act report (forward) incorporated by 

reference, a prospectus supplement, or a post-effective amendment. Issuers registering annuity 

product offerings on Form N-4, on the other hand, have limited ability to incorporate information 



260 

by reference into their registration statements and cannot forward incorporate information from 

subsequently filed Exchange Act reports. Issuers registering annuity product offerings on Form 

N-4 also cannot rely on rule 430B to omit certain information from the base prospectus. Under 

the proposal, then, RILA investors would have all the information available in one location 

rather than needing to separately access the information on a website or request the incorporated 

materials. As a result, costs to investors for assembling and assimilating necessary information 

could decrease, with a potentially stronger effect for investors that may not have the technical 

capabilities or monetary resources to search efficiently through multiple information sources.  

Issuers may benefit from applying rule 497 as well. The proposed rule would facilitate a 

uniform post-effective amendment and prospectus filing framework for all Form N-4 filers, 

which would provide insurance companies with more consistent filing requirements across 

similar products. This, in turn, could benefit insurance companies by making it easier to execute 

such offerings and may decrease compliance costs.   

f. Materially Misleading Statements in RILA Sales Literature 

The proposal would amend rule 156 to make its provisions applicable to RILA sales 

literature. Rule 156 is an interpretive rule that provides factors to be weighed in considering 

whether a statement involving a material fact is or might be misleading in the specific context of 

investment company sales literature, including literature relating to the sale of variable annuities. 

Proposed amendments to rule 156 would indicate that whether a statement involving a material 

fact is misleading in RILA sales literature would depend on an evaluation of the context in which 

it is made, with the rule providing non-exhaustive factors to guide in this determination.  

For example, rule 156(b)(1)(ii) currently provides that a statement could be misleading 

because of the absence of explanations, qualifications, limitations or other statements necessary 

or appropriate to make such statement not misleading. This provision, where made applicable to261 

RILA sales literature, would generally require an insurance company to consider whether an 

advertisement would be materially misleading if it markets the investment as a growth 

investment, a loss-avoidance vehicle, or a customizable product in the absence of qualifying 

explanations or statements. Similarly, if sales literature advertises a particular feature of the 

product’s bounded return structure that is not available for the life of the product or the full term 

of any surrender charge period, the provision as made applicable to RILA sales literature would 

require consideration of whether the statement is misleading without providing additional 

context as to the issuer’s discretion to make changes. 

Further, rule 156(b)(4) currently provides that representations about fees or expenses 

associated with an investment in a fund could be misleading because of statements or omissions 

made involving a material fact, including situations where portrayals of the fees and expenses 

associated with an investment in the fund omit explanations, qualifications, limitations, or other 

statements necessary or appropriate to make the portrayals not misleading. We are proposing to 

amend this provision also to address representations about the fees or expenses associated with a 

RILA contract. In the context of RILA sales literature, this provision as amended would require 

consideration about whether representations or portrayals either of a RILA’s costs or charges, or 

optional benefits that are subject to a contract adjustment, would require qualifying statements or 

explanations regarding the economic costs to the investor to receive an advertised benefit or 

those generally associated with the RILA. 

Also, rule 156(b)(2)(i) currently states that representations about past or future 

investment performance could be misleading because of statements or omissions made involving 

a material fact. This includes situations where portrayals of past income, gain, or growth of 

assets convey an impression of the net investment results achieved by an actual or hypothetical 



262 

investment which would not be justified under the circumstances, including portrayals that omit 

explanations, qualifications, limitations, or other statements necessary or appropriate to make the 

portrayals not misleading. This provision, where made applicable to RILA sales literature, would 

require consideration of whether illustrations about the operation of a RILA or its features could 

be misleading because, for example, they use assumptions that are not currently offered or 

exceed what could be reasonably anticipated or use “cherry picked” data. 

By reducing the potential for misleading or fraudulent statements in RILA sales 

literature, applying rule 156 to RILAs would provide investors with protections and help ensure 

that investors receive the information necessary to make informed decisions about these 

products. Ensuring that investors receive the information necessary to make informed decisions 

could benefit investors by facilitating investor evaluation of RILAs as well as investor 

comparison of RILAs to other annuity products.  

2. Costs 

The proposal could lead to certain additional costs for insurance companies. These costs 

would likely vary across insurance companies, depending on their existing lines of business. 

Costs may also vary depending on the extent to which insurance companies create prospectuses 

that vary in form from previously filed prospectuses and the frequency of certain events, such as 

changes in accountants and disagreements with accountants on accounting and financial 

disclosure. Generally, the costs would be lower for insurance companies that currently offer 

products that register on Form N-4, for those insurance companies that do not change or remove 

key features of RILAs frequently, and for those insurance companies that do not experience 

changes in, and disagreements with, accountants on accounting and financial disclosure.  

We anticipate that the costs to insurance companies would be comprised of both direct 

compliance costs and indirect costs. Direct costs for insurance companies would consist of 



263 

internal costs (for compliance attorneys and other non-legal staff, such as computer 

programmers, to prepare and review the required disclosure) and external costs (including filing 

fees, outside legal and accounting fees, as well as any costs associated with outsourcing all or a 

portion of the Form N-4 filing responsibilities to a filing agent, software consultant, or other 

third-party service provider). 

The proposal could lead to certain costs for investors as well. Any portion of additional 

costs that is not borne by insurance companies would ultimately be passed on to RILA investors. 

Investors also may bear costs associated with certain proposed changes such as the proposed 

change in filing rules as well as an insurance company’s option to use a summary prospectus.  

a. Direct Costs 

Form N-4. We believe that the direct costs associated with the proposed amendments 

would be most significant for the first Form N-4 registration statement that an insurance 

company would be required to prepare and file because the insurance company would need to 

familiarize itself with the new registration form and may need to configure its systems to 

efficiently gather the required information. In subsequent periods, we anticipate that insurance 

companies would incur significantly lower costs because much of the work involved in the initial 

registration statement preparation and filing is non-recurring and because of efficiencies realized 

from system configuration and reporting automation efforts accounted for in the initial filing 

period. The costs associated with preparing and filing a new registration statement (on Form N-4 

as opposed to Forms S-1/S-3) would be ameliorated to the extent an insurance company 

currently has experience and systems in place to prepare and file registration statements on Form 

N-4 (e.g., the insurance company currently offers variable annuities whose offerings are 



264 

registered on Form N-4). We estimate the aggregate additional annual internal time cost to be 

$16,133,834 and the aggregate annual external cost burden to be $2,914,740.469 

Insurance companies would also incur compliance costs to tag many of the newly 

required Form N-4 disclosures (as well as those prospectus disclosures that Form N-4 currently 

requires to be tagged) in Inline XBRL. Various XBRL and Inline XBRL preparation solutions 

have been developed and used by operating companies and investment companies to fulfill their 

structuring requirements, and some evidence suggests that, for smaller operating companies, 

XBRL compliance costs have decreased over time.470 We estimate the total aggregate additional 

annual internal time cost for XBRL compliance would be $308,560 and the aggregate annual 

external cost burden to be $63,000.471 In addition, 22 of the 23 insurers that issue RILAs also 

offer variable products registered on Forms N-3, N-4, or N-6, all of which are currently 

structured, or otherwise have experience tagging registration statements.472  

As such, to the extent these companies comply with Inline XBRL requirements internally 

rather than outsourcing to an external service provider, they may already be familiar with Inline 

XBRL software and may be able to leverage existing Inline XBRL preparation processes and/or 

 

469  See infra Table 13. 
470  An AICPA survey of 1,032 public operating companies with $75 million or less in market capitalization in 

2018 found an average cost of $5,850 per year, a median cost of $2,500 per year, and a maximum cost of 
$51,500 per year for fully outsourced XBRL creation and filing, representing a 45% decline in average cost 
and a 69% decline in median cost since 2014. See AICPA, XBRL Costs for Small Companies Have 
Declined 45% since 2014 (2018), available at 
https://us.aicpa.org/content/dam/aicpa/interestareas/frc/accountingfinancialreporting/xbrl/downloadabledoc
uments/xbrl-costs-for-small-companies.pdf. Note that this survey was limited to small operating 
companies. Additionally, a NASDAQ survey of 151 listed issuers and other respondents in 2018 found an 
average XBRL compliance cost of $20,000 per quarter, a median XBRL compliance cost of $7,500 per 
quarter, and a maximum XBRL compliance cost of $350,000 per quarter in XBRL costs per quarter. See 
Letter from Nasdaq, Inc. (Mar. 21, 2019); Request for Comment on Earnings Releases and Quarterly 
Reports, Securities Act Release No. 10588 (Dec. 18, 2018) [83 FR 65601 (Dec. 21, 2018)].  

471  See infra Table 16. 
472  Based on analysis of Forms S-1, S-3, and POS AM filed by RILA issuers. 



265 

expertise in complying with the new tagging requirements. This would limit the compliance 

costs arising from the new tagging requirements for these issuers to only those costs related to 

selecting additional Inline XBRL tags for those new disclosures proposed to be tagged, and 

reviewing the tags selected for those disclosures. Accordingly, we do not anticipate that the costs 

associated with Form N-4 tagging would be significant enough to deter insurance companies 

from entering the market for RILAs. As such, we do not expect that the new and modified 

tagging requirements in this proposal would decrease competition in the market for RILAs.473 

Option to Use a Summary Prospectus. Issuers will benefit from the option to use a 

summary prospectus to the extent that providing layered disclosure through a summary 

prospectus regime (including costs of producing and delivering initial summary and updating 

summary prospectuses and of making statutory prospectuses, and other documents available 

online) is less expensive than providing statutory prospectuses to new investors and updated 

statutory prospectuses to existing investors annually. Insurance companies choosing to provide 

summary prospectuses would bear a one-time cost of preparing both the initial summary 

prospectus and the updating summary prospectus, as well as costs associated with preparing 

updated versions the updating summary prospectus in the future on at least an annual basis. We 

estimate the average annual burden to prepare initial and updating summary prospectuses to be 

$5,000 per registration.474 

Insurance companies that choose to provide summary prospectuses are required to make 

statutory prospectuses and other materials available online. We estimate the aggregate cost to 

comply with the proposed website posting requirements of the rule for documents relating to 

 

473  See also infra section III.D. 
474  See Table 11, Rule 498A PRA Estimates.  



266 

RILAs to be $772 per registrant.475 However, some of these costs may have already been 

incurred by issuers of “combination” contracts offering variable options as well as index-linked 

options. 

Insurance companies that rely on rule 498A to use summary prospectuses for variable 

annuities are also required to include inter- and intra-document linking and special terms 

definitions. One linking requirement would allow the reader to move back and forth between a 

table of contents of the contract statutory prospectus or SAI, and the related sections of each 

document. Although prospectuses and SAIs are not required to have individual headings 

corresponding to the items in the registration forms, we assume that the sections of a prospectus 

or SAI would correspond with the item requirements of the forms. We estimate that Form N-4 

filers would require 27 back-and-forth internal links. The other linking requirement would allow 

the reader to move back and forth between each section of the summary prospectus and any 

related section of the contract statutory prospectus and SAI that provides additional detail. This 

back-and-forth movement could occur either directly from the summary prospectus to the 

relevant section of the statutory prospectus or SAI, or indirectly by linking from the summary 

prospectus to a table of contents in the statutory prospectus or SAI. For our analysis, we assume 

direct links as those will tend to be more costly when compared with indirect linking through a 

table of contents.  

An initial summary prospectus for a Form N-4 issuer includes eight sections. The Key 

Information Table has instructions stating that, wherever feasible, a registrant should provide 

cross-references or links to the location in the statutory prospectus where the subject matter is 

 

475  See Table 11, Rule 498A PRA Estimates.  



267 

described in greater detail. There are 12 sections of the Key Information Table. Therefore, we 

estimate that there would be 18 back-and-forth links between initial summary prospectuses and 

statutory prospectuses for a Form N-4 issuer.  

An updating summary prospectus for a Form N-4 issuer includes three sections, one of 

which, the Key Information Table, includes 12 sections. One section is the “Updated Information 

About Your Contract” section. The number of links in this section would depend on the number 

of updates discussed. For example, assuming discussion of four updates, we estimate the number 

of back-and-forth links between a Form N-4 issuer’s updating summary prospectus and statutory 

prospectus to be 16. 

The proposed rule amendments would also require that RILA investors either be able to 

view the definition of each special term used in an online summary prospectus upon command 

(e.g., by “hovering” the computer’s pointer or mouse over the term), or to move directly back-

and-forth between each special term and the corresponding entry in any glossary or list of 

definitions that the summary prospectus includes. We assume that RILA issuers could replicate 

links to a glossary or the computer code required to implement access to definitions by 

“hovering” over a term with little or no burden, but that there would be a burden associated with 

creating the requisite link or code for each special term. Accordingly, we estimate the cost to 

comply with the proposed requirement to include inter- and intra-document linking and special 

terms definitions as described above would include 6 burden hours and a cost of $800 annually, 

per registrant.476 

 

476  See VASP Adopting Release at n.1084. 



268 

Filing the Prospectus. As discussed in section II.E, RILA issuers follow different 

processes to file prospectuses than current Form N-4 filers. For example, a RILA issuer is 

required to file a prospectus only if the issuer makes substantive changes or additions to a 

previously-filed prospectus, whereas current Form N-4 filers are required to file every prospectus 

that varies from any previously-filed prospectus. Accordingly, under the proposed amendments, 

a RILA issuer would be required to file every prospectus relating to a RILA offering that varies 

in form from a previously filed prospectus before it is first used. The proposed requirement could 

increase the number of prospectuses required to be filed by RILAs which could, in turn, increase 

costs for issuers.477 For each additional prospectus required to be filed by RILAs, we estimate an 

addition internal cost burden of $113,659.70 and an external cost burden of $24,000.478    

Materially Misleading Statements in RILA Sales Literature. The proposal would amend 

rule 156 to make its provisions applicable to RILA sales literature. The cost of the proposed 

amendments would include the direct cost of analyzing advertising materials in light of the 

guidance rule 156 provides. This may require review and approval of advertisements beyond 

what occurs currently, particularly because determining whether a statement involving a material 

fact is misleading in RILA sales literature would depend on an evaluation of the context in which 

it is made. We expect some of these costs to be borne in the first year after the rule adoption. 

That is, these costs would be transition costs and not sustained beyond the first year. We estimate 

 

477  The potential increase in cost could be greater for Form S-3 filers than for Form S-1 filers. Form S-3 
requires less information than Form S-1. Also, Form S-1 allows incorporation by reference only on a very 
limited basis. Form S-3 allows for forward incorporation by reference. Form S-3 filers may need to produce 
incrementally more information to file on Form N-4 than Form S-1 filers. Transitioning to Form N-4 could 
be more expensive for Form S-3 filers than for Form S-1 filers, as a result.  

478  See Table 11, Rule 498A PRA Estimates. As discussed in footnote 477, these costs could be greater for 
Form S-3 filers than for Form S-1 filers. Also, we estimate an additional internal time cost of $2,436 for 
each additional prospectus required to be filed by separate account registrants.   



269 

that the transition costs associated with the proposed advertising rule amendments would be 

$5,715.479 Also, ongoing sales literature activity may require internal review and approval of 

advertisements. We estimate that the costs associated with ongoing sales literature activity would 

be $1,905, annually.480 These costs would be borne by issuers and third parties who prepare 

RILA advertisements.  

b. Indirect Costs 

Form N-4. While the prospectuses and other registration statement disclosure required by 

the proposal would likely facilitate investor evaluation and comparison of RILAs, investors 

could experience certain transition costs under the proposal, and some investors may experience 

other ongoing costs. Transition costs would include the costs of the inconvenience to some 

investors of adapting to the new materials and to the changes in the presentation of information. 

Investors would also bear a one-time cost of the inconvenience of adjusting to the changes in the 

disclosures they receive. These costs are likely to be relatively lower for investors with less 

experience investing in RILAs. 

Option to Use a Summary Prospectus. While we expect that, should insurance companies 

opt to use summary prospectuses, the majority of investors would benefit from their disclosures, 

certain investors may incur costs. For example, although research indicates that investors 

generally prefer to receive summary disclosures there may be RILA investors who prefer to rely 

 

479  We estimate an initial burden of 15 hours, per advertisement, to review existing advertising materials at a 
blended cost of $381 ($5,715 = 15 x $381). See Tailored Shareholder Reports for Mutual Funds and 
Exchange-Traded Funds; Fee Information in Investment Company Advertisements adopting release at 
footnote 744.   

480 We estimate an initial burden of 5 hours, per advertisement, to review existing advertising materials at a 
blended cost of $381 ($5,715 = 15 x $381). See Tailored Shareholder Reports for Mutual Funds and 
Exchange-Traded Funds; Fee Information in Investment Company Advertisements adopting release at 
footnote 745.   



270 

on statutory prospectuses when making investment decisions. While RILA statutory 

prospectuses would continue to be available online and in paper or electronic copy upon request, 

access to those statutory prospectuses would require investors to take additional steps, imposing 

some burden. For example, investors choosing to access the statutory prospectus online rather 

than requesting a paper copy would need to manually enter a hyperlink from a paper updating 

summary prospectus or click on a link to a website containing the statutory prospectus. To the 

extent that internet access and use among RILA investors is not universal, those investors 

without home internet access might experience a reduction in their ability to quickly and easily 

access statutory prospectus information.481 Even for those investors with home internet access, 

there may be some resistance to taking the additional step of accessing the statutory prospectus 

online.  

Use of Statutory Accounting Principles. The proposal would permit RILA issuers to 

provide financial statements on amended Form N-4 in the same way that insurance companies 

currently do on Form N-4. One consequence of this change would be that the financial 

statements filed in connection with a RILA registration statement could be prepared in SAP to 

the same extent as currently permitted for insurance companies’ financial statements filed on that 

form. The proposed rule would create a choice for certain insurance companies. They may 

prepare their registration statements in SAP, or they may prepare their registration statements in 

 

481  According to the most recent U.S. census data, approximately 85% of U.S. households had some form of 
broadband internet access in their home in 2018, and 92% had a computer (e.g., desktop, laptop, tablet or 
smartphone). See Michael Martin, Computer and Internet Usage in the United States: 2018, U.S. CENSUS 
BUREAU (Apr. 21, 2021), available at https://www.census.gov/library/publications/2021/acs/acs-49.html; 
see also Pew Research Center, Internet/Broadband Fact Sheet (Apr. 7, 2021), available at 
https://www.pewresearch.org/internet/fact-sheet/internet-broadband/ (“Today, 93% of American adults use 
the internet.” and “Today, roughly three-quarters of American adults have broadband internet service at 
home.”); see also Ani Petrosyan, Internet Usage in the United States - Statistics & Facts, STATISTA (Aug. 
31, 2023), available at https://www.statista.com/topics/2237/internet-usage-in-the-united-
states/#topicOverview (“Today, over 90 percent of Americans have access to the internet”).  

https://www.census.gov/library/publications/2021/acs/acs-49.html
https://www.pewresearch.org/internet/fact-sheet/internet-broadband/
https://www.statista.com/topics/2237/internet-usage-in-the-united-states/#topicOverview
https://www.statista.com/topics/2237/internet-usage-in-the-united-states/#topicOverview


271 

GAAP. Those insurance companies that expect to benefit from preparing their registration 

statements in SAP (e.g., through reduced costs) would choose SAP. Those insurance companies 

that do not expect to benefit from the option to prepare their registration statements in SAP 

would continue to prepare their registration statements in GAAP. Because the proposed rule 

would, for certain issuers, create the option, but not the obligation, to prepare their registration 

statements in SAP, we do not believe this provision of the proposed rule would create additional 

costs. 

Filing and Prospectus Delivery Rules. As discussed in section II.E, when a RILA issuer 

seeks to amend a RILA registration statement on Form S-1, the issuer must file a post-effective 

amendment that is typically declared effective by Commission staff acting pursuant to delegated 

authority on such date as the Commission may determine. To the extent that investors previously 

benefited from the Commission staff’s review of these filings before they become effective, 

allowing filings of RILA offerings to become automatically effective may eliminate such 

reviews and, as a result, possibly increase the costs to investors. However, issuers would still 

face liability under the Federal securities laws for registration statement disclosures (e.g., 

sections 12 and 17 of the Securities Act and section 10(b) and rule 10b-5 under the Exchange 

Act), which may ameliorate the potential costs associated with reduced staff review. Moreover, 

rule 485 only permits updates to become immediately effective in limited, enumerated 

circumstances, in order to provide an opportunity for staff review for all other changes. 

As discussed in section II.E.3, we understand that RILA issuers typically deliver 

prospectuses to accompany or precede other communications, such as annuity applications.  It is 

possible that providing layered disclosure through a summary contract prospectus regime 

(including costs of delivering initial summary and updating summary prospectuses and making 



272 

statutory prospectuses and other documents available online) could result in reduced costs for 

issuers.482  

Materially Misleading Statements in RILA Sales Literature. Issuers and third parties 

involved in preparing or disseminating investment company advertisements may incur costs to 

comply with the proposed advertising rule amendments. While reducing the potential for 

misleading or fraudulent statements in RILA sales literature would provide investors with 

protections and help ensure that investors receive the information necessary to make informed 

decisions about these products, investors could bear the costs of these amendments through 

increased expenses that funds would incur to implement the proposal. Alternatively, if the cost of 

compliance with these proposed amendments were significant, some RILAs might reduce 

advertising to lower the extra costs of compliance. If this were to occur, investors who would 

otherwise rely on advertisements to make investment decisions about RILAs or compare RILAs 

with other investment products might have less complete information for these purposes.  

D. Effects on Efficiency, Competition, and Capital Formation 

Efficiency. To investors, the costs of purchasing a RILA are more than just the dollar cost 

of the contract and include the value of an individual’s time spent evaluating the contract and its 

various aspects. Further, for those investors who do not gain a full understanding of the contract, 

there could be a cost stemming from a potential mismatch between an investor’s goals and the 

 

482  See VASP Adopting Release. In the VASP Adopting Release we estimate that printing and mailing 
expenses are $0.18 less for initial and updating summary prospectuses than for statutory prospectuses.  
Because we understand RILA prospectuses to not be as long as variable annuity prospectuses, we would 
expect savings among RILA issuers to be less than the VASP Adopting Release savings, but we do not 
have a basis for believing savings for RILA issuers will be of an order of magnitude less than the VASP 
Adopting Release savings.  We therefore believe savings for RILA issuers will be between approximately 
$.02 and $.18.  We estimate the internal cost time of online posting of contract documents to be $772.  See 
infra, Table 11.  



273 

purchased contract. Depending on the size of an individual’s potential purchase, certain of these 

additional costs could be considerable in comparison to the monetary costs associated with 

contract purchase and could discourage investors from considering RILAs even in circumstances 

where investment in a RILA would be beneficial. 

For their part, insurance companies only supply RILAs to the extent they expect the 

benefits derived from providing the contracts to be greater than the costs of supplying the 

contract. For issuers, costs include not only those costs associated with producing and servicing 

RILAs, but also those costs associated with meeting various statutory and regulatory obligations. 

These costs borne by both insurance companies and individuals are examples of market 

“frictions.” Market frictions have the effect of reducing the benefits from (i.e., the efficiency of) 

contracting between market participants.483 Rules that reduce costs for investors, issuers, or both, 

reduce market frictions and potentially enhance the benefits from contracting between market 

participants. By facilitating investor evaluation and comparison of RILAs as well as facilitating 

the comparison of RILAs to other annuity contracts, the proposed rule could reduce frictions for 

investors. Requiring insurance companies to use a single registration form and filing process for 

all RILAs as well as all variable annuity separate accounts that are structured as unit investment 

trusts, as well as allowing RILA issuers to provide financial statements on amended Form N-4 in 

the same way that insurance companies currently do on Form N-4, may also reduce certain 

compliance burdens for insurance companies. In addition, requiring RILA issuers to tag certain 

key information in Inline XBRL would enable investors, third-party information providers, 

Commission staff, and other data users to capture and analyze that information more quickly and 

 

483  If market frictions are sufficiently large, market frictions could eliminate exchange altogether. 



274 

efficiently than is possible when the same information is provided solely in a static, text-based 

format. 

These increases in efficiency could lead investors to save more appropriately to meet 

their retirement goals. For example, for existing RILA investors the proposal may increase the 

likelihood that investors choose to invest more or less money in RILAs in a manner that is 

consistent with their overall financial needs and objectives—a level that may be higher or lower 

than current levels. Similarly, the proposal may lead existing investors to choose to allocate their 

money into different investment options that the RILA offers, or different RILAs (or other 

insurance products like variable annuities) that best meet their needs. The proposal also may help 

promote investment in RILAs by investors who currently do not invest in RILAs, to the extent 

such investments are appropriate for them. Finally, access to clearer information about the 

contract provisions may reduce the chances that an investor makes mid-crediting period 

withdrawals or transfers or surrenders a RILA when the costs of doing so does not justify the 

benefits. 

Competition. If the proposed rule increases efficiency of exchange in the RILA market, 

then we may observe a change in investment in RILAs. For example, if there are individuals who 

currently do not invest in RILAs (or invest less than they would have) because the costs other 

than the price of the contract are too high (including the effort to gain sufficient understanding of 

the product) or they are not aware of RILAs as an investment, then to the extent the proposed 

rule lowers those costs or makes investor more aware of RILAs, we would expect to observe 

more investors entering the RILA market. Conversely, there may be RILA investors who, 

because of the burden, choose not to read statutory prospectuses. To the extent those investors 

are more likely to read summary prospectuses, those investors may decide, as a result, that other 



275 

investments or products are better suited to their investment goals. This could result in fewer 

investments in RILAs. If there are insurance companies who limit their participation in the RILA 

market as a result of the requirement to register RILA offerings on Form S-1 or Form S-3 or 

because of the costs of current prospectus delivery requirements, those insurance companies may 

increase participation in the RILA market. To the extent that competition in a market is related to 

the size of the market, the net effect of these potential changes in investor demand for, and issuer 

supply of, RILAs could affect competition in the RILA market. 

The proposed rule could also affect competition by requiring that information about 

RILAs be presented in a concise, user-friendly way, which could allow investors to compare 

information across products. Requiring RILA issuers to tag certain key information in Inline 

XBRL could further facilitate comparisons of information across registrants by making it easier 

for investors (directly or through third-party data aggregators) to extract and aggregate 

information through automated means for analysis and comparison, which could increase 

competition among RILA issuers for investor capital. For example, the proposed rule requires 

issuers to distill certain key product information into tables. The presentation of this information 

in a table facilitates evaluation among different RILAs as well as comparison to variable 

annuities. Greater comparison among different RILAs as well as comparison to variable 

annuities could lead to greater competition. Furthermore, by reducing the costs associated with 

aggregating data across RILAs, the proposed Inline XBRL requirement could reduce barriers to 

entry for third-party data aggregators and induce competition among firms that supply 

information about RILAs to investors, including other third-party aggregators and sales agents. 

The effect on competition between insurance companies could be limited, however, to the 

extent RILA investors rely on an agent to help them select their RILA contract and the 



276 

investment options under the contract and do not have access to broad comparisons across 

different RILAs (or among different investment options that the RILA offers) at the time of 

sale.484 Agents generally only provide their customers with a subset of all RILAs available in the 

general marketplace. Thus, while the product information in summary prospectuses would 

facilitate comparison across products offered by the agent, the effect would likely be limited to 

the agent’s set of products rather than to the broader market. 

Capital Formation. As discussed in connection with the potential effects of the proposed 

rule on competition, if the proposed rule increases the efficiency of exchange in the RILA 

market, then we may observe a change in investment in RILAs. As discussed in section III.B.3, 

unlike variable annuities that involve a direct investment of premiums into one or more mutual 

funds, which in turn invest in underlying securities, RILA premiums are not directly invested 

into the assets of the indexes that are associated with the index-linked options offered under the 

contract, but are typically invested into fixed-income securities such as corporate bonds. To the 

extent that an increase or decrease in the demand for RILAs is not driven by investors 

substituting either away from, or into, variable annuities or other investment vehicles as an 

alternative, we would not expect changing demand for RILAs to have any effect on the 

underlying securities. An increase or decrease in the demand for RILAs could, however, increase 

or decrease the demand for fixed-income securities such as corporate bonds.  To the extent the 

proposed rule would cause investors to either substitute away from, or into, variable annuities or 

another investment that entail investment in underlying funds (which, in turn, invest in a 

 

484  We do not have data on the extent to which investors rely on agents when purchasing RILAs. In 2019, 
$95.5 billion of total variable annuity sales of $98.3 billion (97%) were through a distribution channel 
involving an agent. If investors rely on agents when purchasing RILAs to the same extent they do when 
purchasing variable annuities, then the vast majority of RILA investors rely on agents when purchasing 
RILAs.   



277 

portfolio of securities), there could be an effect on capital formation. If investors substitute away 

from variable annuities or other investment vehicles into RILAs, there could be a reduction in the 

demand for the underlying securities and, by extension, a reduction in capital formation. If 

investors substitute away from RILAs and into variable annuities or other investment vehicles, 

there could be an increase in the demand for the underlying securities. To the extent issuers 

invest RILA proceeds into fixed-income securities such as corporate bonds, there could be an 

increase in the demand for those securities.   

The proposed Inline XBRL requirements could increase the efficiency of capital 

formation to the extent that making disclosures available in a structured format reduces some of 

the information barriers that make it costly for RILA issuers to find appropriate sources of new 

investors. Smaller issuers in particular may benefit more from enhanced exposure to investors. If 

tagging certain disclosures in a structured format increases the availability, or reduces the cost, of 

collecting and analyzing key information about RILAs, smaller RILA issuers may benefit from 

improved coverage by third-party information providers and data aggregators. 

E. Reasonable Alternatives 

1. Creating an Entirely New Registration Form for RILAs  

The proposed rule would require the registration of RILA offerings on Form N-4. Most 

variable annuities use Form N-4, which has disclosure requirements tailored to these investments 

that provide investors with key information about a variable annuity’s terms, benefits, and risks 

in a concise and reader-friendly presentation. Currently, insurance companies register RILA 

offerings on Forms S-1 or S-3, which allow registering general debt or equity offerings. Forms 

S-1 and S-3 require issuers to disclose not only information about the offering itself, but also 

extensive information about the registrant issuing the securities. In addition, registrants must 

include financial statements prepared in accordance with GAAP, unless an exemption has been 



278 

granted pursuant to 17 CFR 210.3-13 that permit insurance companies to substitute SAP 

financials in lieu of GAAP financials. Form N-4, on the other hand, allows insurance companies 

to file financial statements prepared in accordance with SAP if they do not otherwise prepare 

GAAP financial statements. As an alternative, we could have required insurance companies to 

register RILA offerings on an entirely new form. 

Form N-4 was designed for investment companies, and RILA issuers are not investment 

companies. A new form specifically tailored to RILAs could be more beneficial than working to 

fit them into an existing framework that was designed with a different structure in mind. 

A completely new registration form for RILA offerings could negatively affect investors’ 

ability to compare different RILAs with variable annuities that register on Form N-4 (including 

“combination” contracts that offer index-linked options as well as variable options). 

Furthermore, given that we are proposing to amend Form N-4 to address those aspects specific to 

RILAs, but many of the current form requirements are relevant to the registration of RILA 

offerings, a completely new and separate form for RILAs would not offer much (if any) benefit 

to investors in terms of new information compared to the proposed amendments to Form N-4. 

Since most variable annuity issuers already use Form N-4 to register their securities, and many 

RILA contracts are offered as “combination” contracts, the amended Form N-4 would efficiently 

provide investors with product-specific information about these combination contracts. As a 

result, investors would be able to compare annuity products, and the investment options that 

these products offer, with less time and effort. To the extent that investors use less time and 

effort to compare annuity products and their underlying investment options, investors may be 

more likely to make decisions that align better with their investment goals. 



279 

We preliminarily believe that requiring RILA offerings to be registered on Form N-4 

rather than on an entirely new form would also be more efficient for insurance companies since 

they would generally follow the same procedures they already use for the registration of variable 

annuities. Using Form N-4 to register variable annuities and RILA offerings would also be less 

costly for insurance companies than using Form N-4 for variable annuities and a completely new 

form for RILAs since registrants are already familiar with Form N-4. It also would be less costly 

because, if RILA offerings had to be registered on a form other than Form N-4, combination 

contracts offering variable options and index-linked options would have to use two separate 

registration forms. 

Commission staff would also benefit from using Form N-4 for RILAs because the 

disclosure requirements for variable annuities and RILAs would be located in one form only, and 

registration statements for these products would be subject to the same filing and review 

processes. This would reduce the use of resources by Commission staff needed to review the 

registration statements of RILAs and variable annuities. 

2. Alternatives to Specific Form N-4 Amendments 

The Commission is proposing amendments to Form N-4 so that insurance companies can 

register RILA offerings using that form. While the substance of many of the requirements in 

Form N-4 would not change from the current version of the form, we are proposing to update 

some items to include disclosures specifically tailored to RILAs. In certain limited 

circumstances, we have changed the disclosure requirements provided on the form for all filers, 

including those registering variable annuities.  

As an alternative, we could have proposed more or less tailoring the form for RILAs. A 

larger number of amendments tailored to RILAs than the number we propose would be more 

costly for insurance companies registering RILA offerings because insurance companies that 



280 

offer combination contracts (or that otherwise register variable annuities on Form N-4) would 

have to make more changes to their disclosure. For example, we could have required insurance 

companies to provide a diagram in the KIT to illustrate surrender charges and contract 

adjustments during different time periods of the contract, or illustrations showing how caps, 

floors, and/or buffers could affect an investor’s returns across different market scenarios.  

Also, we could require insurance companies to provide information related to the 

economic tradeoffs associated with index-linked options. For example, we could require the 

insurance company to compare a hypothetical investment in the index-linked option to the value, 

or cost, of a combination of (i) derivatives that would provide the index-linked option’s 

investment exposure; (ii) a fixed-income component; and (iii) the standard insurance features 

offered with the index-linked option, similar to the analysis in the Moenig Paper and the analysis 

conducted by the staff in section III.B.3.485 In such a comparison, we could either require that the 

insurance company should use the hypothetical investment discounted by the rate of interest the 

insurance company is crediting, or would credit, on fixed annuities with a term equal to the 

duration of the crediting periods of the index-linked option, or we could require the insurance 

company to use the value of a risk-free zero-coupon bond with a time to maturity equal to the 

crediting period of the index-linked option, consistent with our analysis in section III.B.3.486 We 

could also consider requiring additional disclosure related to the setting of early withdrawal 

charges or penalties and their impact on such a comparison of hypothetical investments. For 

example, we could require the calculation of a disclosure similar to the analysis in the Moenig 

Paper and the analysis conducted by the staff in section III.B.3 to explicitly include the impact of 

 

485  See supra section II.B.3.b. 
486  Id.281 

early withdrawal charges or penalties on the liquidity of the investment. We could also require 

more prominent placement of these features on marketing or other materials, or we could require 

a comparison of these features to potential benefits of the RILA to clarify for investors possible 

trade-offs. 

Conversely, a smaller number of amendments tailored to RILAs than the number we 

propose would be less costly for insurance companies. Since insurance companies already use 

Form N-4 to register variable annuities, and most RILA issuers offer variable annuities registered 

on Form N-4 (including, in many cases, combination contracts), we preliminarily believe that the 

costs of complying with the disclosure requirements of the amended form would not be 

substantial. 

The amendments to Form N-4 that we propose would promote investor understanding of 

RILA contracts by presenting information in a clear and concise manner. Proposing a larger 

number of amendments tailored to RILAs may add too much, or less relevant, information, 

which may overwhelm investors who may not have the time or capacity to process all the 

information.487 Proposing only a subset of amendments tailored to RILAs, as compared with the 

proposed approach, could result in less investor understanding relative to the understanding 

resulting from the proposed amendments. 

3. Require the Use of Form N-4 for Registered MVAs 

As discussed above, while we are not proposing to require insurance companies to 

register offerings of registered MVAs on Form N-4, one alternative would have been requiring 

 

487  See, e.g., Julie R. Agnew and Lisa R. Szykman (2005). Asset Allocation and Information Overload: The 
Influence of Information Display, Asset Choice, and Investor Experience, Journal of Behavioral 
Finance, 6(2), 57-70, and Alejandro Bernales, Marcela Valenzuela and Ilknur Zer (2023). Effects of 
Information Overload on Financial Markets: How Much Is Too Much? International Finance Discussion 
Papers 1372, Washington: Board of Governors of the Federal Reserve System. 



282 

insurance companies to register the offering of registered MVAs on Form N-4.488 These 

offerings are currently registered on Forms S-1 or S-3 but differ from RILAs only with respect to 

the manner in which interest is calculated and credited.489 As a result, many of the benefits and 

costs identified above regarding RILAs would also be true in applying the same registration and 

disclosure framework to offerings of registered MVAs, including potentially a change to the 

filing fee process to file on Form 24f-2 and requiring the issuers to follow rule 156. For example, 

as with RILAs, expanding the scope of Form N-4 to include registered MVAs would benefit 

investors by making it easier for them to compare registered MVAs, and also compare registered 

MVAs with other annuity product offerings registered using Form N-4.490 In particular, because 

both RILAs and registered MVAs include contract adjustments, the inclusion of specified 

disclosures about contract adjustments would benefit investors since they would be able to better 

evaluate the costs of purchasing and owning annuity contracts, including registered MVAs. 

Requiring the registration of registered MVAs on Form N-4 also would entail efficiency benefits 

to insurance companies that offer combination contracts, for example ones that include both 

variable annuities registered on Form N-4 and registered MVAs, as the use of the same 

registration form for all of these products may reduce these companies’ compliance burdens.  

Conversely, including registered MVAs on Form N-4 would also entail similar costs to 

those outlined above for the proposed registration and disclosure approach for RILAs. These 

would include direct costs to the insurance company, for example filing fees, as well as outside 

 

488  See supra section II.H. 
489  Based on internal estimates, there are 45 registered MVAs from 15 different insurance companies. 27 of 

these registered MVAs are in combination contracts whereas 18 are standalone. 27 of these registered 
MVAs use Form S-1 and 18 use Form S-3. Lastly, 26 of these registered MVAs use GAAP financials and 
19 use SAP. 

490  See supra section III.C.1. 



283 

legal and account fees. Direct costs also would include costs associated with filing the first Form 

N-4 registration statement in connection with the registration of a registered MVA offering, 

where the insurance company would be required to familiarize itself with the new registration 

form and may need to configure its systems to efficiently gather the required information. 

Further, investors would bear certain indirect costs, such as the cost of adapting to new materials 

and the changes in the presentation of information. 

Ultimately, we determined not to propose to require insurance companies to register 

offerings of registered MVAs on Form N-4 at this time, but we request comment on this 

reasonable alternative. 

4. Limiting Scope of Structured Data Requirements  

The proposed rule would require many of the newly added disclosures on Form N-4 to be 

tagged in Inline XBRL, and also would require RILA issuers to tag those prospectus disclosures 

that Form N-4 currently requires to be tagged. Alternatively, the Commission could have limited 

the tagging requirement to only those disclosures being added to Items of Form N-4 that are 

already tagged in Inline XBRL.491 Under this alternative, disclosures relating to: the overview of 

the contract; the description of the Insurance company, registered separate account, and 

investment options; charges; purchases and contract value; purchase of securities being offered; 

disagreements with and changes to accountants; information about contracts with index-linked 

options and fixed options subject to a contract adjustment; and fee representations and 

undertakings would not be tagged. 

 

491  See supra footnote 451. 



284 

Limiting the scope of tagging requirements in this manner would result in reduced 

compliance burdens for insurance companies, which would be required to apply fewer tags to 

their disclosures on Form N-4 filings. However, the alternative would also remove the 

informational benefits associated with making those disclosures available in a machine-readable 

manner. Furthermore, because Form N-4 filers already have Inline XBRL tagging obligations 

with respect to certain of the form’s disclosure requirements, the burden reductions resulting 

from such an alternative would be limited. 

F. Request for Comment 

Throughout this release, we have discussed the anticipated benefits and costs of the 

proposed rule and its potential effect on efficiency, competition, and capital formation. While we 

do not have comprehensive information on all aspects of RILA registration and reporting, we are 

using the data currently available in considering the effects of the proposed rule. We request and 

encourage any interested person to submit comments regarding the proposed rule, our analysis of 

the potential effects of the rules and other matters that may have an effect on the proposed rules. 

We request that commenters identify sources of data and information with respect to annuity 

contracts in general, but also with respect to RILAs in particular, as well as provide data and 

information to assist us in analyzing the economic consequences of the proposed rules. We are 

also interested in comments on the qualitative benefits and costs we have identified and any 

benefits and costs we may not have discussed. We urge commenters to be as specific as possible. 

Comments on the following questions are of particular interest. 

153. What additional qualitative or quantitative information should be considered as 

part of the baseline for the economic analysis of these amendments? 

154. Are the benefits and costs of proposed amendments accurately characterized? If 

not, why not? Should any of the costs or benefits be modified? What, if any, other 



285 

costs or benefits should be taken into account? If possible, please offer ways of 

estimating these benefits and costs. What additional considerations can be used to 

estimate the benefits and costs of the proposed amendments? 

155. To the extent commenters believe any specific additional data sources would help 

better quantify the benefits and costs of the proposal, we request that commenters 

provide this data. In particular, the following data could be particular informative: 

historical information about current limits on index gains associated with the 

index-linked options offered under a RILA, quantitative data about contract 

adjustments incurred by investors who make withdrawals from an index-linked 

option or from a RILA contract before the end of a specified period, and/or data 

regarding the frequency with which RILA contracts are annuitized.   

156. Are the effects on competition, efficiency, and capital formation arising from the 

proposal accurately characterized? If not, why not? 

157. Are there any other reasonable alternatives to the proposed new rule that should 

be considered? Are there any additional benefits or costs that should be associated 

with the reasonable alternatives considered? 

158. We indicate that insurance companies benefit from the sale of RILAs in at least 

three ways. First, insurance companies can benefit from a favorable imbalance 

between the downside protections that a RILA contract offers, and the upside caps 

the contract offers. Second, insurance companies invest RILA proceeds into fixed-

income securities such as corporate bonds, thereby earning a “credit risk 

premium.” Finally, insurance companies can benefit when a RILA offers index-

linked options whose index for measuring performance is a price-based index that 



286 

does not account for dividend payments. Are we correct in our characterization of 

how insurance companies benefit from the sale of RILAs? In what other ways, if 

any, do insurance companies benefit from the sale of RILAs?  

159. We characterize RILAs as combining features of fixed-index annuities and 

variable annuities – limiting or reducing downside risk in return for an investor 

accepting capped upside performance. In exchange for giving up the complete 

protection of principal offered by fixed annuities, a RILA investor is afforded 

greater upside potential than that provided by fixed annuities, though typically less 

than the potential upside of a variable annuity. Is our characterization of RILAs, 

compared to other annuity products, correct? If not, how do RILAs compare to 

other annuity products? 

160. In Section III.B.3, we analyze the imbalance between the downside protections 

that a RILA contract offers, and the upside limits the contract offers. Does our 

analysis reflect a risk-neutral valuation for a RILA with a cap and buffer or floor? 

What alternative considerations should we include in calculating such a valuation? 

Do the methodological assumptions (such as generating prices through the linear 

interpolation of implied volatilities) create significant bias or other problems for 

the analysis? How do RILAs set surrender charges or other early withdrawal 

charges or penalties, and should these charges or penalties be considered when 

performing this calculation since they reduce the liquidity of the investment? 

Should we require additional disclosure related to early withdrawal charges, fees, 

or penalties? For example, should we require more prominent placement of these 

features on marketing or other materials, or should we require a comparison of 



287 

these features to potential benefits of the RILA to clarify for investors possible 

trade-offs? Are there other data sources (e.g., pricing vendors) that should be 

considered for these calculations? Are there certain time periods or types of 

contracts that we should consider when doing these or similar calculations? What 

considerations should be used in assessing whether the cost derived in our analysis 

is large or small? Also, are other measures related to the economic content of 

downside protections and upside limits that would be beneficial for investors?  

161. We indicate that for shorter crediting periods and for common indexes such as the 

S&P 500, issuers are able to use exchange traded derivative securities to closely 

approximate the issuer’s liabilities from a RILA contract at the end of each 

crediting period. Do issuers use exchange derivative securities to approximate the 

issuer’s liabilities from a RILA contract? If not, how do issuers use the proceeds 

from RILA sales? 

162. Under the proposed rule, to what extent would insurance companies choose to 

meet their disclosure obligation by providing investors with summary prospectuses 

while making statutory and other documents available on a website? As discussed 

above, we expect the vast majority of investors will have the option to use both 

summary prospectuses and statutory prospectuses in their decision-making, in 

whatever proportion investors think is best for their preferences. To what extent 

would investors in RILA contracts whose issuers elect to rely on rule 498A request 

to receive statutory prospectuses in paper or electronically, or seek access to 

statutory prospectuses online?  



288 

163. Would any positive or negative effect of the proposed rule on investors be 

disproportionately greater for certain investors than for others? If so, which 

investors would be disproportionately affected, to what extent, and how would 

such effects manifest? What, if any, additional measures could help mitigate any 

such disproportionate effects? Please provide supportive data to the extent 

available. 

164. To what extent might reduced burdens (e.g., using SAP accounting rather than 

GAAP accounting) borne by issuers be passed on to existing investors? Under 

what circumstances, and in what form, would insurance companies pass benefits 

through to existing investors? 

165. To what extent would the proposed rule affect the ability of investors to 

understand the investment risks of RILAs and to efficiently allocate capital? 

Would investors be more likely to allocate additional capital to RILAs? What 

would be the effect on issuer competition for investor capital? 

166. To what extent would investors realize benefits from Inline XBRL tagging 

requirements for certain newly added disclosures on Form N-4, as opposed to 

tagging requirements for only those disclosures within currently tagged Form N-4 

Items? How would this approach affect costs for insurance companies? Would 

there be any cost saving? 

167. To what extent would an increase or decrease in the demand for RILAs be driven 

by investors substituting either away from, or into, variable annuities or other 

investment vehicles? We assume that if investors do substitute away from, or into, 

variable annuities or other investment vehicles into RILAs, that the effect on 



289 

capital formation would be small. Is our assumption correct?  If not, why would 

the effect on capital formation be larger than what we assumed? 

IV. PAPERWORK REDUCTION ACT 

We are proposing amendments to several rules and forms that would modify the 

registration, offering, and communications processes for RILAs under the Securities Act. We are 

also proposing amendments to Form N-4 and related rules that would apply to all issuers of that 

form.492 The proposed amendments, if adopted, would implement the requirements relating to 

RILAs in the RILA Act.493 The proposed amendments would have an impact on the current 

collections of information burdens under the Paperwork Reduction Act of 1995 (“PRA”) of the 

following rules and forms: Rule 498A, Form N-4, Investment Company Interactive Data, and 

Form 24F-2. The titles for the existing collections of information are: (1) “Rule 498A Summary 

Prospectus for Variable Annuity and Variable Life Insurance Contracts” (OMB Control No. 

3235-0765), which we would retitle to “Rule 498A Summary Prospectus for Variable and Index-

Linked Annuity and Variable Life Insurance Contracts;” (2) “Form N-4, Registration Statement 

of Separate Accounts Organized as Unit Investment Trust” (OMB Control No. 3235-0318), 

which we would retitle to “Form N-4, Registration Statement of Separate Accounts Organized as 

Unit Investment Trust or of Index-Linked Annuity Contracts;” (3) “Annual Notice of Securities 

 

492  We are proposing amendments rules 485 and 497 of Regulation C (OMB Control No. 3235-0074), which 
describes the procedures to be followed in preparing and filing registration statements with the 
Commission, and rule 405 of Regulation S-T (OMB Control No. 3235-0424), which specifies the 
requirements that govern the electronic submission of documents. The proposed amendments would require 
RILA issuers to tag specified information in registration statements filed on Form N-4 or post-effective 
amendments thereto, as well as in forms of prospectuses filed pursuant to rule 497(c) or 497(e) under the 
Securities Act that include information that varies from the registration statement using Inline XBRL These 
burdens are included in our estimates for the Investment Company Interactive Data collection of 
information discussed in section IV.D below. 

493  See Pub. L. 117-328; 136 Stat. 4459 (Dec. 29, 2022). 



290 

Sold Pursuant to Rule 24f-2.” (OMB Control No. 3235–0456), which we would retitle to 

“Annual Notice of Securities Sold Pursuant to 17 CFR 270.24f-2 or 230.456(e);” and (4) 

“Investment Company Interactive Data” (OMB Control No. 3235-0642). 

The Commission is submitting these collections of information to OMB for review and 

approval in accordance with 44 U.S.C. 3507(d) and 5 CFR 1320.11. The hours and costs 

associated with preparing and filing the forms constitute reporting and cost burdens imposed by 

each collection of information. An agency may not conduct or sponsor, and a person is not 

required to respond to, a collection of information unless it displays a currently valid OMB 

control number. We discuss below the collection of information burdens associated with 

proposed amendments to rule 498A and Investment Company Interactive Data, as well as Forms 

N-4 and 24F-2, which are filed with the Commission and are not kept confidential. A description 

of the proposed amendments, including the need for the information and its proposed use, as well 

as a description of the likely respondents, can be found in Section II above, and a discussion of 

the economic effects of the proposed amendments can be found in Section III above. 

A. Rule 498A 

We are proposing to amend rule 498A to permit RILA issuers, as well as issuers of 

“combination contracts” offering a combination of index-linked options and variable options, to 

use a summary prospectus to satisfy statutory prospectus delivery obligations. Consistent with 

current rule 498A, the proposed use of summary prospectuses for RILAs would be voluntary, but 

the rule’s requirements would be mandatory for issuers that elect to send or give a summary 

prospectus in reliance upon proposed rule 498A. We are also proposing to make certain 

amendments to Form N-4 that would affect the variable annuity summary prospectuses currently 

provided to investors. The proposed amendments to rule 498A are part of a layered disclosure 

approach that is designed to provide investors with a summary prospectus to help them make 



291 

informed investment decisions regarding RILAs, as discussed in more detail above. These 

amendments would result in a change in our estimate of the burdens associated with this 

collection of information, specifically to account for these additional requirements for issuers 

that use rule 498A currently and to add RILAs to the estimates. 

The respondents to these collections of information would be RILA issuers and registered 

variable annuity separate accounts. The information provided under rule 498A will not be kept 

confidential. 

In our most recent Paperwork Reduction Act submission for Rule 498A, we estimated for 

rule 498A a total aggregate annual hour burden of 14,688 hours, and a total aggregate annual 

external cost burden of $11,559,420.494 We estimate that 90 RILAs would be registered using 

Form N-4 if the proposal was adopted and that that there are 419 registrants on current Form N-4 

that would be impacted by the proposed amendments.495 The summary prospectus is voluntary, 

so the percentage of RILA issuers that will choose to utilize it is uncertain. Given this 

uncertainty, we have assumed that insurance companies will choose to use a summary prospectus 

for 90% of all RILAs, which is the same as our current estimate for variable annuity separate 

accounts. The table below summarizes our PRA initial and ongoing annual burden estimates 

associated with the proposed amendments to rule 498A. 

Table 11: Rule 498A PRA Estimates 

 Internal initial 
burden hours 

Internal annual 
burden hours  Wage rate2 Internal time 

costs 
Annual external 
cost burden 

PROPOSED ESTIMATES  

Separate Account Registrants 

 

494  On Nov. 13, 2020, the Office of Management and Budget approved this collection of information estimate 
for rule 498A.  

495  The RILA estimate is based on a review of RILA registration statements filed with the Commission as of 
May 2023 and the current Form N-4 registrants estimate is based on Form N-CEN reports through Apr. 15, 
2023.  



292 

Proposed Amendments 91 61  $425 (compliance attorney) $2,550 - 

Number of registrants3  x 419   x 419 - 

Total annual burden  2,514   $1,068,450 - 

Use of summary prospectus  x 90%   x 90% - 

Total new annual burden for Reliance 
on Rule 498A  2,262.60   $961,605 - 

RILA Registrants 

Preparation and filing of Initial Summary 
Prospectus/Updating Summary 

Prospectus 
40 24.674  $313 (blended rate)5 $7,709.38 $5,0008 

Online Posting of Contract Documents 2 2.676  $289 (webmaster) $771.63 - 

Total burden per registrant - 27.34  - 8,481.01 $5,000 

Number of registrants7 - x 90  - x 90 x 90 

Total annual burden - 2,460.60  - $763,290.90 $405,000 

Use of summary prospectus  x 90%   x 90% x 90% 

Total new annual burden for Reliance 
on Rule 498A  2,214.54   $686,961.81 $364,500 

ESTIMATES FOR PRINTING AND MAILING BY RILA REGISTRANTS9 

Initial Summary Prospectus      $120,000 

Updating Summary Prospectus      $1,048,000 

Total annual burden      $1,168,000 

Use of summary prospectus      x 90% 

Total new annual burden for Reliance 
on Rule 498A      $1,051,200 

Total Burdens 

 Responses Internal Hour 
Estimate 

  Internal Hour 
Cost Estimate 

External Cost 
Estimate 

Current aggregate annual burden 
estimates 676 14,688   $3,900,193 $11,559,420 

Aggregate proposed additional annual 
burden estimates +8310 +4,477.14   +1,648,566.81 +$1,415,700 

Revised aggregate annual burden 
estimates 

=759 =19,165.14   =5,548,759.81 =$12,975,120 

Notes:   

1. Burden estimates also include the burden associated with the proposed amendments for separate account registrants that use a notice document as part 
of the modernized alternative disclosure framework in connection with discontinued variable annuity contracts. See VASP Adopting Release at section II.E. 
Internal annual burden hours represents initial burden estimates annualized over a three-year period plus three hours of on-going annual burden hours.  

2. The Commission’s estimates of the relevant wage rates are based on salary information for the securities industry compiled by the Securities Industry and 
Financial Markets Association’s Office Salaries in the Securities Industry 2013. The estimated wage figures are modified by Commission staff to account for 
an 1,800-hour work-year and multiplied by 5.35 to account for bonuses, firm size, employee benefits, overhead, and adjusted to account for the effects of 
inflation. See Securities Industry and Financial Markets Association, Report on Management & Professional Earnings in the Securities Industry 2013 (as 
adjusted to account for inflation, the “SIFMA Wage Report”). 

3. Estimate is based on a review of N-CEN reports through Apr. 15, 2023. In its most recently approved PRA submission, the Commission estimated that 426 
registrants on Form N-4 would be subject to the information collection burden under current rule 498A. For the estimated burden of the proposed 
amendments to rule 498A, we have taken into account updated data regarding the number of registrants on Form N-4.  

4. Represents initial burden estimates annualized over a three-year period plus 11 hours of ongoing annual burden hours. 

5. Represents a blended wage rate of a compliance attorney ($425 per hour) and an intermediate accountant ($200 per hour). $313 is based on the 
following calculation: ($425 + $200)/2 = $313 rounded to the nearest whole dollar. 

6 Represents initial burden estimates annualized over a three-year period plus two hours of ongoing annual burden hours. 

7. This estimate is based on the number of RILAs, as estimated through review of RILA registration statements filed with the Commission as of May 2023. 

8. We estimate that each insurance company that chooses to rely on rule 498A with regards to a RILA will incur a one-time collective external cost burden of 
$10,000 per registration statement to prepare both a new initial summary prospectus and a new updating summary prospectus for offerings on Form N-4. We 



293 

also estimate an on-going collective burden of $2,500 per registration statement during each subsequent year to prepare updates to these materials. The 
three-year average cost of these estimates is $5,000.  

9. Costs associated with printing and mailing for separate account registrants are already accounted for in the currently approved burdens for rule 498A. 
Estimates for RILA issuers printing and mailing costs are based on the currently approved burdens for printing and mailing costs under rule 498A.  

10. The estimated number of new responses is based on the total of the number of RILA responses under the proposed amendments (90 responses) and the 
difference between the number of responses for registered separate accounts under the current aggregate annual burden estimate (426 responses) and the 
proposed additional annual burden estimates (419 responses). (90 RILA responses subtracted by 7 registered separate account responses).  

 

B. Form N-4 

Under the proposed amendments, RILA issuers would register offerings on Form N-4, as 

amended to address the features and risks of RILAs. We are also proposing other amendments to 

Form N-4 that would apply to all issuers that use that form. For example, we are proposing to 

switch the order of the Key Information Table and Overview of the Contract items, require 

issuers to present information in the KIT in a Q&A format, and to require more specific principal 

risk disclosures. These amendments would result in a change in our estimate of the burdens 

associated with this collection of information, specifically to account for these additional 

requirements for issuers that use Form N-4 currently and to add RILAs to the estimates. 

Form N-4 generally imposes two types of reporting burdens on issuers that use the form: 

(1) the burden of preparing and filing the initial registration statement; and (2) the burden of 

preparing and filing post-effective amendments to a previously effective registration statement. 

In our most recent Paperwork Reduction Act submission for Form N-4, we estimated for Form 

N-4 a total aggregate annual hour burden of 292,487 hours, and a total aggregate annual external 

cost burden of $33,348,866.496 Compliance with the disclosure requirements of Form N-4 is 

mandatory, and the responses to the disclosure requirements will not be kept confidential. The 

respondents to these collections of information would be RILA issuers and registered variable 

annuity separate accounts. The purpose of the information collection requirements on Form N-4 

 

496  On Oct. 26, 2021, the Office of Management and Budget approved without change this burden estimate.  



294 

are to meet the filing and disclosure requirements of the Securities Act and Investment Company 

Act, as applicable, and to provide investors with information necessary to evaluate an investment 

in an offering of securities registered on the form. 

We estimate that 90 RILA respondents and 419 separate account registrants would be 

subject to collection of information requirements under the proposed amendments to Form N-

4.497. The table below summarizes our PRA initial and ongoing annual burden estimates 

associated with the proposed amendments to Form N-4. 

Table 12: Form N-4 PRA Estimates For Initial Filings 

 Internal initial 
burden hours 

Internal annual 
burden hours  Wage rate2 Internal time 

costs 
Annual external 
cost burden 

PROPOSED ESTIMATES3  

Separate Account Registrants 

Proposed amendments 12 141  

$406 
(blended rate for compliance 

attorney and senior 
programmer)3 

$5,684 - 

Estimated number of annual 
responses4  x 42   x 42 - 

Total new annual burden  588   $238,728 - 

RILA Issuers 

Proposed amendments to Form N-4 300 390.895  

$406 
(blended rate for compliance 

attorney and senior 
programmer)3 

$158,701.34 

$40,0008 

Website availability requirement6 - 0.5  $286 (webmaster) $143 - 

Estimated number of annual 
responses7  x 20   x 20 x 20 

Total new annual burden  7,827.80   $3,176,886.80 $800,000 

Total Burdens 

 Responses Internal Hour 
Estimate 

  Internal Hour 
Cost Estimate 

External Cost 
Estimate 

Current aggregate annual burden 
estimates 

30 8,427   $2,494,716 $754,740 

Aggregate proposed additional annual 
burden estimates +329 +8,416.80   +$3,416,614.80 +$800,000 

Revised aggregate annual burden 
estimates =62 =16,843.80   =$5,911,330.80 =$1,554,740 

 

497  For RILA registrants, this estimate is based on a review of RILA registration statements filed with the 
Commission as of May 2023. For separate account registrants, this amount is based on Form N-CEN 
reports through Apr. 15, 2023. 



295 

Notes:  

1. This estimate includes the initial burden estimates annualized over a three-year period, plus 10 hours of ongoing annual burden hours. 

2. The Commission’s estimates of the relevant wage rates are based on the SIFMA Wage Report. The estimated wage figures are modified by Commission 
staff to account for an 1,800-hour work-year and multiplied by 5.35 to account for bonuses, firm size, employee benefits, overhead, and adjusted to account 
for the effects of inflation.  

3. The $406 wage rate reflects current estimates of the blended hourly rate for an in-house compliance attorney ($425) and a senior programmer ($386). 
$406 is based on the following calculation: ($425 + $386)/2 = $406 rounded to the nearest whole dollar. 

4. The estimate of the annual number of registration statements filed on Form N-4 is based on the average annual number of filings received by the 
Commission over the past three years (Jan. 1, 2020 to Dec. 31, 2022). In its most recently approved PRA submission, the Commission estimated that 
separate accounts will make approximately 30 initial registration statement filings per year. For the estimated burden of the proposed amendments to Form 
N-4, we have taken into account updated data regarding the number of initial filings on Form N-4. 

5. The proposed estimate includes the initial burden estimates annualized over a three-year period, plus 290.89 hours of ongoing annual burden hours. The 
ongoing annual burden is estimated to be equal to the currently approved ongoing annual burden for initial filings on Form N-4 plus 10 hours of ongoing 
annual burden hours.  

6. The proposed amendments would require RILA issuers to separately to include information about current contract limits on gains on their websites. See 
Item 17 of proposed Form N-4. 

7. This estimate is based on a review of Morningstar data regarding the number of new RILA product launches that occurred over the prior three calendar 
years (2020 – 2022), rounded to the nearest ten. Current RILA registration statements would make their first filing on proposed Form N-4 as a post-effective 
amendment. See supra footnote 202 and accompanying text. 

8. We estimate that the external cost to prepare and file an initial registration statement on Form N-4 is $40,000 per filing. 

9. The estimated number of new responses is based on the total of the number of RILA responses under the proposed amendments (20 responses) and the 
difference between the number of responses for registered separate accounts under the current aggregate annual burden estimate (30 responses) and the 
proposed additional annual burden estimates (42 responses). (20 RILA responses plus 12 registered separate account responses). 

Table 13: Form N-4 PRA Estimates For Post-Effective Amendment Filings 

 Internal initial 
burden hours 

Internal annual 
burden hours  Wage rate2 Internal time 

costs 
Annual external 
cost burden 

PROPOSED ESTIMATES3  

Separate Account Registrants 

Proposed amendments 12 61  

$406 
(blended rate for compliance 

attorney and senior 
programmer)3 

$2,436 

- 

Estimated number of annual 
responses4  x1,016   x1,016 - 

Total new annual burden  6,096   $2,474,976 - 

RILA Issuers 

Proposed amendments to Form N-4 210 279.955  

$406 
(blended rate for compliance 

attorney and senior 
programmer)3 

$113,659.70 $24,0008 

Website availability requirement6 - 0.5  $286 (webmaster) $143 - 

Estimated number of annual 
responses7  x90   x90 x90 

Total new annual burden  25,240.50   10,242,243 $2,160,000 

Total Burdens 

 Responses Internal Hour 
Estimate 

  Internal Hour 
Cost Estimate 

External Cost 
Estimate 

Current aggregate annual burden 
estimates 1,366 +284,060   $84,100,454 +$32,594,126 

Aggregate proposed additional annual 
burden estimates 

-2609 +31,336.50  + +$12,717,219 +$2,160,000 

Revised aggregate annual burden 
estimates =1,106 =315,369.50   =96,817,673 =$34,754,126 



296 

Notes:  

1. This estimate includes the initial burden estimates annualized over a three-year period, plus two hours of on-going annual burden hours. 

2. The Commission’s estimates of the relevant wage rates are based on the SIFMA Wage Report. The estimated wage figures are modified by Commission 
staff to account for an 1,800-hour work-year and multiplied by 5.35 to account for bonuses, firm size, employee benefits, overhead, and adjusted to account 
for the effects of inflation.  

3. The $406 wage rate reflects current estimates of the blended hourly rate for an in-house compliance attorney ($425) and a senior programmer ($386). 
$406 is based on the following calculation: ($425 + $386)/2 = $406 rounded to the nearest whole dollar. 

4. The estimate of the annual number of post-effective amendments to registration statements on Form N-4 is based on the average annual number of filings 
received by the Commission over the past three years (Jan. 1, 2020 to Dec. 31, 2022). In its most recently approved PRA submission, the Commission 
estimated that separate accounts will make approximately 1,366 post-effective amendment filings per year on Form N-4. For the estimated burden of the 
proposed amendments to Form N-4, we have taken into account updated data regarding the number of post-effective amendment filings on Form N-4.. 

5. The proposed estimate includes the initial burden estimates annualized over a three-year period, plus 207.95 hours of ongoing annual burden hours. The 
ongoing annual burden is estimated to be equal to the currently approved ongoing annual burden for initial filings on Form N-4 plus an addition 2 hours of 
ongoing annual burden hours. 

6. The proposed amendments would require RILA issuers to separately to include information about current contract limits on gains on their websites. See 
Item 17 of proposed Form N-4. 

7. This estimate is based on a review of RILA registration statements filed with the Commission as of May 2023. 

8. We estimate that the external cost to prepare and file a post-effective registration statement on Form N-4 is approximately $24,000 per filing. 

9. The estimated number of new responses is based on the total of the number of RILA responses under the proposed amendments (90 responses) and the 
difference between the number of responses for registered separate accounts under the current aggregate annual burden estimate (1,366 responses) and 
the proposed additional annual burden estimates (1,016 responses). (90 RILA responses subtracted by 350 registered separate account responses). 

Table 14: Total Burden Estimates For Form N-4 

Notes:  

 
1. This estimate includes the initial burden estimates annualized over a three-year period. 

C. Form 24F-2 

Under the proposed amendments, insurance companies would be required to pay 

applicable securities registration fees relating to RILAs in arrears on Form 24F-2. Consistent 

with the other elements of this proposal, these proposed amendments are designed to require 

insurance companies to use the same framework to pay securities registration fees for RILAs that 

they do for variable annuities. Form 24F-2 is the annual notice of securities sold by certain funds 

that accompanies the payment of registration fees with respect to the securities sold during the 

 Responses Internal annual burden 
hours1 

 Internal time costs  Annual 
external cost burden 

 TOTAL BURDEN ESTIMATES INCLUDING AMENDMENTS 

Current aggregate annual burden 
estimates 

1,366 292,487 $86,595,170 $33,348,866 

Aggregate proposed additional 
annual burden estimates 

-228 +39,753.30+ +$16,133,833.80 +$2,914,740 

Revised aggregate annual burden 
hours 

=1,168 =332,240.30 =$102,729,004 =$36,263,606 



297 

fiscal year, net of securities redeemed or repurchased during the year. Compliance with Form 

24F-2 is mandatory. Responses to this form are not kept confidential. 

In our most recent Paperwork Reduction Act submission for Form 24F-2, we estimated 

for Form 24F-2 a total aggregate annual hour burden of 27,176 hours, and a total aggregate 

annual external cost burden of $0.498 The likely respondents to the proposed amendments would 

include RILA issuers and current Form 24F-2 filers, which open-end investment companies, unit 

investment trusts, registered closed-end investment companies that make periodic repurchase 

offers under 17 CFR 270.23c-3, and face-amount certificate companies. We estimate that 90 

RILA respondents would be subject to these proposed amendments and would file one Form 

24F-2 filing each per year.499 The table below summarizes our PRA initial and ongoing annual 

burden estimates associated with the proposed amendments to Form 24F-2. 

Table 15: Form 24F-2 PRA Estimates 

 Internal initial 
burden hours 

Internal annual 
burden hours  Wage rate2 Internal time 

costs 
Annual external 

cost burden 

PROPOSED ESTIMATES 

Clerical work to file Form 24f-2 3 31  $82 (compliance clerk) $246 $0 

Submission in a structured data format 3 31  $316 (programmer) $948 $0 

Total annual burden per response  6  - $1,194  

Number of annual responses3  x 90  - x 90 X 90 

Total new annual burden  540  - $107,460 $0 

TOTAL ESTIMATED BURDENS INCLUDING AMENDMENTS 

 Responses Internal annual 
burden hours 

  Internal time 
costs 

Annual external 
cost burden 

Current aggregate annual burden 6,794 27,176  - $4,633,508 $0 

Aggregate proposed additional annual 
burden estimates +90 +540   +$107,460 +$0 

Revised aggregate burden estimates =6,884 =27,716  - =$4,140,968 =$0 

Notes:  

 

498  On May 14, 2021, the Office of Management and Budget approved this burden estimate.  
499  This estimate is based on a review of RILA registration statements filed with the Commission as of May 

2023. We do not believe that the proposed amendments to Form 24F-2 will affect the estimated burdens 
associated with current Form 24F-2 filers. We have not amended the currently approved burdens for 
current Form 24F-2 filers with more recent data for the purposes of this PRA estimate.  



298 

1. The proposed estimate includes the initial burden estimates annualized over a three-year period, plus 2 hours of ongoing annual burden hours. 

2. The Commission’s estimates of the relevant wage rates are based on the SIFMA Wage Report. The estimated wage figures are modified by Commission 
staff to account for an 1,800-hour work-year and multiplied by 5.35 to account for bonuses, firm size, employee benefits, overhead, and adjusted to account 
for the effects of inflation. 

3. This estimate is based on a review of RILA registration statements filed with the Commission as of May 2023. 

D. Investment Company Interactive Data 

The Investment Company Interactive Data collection of information references current 

requirements for certain registered investment companies and BDCs to submit to the 

Commission in Inline XBRL certain information provided in response to specified form and rule 

requirements included in their registration statements and Exchange Act reports. We are 

proposing amendments to Form N-4, as well as rule 405 of Regulation S-T, that would require 

certain new structured data reporting requirements for RILA issuers.500 The proposed 

amendments would require RILA issuers to tag specified information in registration statements 

filed on Form N-4 or post-effective amendments thereto, as well as in forms of prospectuses filed 

pursuant to rule 497(c) or 497(e) under the Securities Act that include information that varies 

from the registration statement using Inline XBRL.501 The purpose of the information collection 

is to make information regarding RILAs easier for investors to analyze and to help automate 

regulatory filings and business information processing, and to improve consistency across all 

types of investment products offered on Form N-4 with respect to the accessibility of information 

they provide to the market. 

 

500  The Investment Company Interactive Data collection of information do not impose any separate burden 
aside from that described in our discussion of the burden estimates for this collection of information. 

501  See supra section II.B.9.  



299 

Insurance companies that use Form N-4 to register variable annuities are currently 

required to tag certain registration statement disclosure items using Inline XBRL.502 For the 

insurance companies that would now be registering RILAs on Form N-4, our proposed data 

tagging requirements would represent new burdens. Nevertheless, RILA issuers generally do 

have prior experience submitting filings to the Commission in Inline XBRL. The vast majority of 

insurance companies that currently register RILAs on Forms S-1 and S-3 also separately file 

Form N-4 to register variable annuities and variable life insurance products or currently tag their 

RILA registration statements and are thus familiar with the current Form N-4 tagging 

requirements.503 In addition, insurance companies that register RILAs on Forms S-1 and S-3 that 

file GAAP financial statements must tag them using Inline XBRL.504 Given this prior 

experience, we do not expect the proposed tagging requirements to be as burdensome to many 

RILA issuers as it would be for issuers that would be going through the Inline XBRL tagging 

and submission process for the first time. 

In our most recent Paperwork Reduction Act submission for the Investment Company 

Interactive Data collection of information, we estimated a total annual hour burden of 323,724 

hours, and a total annual external cost burden of $16,041,450.505 Compliance with the interactive 

data requirements is mandatory, and the responses will not be confidential. 

 

502  See General Instruction C.3(h) of current Form N-4. As discussed above, some of the proposed items would 
also require certain variable annuity issuers to provide a few additional disclosures, which though relatively 
minor, would also have to tagged. 

503  Based on analysis of Forms S-1, S-3, and POS AM filed by RILA issuers, 22 of the 23 insurance 
companies that issue RILAs also offer variable products registered on Forms N-3, N-4, or N-6, all of which 
are currently structured, or otherwise have experience tagging registration statements. 

504  See Inline XBRL Filing of Tagged Data, Securities Act Release No. 10514 (June 28, 2018) [83 FR 40846 
(Aug. 16, 2018)]. 

505  This estimate is based on the last time the PRA renewal for the Investment Company Interactive Data 
information collection was approved in 2023. See ICR Reference No. 202212-3235-007, available at 
https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=202212-3235-007.  



300 

The table below summarizes our PRA estimates for the burdens associated with the 

proposed tagging requirements that would apply to RILAs that file with the Commission on 

Form N-4. 

Table 16: Investment Company Interactive Data 
 Internal 

initial 
burden 
hours 

Internal annual 
burden hours1  Wage rate2 

Internal time 
costs 

Annual external 
cost burden 

PROPOSED BURDENS 

Proposed disclosures for 
current N-4 filers3 

1 hour 1 hour4  

$406 
(blended rate for 

compliance attorney and 
senior programmer) 

$406 $505 

Number of current N-4 
filers6 

 × 400   × 400 ×400 

Total new burden 
estimates for current N-4 

filers 
 400 hours   $162,400 $20,000 

Proposed Form N-4 
disclosures for RILAs7 

9 hours 4 hours8  

$406 
(blended rate for 

compliance attorney and 
senior programmer) 

$1,624 $7009 

Number of RILAs10  × 90   × 90 x 90 

Total new burden 
estimates for RILAs 

 360 hours   $146,160 $63,000 

Total new aggregate 
annual burden 

  760 hours11   $308,56012 $63,00013 

TOTAL PROPOSED ESTIMATED BURDENS INCLUDING AMENDMENTS 

 Responses 
Internal Hour 

Estimate 
  Internal Hour 

Cost Estimate 
External Cost 

Estimate 

Current aggregate annual 
burden estimates 

14,702 
 

323,724 hours 
   

  
 

$27,066,240 
 

$16,041,450 

Proposed additional 
annual burdens   +90 + 760 hours     + $308,560    + $63,000 

Revised aggregate annual 
burden estimates 

14,792 324,484 hours    $27,374,800 $16,124,450 

 
Notes: 
 
1. Includes initial burden estimates annualized over a 3-year period.  
 
2. The PRA estimates assume that the types of professionals that will be involved in complying with the new interactive data requirements. 
The Commission’s estimates of the relevant wage rates are based on the SIFMA Wage Report. The $406 wage rate reflects current 
estimates of the blended hourly rate for an in-house compliance attorney ($425) and a senior programmer ($386). $406 is based on the 
following calculation: ($425 + $386)/2 = $406. This estimate represents the average burden for a filer on Form N-4 that is currently 
subject to interactive data requirements.  
 
3. Estimated incremental burden for a variable annuity Form N-4 filer that is subject to the form’s current interactive data requirements. 
 
4. Includes initial burden estimates annualized over a three-year period, plus 0.67 hour of ongoing annual burden hours. The estimate of 1 
hour is based on the following calculation: ((1 initial hour /3) + 0.67 hour of additional ongoing burden hours) = 1 hour.301 

 
5. Estimated incremental external cost for Form N-4 variable annuity registrants that already submit certain information using Inline XBRL. 
 
6. Based on Form N-CEN filing data for 2022, we estimate that 400 variable annuity registrants file on Form N-4. 
 
7. Estimated average burden for a RILA that files on Form N-4 that is currently subject to interactive data requirements on other 
Commission forms. 
 
8. Includes initial burden estimates annualized over a three-year period, plus 1 hour of ongoing annual burdens. The estimate of 4 hours is 
based on the following calculation: ((9 initial hours /3) + 1 hour of additional ongoing burden hours) = 4 hours. 
 
9. We estimate an incremental external cost for RILAs that would be newly filing on Form N-4 of $700 to reflect one-time compliance and 
initial set-up costs. Because RILAs are currently subject to Inline XBRL tagging requirements on other forms, we do not estimate any 
burdens related to one time-costs associated with becoming familiar with structured data requirements (e.g., the acquisition of new 
software or the services of consultants). 
 

10. Estimated number of RILAs that currently file on Forms S-1 and S-3. 
 
 
11. 760 hours = (400 variable annuity registrants x 1 hour = 400) + (90 RILAs x 4 hours = 360). 
 
12. $308,560 internal time cost = (400 variable annuity registrants x $406 = $162,400) + (90 RILAs x $1,624 = $146,160).  
 
13. $63,000 annual external cost = (400 variable annuity registrants x $50 = $20,000) + (90 RILAs x $700 = $63,000).  
  

E. Request for Comment 

We request comment on whether our estimates are reasonable. Pursuant to 44 U.S.C. 

3506(c)(2)(B), the Commission solicits comments to: (1) evaluate whether the proposed 

collection of information is necessary for the proper performance of the functions of the 

Commission, including whether the information will have practical utility; (2) evaluate the 

accuracy of the Commission’s estimate of the burden of the proposed collection of information; 

(3) determine whether there are ways to enhance the quality, utility, and clarity of the 

information to be collected; and (4) determine whether there are ways to minimize the burden of 

the collection of information on those who are to respond, including through the use of 

automated collection techniques or other forms of information technology. Persons wishing to 

submit comments on the collection of information requirements of the proposed amendments 

should direct them to the OMB Desk Officer for the Securities and Exchange Commission, 

[email protected], and should send a copy to Vanessa 

Countryman, Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, 

DC 20549-1090, with reference to File No. S7-16-23. OMB is required to make a decision 



302 

concerning the collections of information between 30 and 60 days after publication of this 

release; therefore a comment to OMB is best assured of having its full effect if OMB receives it 

within 30 days after publication of this release. Requests for materials submitted to OMB by the 

Commission with regard to these collections of information should be in writing, refer to File 

No. S7-16-23, and be submitted to the Securities and Exchange Commission, Office of FOIA 

Services, 100 F Street NE, Washington, DC 20549-2736. 

V. REGULATORY FLEXIBILITY CERTIFICATION 

Section 3(a) of the Regulatory Flexibility Act of 1980 (“Regulatory Flexibility Act”)506 

requires the Commission, when issuing a rulemaking proposal, to prepare and make available for 

public comment an initial regulatory flexibility analysis that describes the impact of the proposed 

rule and form amendments on small entities unless we certify that the rule and form 

amendments, if adopted, would not have a significant economic impact on a substantial number 

of small entities.507 Pursuant to 5 U.S.C. 605(b), we hereby certify that the proposed 

amendments to Forms N-4 and 24F-2, rules 313 and 405 of Regulation S-T, and rules 156, 172, 

405, 415, 424, 456, 457, 485, 497, and 498A under the Securities Act, would not, if adopted, 

have a significant economic impact on a substantial number of small entities.  

We are proposing amendments to Form N-4 pursuant to the authority set forth in the 

Securities Act, particularly sections 6, 7, 8, 10, 19, and 28 thereof [15 U.S.C. 77f, 77g, 77h, 77j, 

77s, and 77z-3], the Exchange Act, particularly sections 3, 4, 10, 12, 13, 14, 15, 17, 23, 35A, and 

36 thereof [15 U.S.C. 78c, 78d, 78j, 78l, 78m, 78n, 78o, 78q, 78w, 78ll, and 78mm]; the 

Investment Company Act, particularly sections 8, 30, and 38 thereof [15 U.S.C. 80a-8, 80a-29, 

 

506  5 U.S.C. 603(a). 
507  5 U.S.C. 605(b). 



303 

and 80a-37], and the RILA Act, particularly section 101 thereof [Pub. L. No. 117-328, div. AA, 

title I, 136 Stat. 4459 (2022)]. Form-N-4 is the registration form currently used by most variable 

annuity separate accounts. These proposed amendments would implement the requirements 

relating to RILAs contained in the RILA Act by allowing Form N-4 to also be used for the 

registration of RILAs. 

The proposed amendments would add to Form N-4 new disclosure requirements that 

specifically address the features and risks of RILAs. Specifically, the proposal would amend the 

contents of Form N-4, including the form’s general instructions, requirements for front and back 

cover pages, the key information table, principal disclosures regarding RILA investment options, 

and contract adjustment and fee disclosures. These amendments would apply only to insurance 

companies registering RILAs. We are also proposing applying the form’s existing disclosure 

requirements to RILAs where appropriate. For example, we are proposing to permit insurance 

companies to provide financial statements on amended Form N-4 regarding RILAs in the same 

way that that they do under the current Form N-4 for variable annuities, including permitting the 

use of SAP to the same extent as variable annuities. 

In addition to adding RILAs to Form N-4, we are proposing amendments to the form that 

would be applicable to all issuers, which are designed to improve disclosures based upon our 

experience in administering the form and feedback received in investor testing. For example, we 

are proposing to switch the order of the key information table and overview of the contract items 

in the prospectus to require more specific principal risk disclosures. All Form N-4 filers would 

be subject to these proposed amendments.  

To facilitate to the inclusion of RILAs on Form N-4, we are proposing amending Form 

24F-2, rules 313 and 405 of Regulation S-T, and rules 156, 172, 405, 415, 424, 456, 457, 485, 



304 

497, and 498A, pursuant to authority set forth in the Securities Act, particularly sections 6, 7, 8, 

10, and 19(a), and 28 thereof [15 U.S.C. 77e, 77f, 77g, 77h, 77j, and 77s, and 77z-3(a)], the 

Exchange Act, particularly sections 3, 4, 10, 12, 13, 14, 15, 17, 23, 35A, and 36 thereof [15 

U.S.C. 78c, 78d, 78j, 78l, 78m, 78n, 78o, 78q, 78w, 78ll, and 78mm]; the Investment Company 

Act, particularly sections 8, 30, and 38 thereof [15 U.S.C. 80a-8, 80a-29, and 80a-37], and the 

RILA Act, particularly section 101 thereof [Pub. L. No. 117-328, div. AA, title I, 136 Stat. 4459 

(2022)]. For example, the proposed amendment to rule 498A would permit RILA issuers to use a 

summary prospectus to satisfy statutory prospectus delivery obligations, and the proposed 

amendments to rules 485 and 497 would make those rules applicable to RILA issuers when 

amending RILA registration statements on Form N-4 or when filing prospectuses and prospectus 

supplements with the Commission.508 The proposed amendments to Form 24F-2, Rule 313 of 

Reg S-T, and rules 456 and 457 would require insurance companies to pay securities registration 

fees relating to RILA offerings according to the same method used for variable annuities. 

Because we propose subjecting RILA offerings to an investor communication framework similar 

to the framework applicable to variable annuity offerings, the proposed amendments to rule 172 

would exclude RILA offerings from that rule’s provisions. The proposed amendment of rule 405 

of Reg S-T would require inline XBRL tagging of RILA-specific disclosures, while the proposed 

amendment of rule 405 would add a new defined term for RILAs to facilitate their registration on 

Form N-4 and to simplify references to RILAs in our proposed rule amendments. The proposed 

amendments to rule 156 would require RILA issuers to comply with the rule’s guidance as to 

when sales literature is materially misleading under the Federal securities laws.  

 

508  Relatedly, we propose amending rule 424 to specify that RILA issuers must use rule 497 rather than rule 
424 when filing prospectuses and prospectus supplements, and making similar amendments to rule 415 to 
exempt RILA offerings from its provisions, consistent with the framework applied to existing N-4 issuers.  



305 

For purposes of the Securities Act and the Regulatory Flexibility Act, generally, an 

issuer, other than an investment company, will be considered a small entity if it has net assets of 

$5 million or less as of the end of its most recent fiscal year, and the issuer’s offering does not 

exceed $5 million.509 RILA issuers are not investment companies and based on a review of 

EDGAR filings of existing RILA issuers, we do not expect any RILA issuers will be treated as 

small entities. The analysis is different for existing N-4 filers (i.e., variable annuity issuers), as 

the insurance company separate accounts registering variable annuities are deemed to be 

investment companies. Generally, for purposes of the Investment Company Act and the 

Regulatory Flexibility Act, an investment company is a small entity if, together with other 

investment companies in the same group of related investment companies, it has net assets of 

$50 million or less as of the end of its most recent fiscal year.510 Because State law generally 

treats separate account assets as the property of the sponsoring insurance company, rule 0-10 

aggregates each separate account’s assets with the assets of the sponsoring insurance company, 

together with assets held in other sponsored separate accounts.511 As a result, the Commission 

expects few, if any, separate account to be treated as small entities.  

For this reason, we believe that the proposed amendments would not, if adopted, have a 

significant economic impact on a substantial number of small entities.  

The Commission encourages written comments on the certification. We solicit comment 

as to whether the proposed form and rule amendments could have an effect on small entities that 

 

509  17 CFR 230.157 (defining “small business” or “small organization” under the Securities Act for purposes 
of the Regulatory Flexibility Act); 15 U.S.C 77c(b)(1) (defining “small entity” to mean “small business,” 
“small organization,” or “small governmental jurisdiction”). 

510  17 CFR 270.0-10(a). 
511  17 CFR 270.0-10(b). 



306 

has not been considered. We ask that commenters describe the nature of any impact on small 

entities and provide empirical data to support the extent of the impact. 

VI. CONSIDERATION OF IMPACT ON THE ECONOMY 

For purposes of the Small Business Regulatory Enforcement Fairness Act of 1996 

(“SBREFA”), the Commission must advise OMB whether a proposed regulation constitutes a 

184 “major” rule. Under SBREFA, a rule is considered “major” where, if adopted, it results in or 

is likely to result in: 

• An annual effect on the economy of $100 million or more;  

• A major increase in costs or prices for consumers or individual industries; or 

• Significant adverse effects on competition, investment, or innovation. 

We request comment on whether our proposal would be a “major rule” for purposes of 

SBREFA. We solicit comment and empirical data on: 

• The potential effect on the U.S. economy on an annual basis; 

• Any potential increase in costs or prices for consumers or individual industries; 

and 

• Any potential effect on competition, investment, or innovation. 

Commenters are requested to provide empirical data and other factual support for their 

views to the extent possible. 

STATUTORY AUTHORITY 

The amendments contained in this release are being proposed under the authority set 

forth in the Securities Act, particularly sections 6, 7, 8, 10, 19, and 28 thereof [15 U.S.C. 77a et 

seq.]; the Exchange Act, particularly sections 3, 4, 10, 12, 13, 14, 15, 17, 23, 35A, and 36 thereof 

[15 U.S.C. 78a et seq.]; the Investment Company Act, particularly, Sections 8, 30, and 38 



307 

thereof, and the RILA Act, particularly section 101 thereof [Pub. L. No. 117–328, div. AA, title 

I, 136 Stat. 4459 (2022)].  

List of Subjects 

17 CFR Part 230 

Advertising, Confidential business information, Investment companies, Reporting and 

recordkeeping requirements, Securities. 

17 CFR Part 232 

Administrative practice and procedure, Reporting and recordkeeping requirements, 

Securities. 

17 CFR Part 239 

Reporting and recordkeeping requirements, Securities. 

17 CFR Part 274 

Investment companies, Reporting and recordkeeping requirements, Securities.  

TEXT OF RULE AND FORM AMENDMENTS 

For reasons set forth in the preamble, we are proposing to amend title 17, chapter II of the 

Code of Federal Regulations as follows: 

PART 230 – GENERAL RULES AND REGULATIONS, SECURITIES ACT OF 1933 

1. The authority citation for part 230 continues to read in part as follows: 

Authority: 15 U.S.C. 77b, 77b note, 77c, 77d, 77f, 77g, 77h, 77j, 77r, 77s, 77z-3, 77sss, 

78c, 78d, 78j, 78l, 78m, 78n, 78o, 78o-7 note, 78t, 78w, 78ll(d), 78mm, 80a-8, 80a-24, 80a-28, 

80a-29, 80a-30, and 80a-37, and Pub. L. 112-106, sec. 201(a), sec. 401, 126 Stat. 313 (2012), 

unless otherwise noted. 

* * * * * 



308 

Sections 230.400 to 230.499 issued under secs. 6, 8, 10, 19, 48 Stat. 78, 79, 81, and 85, as 

amended (15 U.S.C. 77f, 77h, 77j, 77s). 

Sec. 230.457 also issued under secs. 6 and 7, 15 U.S.C. 77f and 77g. 

* * * * * 

2. Revise §230.156 to read as follows: 

§ 230.156 Investment company and registered index-linked annuity sales literature. 

(a) Under the Federal securities laws, including section 17(a) of the Securities Act of 

1933 (15 U.S.C. 77q(a)) and section 10(b) of the Securities Exchange Act of 1934 (15 U.S.C. 

78j(b)) and § 240.10b-5 of this chapter (Rule 10b-5) thereunder, it is unlawful for any person, 

directly or indirectly, by the use of any means or instrumentality of interstate commerce or of the 

mails, to use sales literature which is materially misleading in connection with the offer or sale of 

registered index-linked annuity (as defined in § 230.405 (Rule 405)) securities or securities 

issued by an investment company. Under these provisions, sales literature is materially 

misleading if it:  

(1) Contains an untrue statement of a material fact; or  

(2) Omits to state a material fact necessary in order to make a statement made, in the light 

of the circumstances of its use, not misleading. 

(b) Whether or not a particular description, representation, illustration, or other statement 

involving a material fact is misleading depends on evaluation of the context in which it is made. 

In considering whether a particular statement involving a material fact is or might be misleading, 

weight should be given to all pertinent factors, including, but not limited to, those listed below. 

(1) A statement could be misleading because of: 



309 

(i) Other statements being made in connection with the offer of sale or sale of the 

securities in question; 

(ii) The absence of explanations, qualifications, limitations or other statements necessary 

or appropriate to make such statement not misleading; or 

(iii) General economic or financial conditions or circumstances. 

(2) Representations about past or future investment performance could be misleading 

because of statements or omissions made involving a material fact, including situations where: 

(i) Portrayals of past income, gain, or growth of assets convey an impression of the net 

investment results achieved by an actual or hypothetical investment which would not be justified 

under the circumstances, including portrayals that omit explanations, qualifications, limitations, 

or other statements necessary or appropriate to make the portrayals not misleading; and 

(ii) Representations, whether express or implied, about future investment performance, 

including: 

(A) Representations, as to security of capital, possible future gains or income, or 

expenses associated with an investment; 

(B) Representations implying that future gains or income may be inferred from or 

predicted based on past investment performance; or 

(C) Portrayals of past performance, made in a manner which would imply that gains or 

income realized in the past would be repeated in the future. 

(3) A statement involving a material fact about the characteristics or attributes of an 

investment company or registered index-linked annuity could be misleading because of: 



310 

(i) Statements about possible benefits connected with or resulting from services to be 

provided or methods of operation which do not give equal prominence to discussion of any risks 

or limitations associated therewith; 

(ii) Exaggerated or unsubstantiated claims about management skill or techniques, 

characteristics of the investment company or registered index-linked annuity or an investment in 

securities issued by such company, services, security of investment or funds, effects of 

government supervision, or other attributes; and 

(iii) Unwarranted or incompletely explained comparisons to other investment vehicles or 

to indexes. 

(4) Representations about the fees or expenses associated with an investment in the fund 

or registered index-linked annuity could be misleading because of statements or omissions made 

involving a material fact, including situations where portrayals of the fees and expenses 

associated with an investment in the fund or registered index-linked annuity omit explanations, 

qualifications, limitations, or other statements necessary or appropriate to make the portrayals 

not misleading. 

(c) For purposes of this section, the term sales literature shall be deemed to include any 

communication (whether in writing, by radio, or by television) used by any person to offer to sell 

or induce the sale of securities of any investment company or registered index-linked annuity. 

Communications between issuers, underwriters and dealers are included in this definition of 

sales literature if such communications, or the information contained therein, can be reasonably 

expected to be communicated to prospective investors in the offer or sale of securities or are 

designed to be employed in either written or oral form in the offer or sale of securities. 



311 

(d) Nothing in this section may be construed to prevent a business development company 

or a registered closed-end investment company from qualifying for an exemption under § 

230.168 or § 230.169. 

3. Amend §230.172 by revising paragraph (d) to read as follows: 

§ 230.172 Delivery of prospectuses. 

* * * * * 

(d) Exclusions. This section shall not apply to any:  

(1) Offering of any investment company registered under the Investment Company Act of 

1940 (15 U.S.C. 80a-1 et seq.), other than a registered closed-end investment company;  

(2) A business combination transaction as defined in § 230.165(f)(1);  

(3) Offering registered on Form S-8 (§ 239.16b of this chapter); or 

(4) Offering of any registered index-linked annuity (as defined in §230.405 (Rule 405)) 

securities. 

4. Amend §230.405 by adding in alphabetical order definitions for “Form available solely 

to investment companies registered under the Investment Company Act of 1940” and 

“Registered index-linked annuity” to read as follows: 

§ 230.405 Definitions of terms. 

* * * * * 

Form available solely to investment companies registered under the Investment Company 

Act of 1940. A form available solely to investment companies registered under the Investment 

Company Act of 1940 includes the form used to register the offering of securities of a registered 

index-linked annuity for purposes of the Securities Act of 1933. 

* * * * * 



312 

Registered index-linked annuity. The term registered index-linked annuity means an 

annuity or an option available under an annuity: 

(1) That is deemed a security; 

(2) That is offered or sold in a registered offering; 

(3) That is issued by an insurance company that is the subject to the supervision of either 

the insurance commissioner or bank commissioner of any State or any agency or officer 

performing like functions as such commissioner; 

(4) That is not issued by an investment company; and  

(5) Whose value, either during the accumulation period or after annuitization or both, will 

earn positive or negative interest based, in part, on the performance of any index, rate, or 

benchmark. 

* * * * * 

5. Amend §230.415 by revising paragraph (b) to read as follows: 

§ 230.415 Delayed or continuous offering and sale of securities. 

* * * * * 

(b) This section shall not apply to any registration statement pertaining to a registered 

index-linked annuity (as defined in §230.405 (Rule 405)), securities issued by a face-amount 

certificate company, or redeemable securities issued by an open-end management company or 

unit investment trust under the Investment Company Act of 1940 or any registration statement 

filed by any foreign government or political subdivision thereof. 

6. Amend §230.424 by revising paragraph (f) to read as follows: 

§ 230.424 Filing of prospectuses, number of copies. 

* * * * * 



313 

(f) This section shall not apply with respect to prospectuses of an investment company 

registered under the Investment Company Act of 1940 (other than a registered closed-end 

investment company) or prospectuses that pertain to a registered index-linked annuity (as defined 

in §230.405 (Rule 405)). References to “form of prospectus” in paragraphs (a), (b), and (c) of 

this section shall be deemed also to refer to the form of Statement of Additional Information. 

* * * * * 

7. Amend §230.456 by adding paragraph (e) to read as follows: 

§ 230.456 Date of filing; timing of fee payment. 

* * * * * 

(e)(1) Notwithstanding paragraph (a) of this section, where a registration statement 

relates to an offering of registered index-linked annuity (as defined in §230.405 (Rule 405)) 

securities, an issuer shall be deemed to register an offering of an indeterminate amount of such 

securities and shall, not later than 90 days after the end of any fiscal year during which it has 

publicly offered such securities, pay a registration fee to the Commission calculated in 

accordance with § 230.457(u) (Rule 457(u)) and file Form 24F-2 (referenced in 17 CFR 274.24) 

with the Commission. 

Instruction 1 to paragraph (e)(1): To determine the date on which the registration fee 

must be paid, the first day of the 90-day period is the first calendar day of the fiscal year 

following the fiscal year for which the registration fee is to be paid. If the last day of the 90-day 

period falls on a Saturday, Sunday, or Federal holiday, the registration fee is due on the first 

business day thereafter.  

(2) When registering an offering of an indeterminate amount of registered index-linked 

annuity securities pursuant to paragraph (e)(1) of this section, the securities sold will be 

considered registered, for purposes of section 6(a) of the Act, if the registration fee has been paid 



314 

and the issuer has filed a Form 24F-2 filing pursuant to paragraph (e)(1) of this section not later 

than the end of the 90-day period.  

(3) A registration statement filed in accordance with the registration fee payment 

provisions of paragraph (e)(1) of this section will be considered filed as to the securities 

identified in the registration statement for purposes of this section and section 5 of the Act when 

it is received by the Commission, if it complies with all other requirements under the Act, 

including this part.  

(4) For purposes of this section, if an issuer ceases operations, the date the issuer ceases 

operations will be deemed to be the end of its fiscal year. In the case of a liquidation, merger, or 

sale of all or substantially all of the assets (“merger”) of the issuer, the issuer will be deemed to 

have ceased operations for the purposes of this section on the date the merger is consummated; 

provided, however, that in the case of a merger of an issuer or a series of an issuer 

(“Predecessor”) with another issuer or a series of an issuer (“Successor”), the Predecessor will 

not be deemed to have ceased operations and the Successor will assume the obligations, fees, and 

redemption credits of the Predecessor incurred pursuant to this section if the Successor:  

(i) Had no assets or liabilities, other than nominal assets or liabilities, and no operating 

history immediately prior to the merger;  

(ii) Acquired substantially all of the assets and assumed substantially all of the liabilities 

and obligations of the Predecessor; and  

(iii) The merger is not designed to result in the Predecessor merging with, or substantially 

all of its assets being acquired by, an issuer (or a series of an issuer) that would not meet the 

conditions of paragraph (e)(4)(i) of this section.  



315 

(5) An issuer paying the fee required by paragraph (e)(1) of this section or any portion 

thereof more than 90 days after the end of the fiscal year of the issuer shall pay to the 

Commission interest on unpaid amounts, calculated based on the interest rate in effect at the time 

of the interest payment by reference to the “current value of funds rate” on the Treasury 

Department's Bureau of Fiscal Service internet site at https://fiscal.treasury.gov/, or by calling 

(202) 874-6995, and using the following formula: I = (X) (Y) (Z/365), where: I = Amount of 

interest due; X = Amount of registration fee due; Y = Applicable interest rate, expressed as a 

fraction; Z = Number of days by which the registration fee payment is late. The payment of 

interest pursuant to this paragraph (e)(5) shall not preclude the Commission from bringing an 

action to enforce the requirements of this paragraph (e).  

(6) An immaterial or unintentional failure to comply with a requirement of this paragraph 

(e) will not result in a violation of section 6(a) of the Act (15 U.S.C. 77f(a)), so long as:  

(i) A good faith and reasonable effort was made to comply with the requirement; and  

(ii) In the case of a late payment of a registration fee, the issuer pays the registration fee 

and any interest due thereon as soon as practicable after discovery of the failure to pay the 

registration fee. 

8. Amend §230.457 by revising paragraph (u) to read as follows: 

§ 230.457 Computation of fee. 

* * * * * 

(u) Where an issuer elects or is required to register an offering of an indeterminate 

amount of exchange-traded vehicle securities in accordance with § 230.456(d) (Rule 456(d)) or 

registered index-linked annuity securities (as defined in §230.405 (Rule 405)) in accordance with 

§ 230.456(e) (Rule 456(e)), the registration fee is to be calculated in the following manner: 

(1) Determine the aggregate sale price of such securities sold during the fiscal year. 

https://www.ecfr.gov/current/title-17/section-230.456#p-230.456(d)
https://www.ecfr.gov/current/title-17/section-230.456#p-230.456(d)
https://www.ecfr.gov/current/title-17/section-230.456#p-230.456(d)


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(2) Determine the sum of: 

(i) The aggregate redemption or repurchase price of such securities redeemed or 

repurchased during the fiscal year; and 

(ii) The aggregate redemption or repurchase price of such securities redeemed or 

repurchased during a prior fiscal year that were not used previously to reduce registration fees 

payable to the Commission, if the prior fiscal year ended no earlier than August 1, 2021 in the 

case of exchange traded vehicle securities, or [EFFECTIVE DATE OF THE FINAL RULE] in 

the case of registered index-linked annuity securities. 

(3) Subtract the amount in paragraph (u)(2) of this section from the amount in paragraph 

(u)(1) of this section. If the resulting amount is positive, the amount is the net sales amount. If 

the resulting amount is negative, it is the amount of redemption credits available for use in future 

years to offset sales. 

(4) The registration fee is calculated by multiplying the net sales amount by the fee 

payment rate in effect on the date of the fee payment. If the issuer determines that it had net 

redemptions or repurchases for the fiscal year, no registration fee is due. 

9. Amend §230.485 by revising the section heading and paragraphs (a)(1) and (b) 

introductory text to read as follows: 

§ 230.485 Effective date of post-effective amendments filed by certain registered investment 

companies or issuers offering registered index-linked annuities. 

(a) * * * 

(1) Except as otherwise provided in this section, a post-effective amendment to a 

registration statement filed by a registered open-end management investment company, unit 

investment trust or, separate account as defined in section 2(a)(37) of the Investment Company 



317 

Act of 1940 [15 U.S.C. 80a-2(a)(37)] or to register an offering of a registered index-linked 

annuity securities (as defined in §230.405 (Rule 405)) shall become effective on the sixtieth day 

after the filing thereof, or a later date designated by the registrant on the facing sheet of the 

amendment, which date shall be no later than eighty days after the date on which the amendment 

is filed. 

* * * * * 

(b) Immediate effectiveness. Except as otherwise provided in this section, a post-effective 

amendment to a registration statement filed by a registered open-end management investment 

company, unit investment trust or separate account as defined in section 2(a)(37) of the 

Investment Company Act of 1940 [15 U.S.C. 80a-2(a)(37)] or to register an offering of a 

registered index-linked annuity securities shall become effective on the date upon which it is 

filed with the Commission, or a later date designated by the registrant on the facing sheet of the 

amendment, which date shall be not later than thirty days after the date on which the amendment 

is filed, except that a post-effective amendment including a designation of a new effective date 

pursuant to paragraph (b)(1)(iii) of this section shall become effective on the new effective date 

designated therein, Provided, that the following conditions are met: 

* * * * * 

10. Amend §230.497 by revising the section heading and paragraphs (c) and (e) to read as 

follows: 

§ 230.497 Filing of investment company or registered index-linked annuity prospectuses—

number of copies 

* * * * * 



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(c) For investment companies filing on §§239.15A and 274.11A of this chapter (Form N-

1A), §§239.17a and 274.11b of this chapter (Form N-3), §§239.17b and 274.11c of this chapter 

(Form N-4), or §§239.17c and 274.11d of this chapter (Form N-6), or an offering of registered 

index-linked annuities (as defined in Rule 405 (§230.405)) being filed on Form N-4, within five 

days after the effective date of a registration statement or the commencement of a public offering 

after the effective date of a registration statement, whichever occurs later, 10 copies of each form 

of prospectus and form of Statement of Additional Information used after the effective date in 

connection with such offering shall be filed with the Commission in the exact form in which it 

was used. Investment companies filing on Forms N-1A, N-3, N-4, or N-6 and issuers of 

registered index-linked annuities filing on Form N-4 must, if applicable pursuant to General 

Instruction C.3.(g) of Form N-1A, General Instruction C.3.(h) of Form N-3, General Instruction 

C.3.(h) of Form N-4, or General Instruction C.3.(h) of Form N-6, submit an Interactive Data File 

(as defined in §232.11 of this chapter).  

* * * * * 

(e) For investment companies filing on §§239.15A and 274.11A of this chapter (Form N-

1A), §§239.17a and 274.11b of this chapter (Form N-3), §§239.17b and 274.11c of this chapter 

(Form N-4), or §§239.17c and 274.11d of this chapter (Form N-6), or an offering of registered 

index-linked annuities being filed on Form N-4, after the effective date of a registration 

statement, no prospectus that purports to comply with Section 10 of the Act (15 U.S.C. 77j) or 

Statement of Additional Information that varies from any form of prospectus or form of 

Statement of Additional Information filed pursuant to paragraph (c) of this section shall be used 

until five copies thereof have been filed with, or mailed for filing to the Commission. Investment 

companies filing on Forms N-1A, N-3, N-4, or N-6 and issuers of registered index-linked 



319 

annuities filing on Form N-4 must, if applicable pursuant to General Instruction C.3.(g) of Form 

N-1A, General Instruction C.3.(h) of Form N-3, General Instruction C.3.(h) of Form N-4, or 

General Instruction C.3.(h) of Form N-6, submit an Interactive Data File (as defined in §232.11 

of this chapter).  

* * * * * 

11. Revise §230.498A to read as follows: 

§ 230.498A Summary Prospectuses for separate accounts offering variable annuity and 

variable life insurance contracts, and contracts offering registered index-linked options. 

(a) Definitions. For purposes of this section: 

Class means a class of a Contract that varies principally with respect to distribution-

related fees and expenses. 

Contract means a Variable Annuity Contract, a Variable Life Insurance Contract, or a 

RILA Contract as defined in this section, respectively, as well as any Variable Annuity Contract 

or RILA Contract that offers a combination of Index-Linked Options, Variable Options, and/or 

Fixed Options. 

Fixed Option means an Investment Option under a Contract pursuant to which the value 

of the Contract (for a Form N-3 or Form N-4 Registrant, either during an accumulation period or 

after annuitization, or both) will earn interest at a rate specified by the Company, subject to a 

minimum guaranteed rate under the Contract. 

Index-Linked Option means an Investment Option offered under a Contract, pursuant to 

which the value of the Contract, either during an accumulation period or after annuitization, or 

both, will earn positive or negative interest based, in part, on the performance of a specified 

index, rate, or benchmark (such as a registered exchange-traded fund that tracks an index). 



320 

Initial Summary Prospectus means the initial summary prospectus described in paragraph 

(b) of this section. 

Insurance Company means the insurance company issuing the Contract, which company 

is subject to State supervision. The Insurance Company may also be the depositor or sponsor of 

any Registered Separate Account in which the Contract participates. 

Investment Option means a Fixed Option, an Index-Linked Option, and/or a Variable 

Option, as applicable. 

Portfolio Company means any company in which a Registrant on Form N-4 or Form N-6 

invests and which may be selected as a Variable Option by the investor. 

Portfolio Company Prospectus means the Statutory Prospectus of a Portfolio 

Company and a summary prospectus of a Portfolio Company permitted by § 230.498. 

Registered Separate Account means a separate account (as defined in section 2(a)(14) of 

the Securities Act (15 U.S.C. 77b(a)(14)) that has an effective registration statement on §§ 

239.17a and 274.11b of this chapter (Form N-3), §§ 239.17b and 274.11c of this chapter (Form 

N-4), or §§ 239.17c and 274.11d of this chapter (Form N-6) and that has a 

current prospectus that satisfies the requirements of section 10(a) of the Act (15 U.S.C. 77j(a)). 

Registrant means, as applicable, a Registered Separate Account or the Insurance 

Company.  

RILA Contract means any accumulation contract or annuity contract, any portion thereof, 

or any unit of interest or participation therein, issued by an Insurance Company, that offers 

Index-Linked Options. 

Statement of Additional Information means the statement of additional 

information required by Part B of Form N-1A, Form N-3, Form N-4, or Form N-6.321 

Statutory Prospectus means a prospectus that satisfies the requirements of section 10(a) 

of the Act (15 U.S.C. 77j(a)). 

Summary Prospectus refers to both the Initial Summary Prospectus and the Updating 

Summary Prospectus. 

Updating Summary Prospectus means the updating summary prospectus described 

in paragraph (c) of this section. 

Variable Annuity Contract means any accumulation contract or annuity contract, any 

portion thereof, or any unit of interest or participation therein, issued by an Insurance Company, 

pursuant to which the value of the contract, either during an accumulation period or after 

annuitization, or both, varies according to the investment experience of a Portfolio Company. 

Variable Life Insurance Contract means a life insurance contract, issued by an Insurance 

Company, that provides for death benefits and cash values that may vary with the investment 

performance of any separate account. 

Variable Option means:  

(1) In the context of a Registrant on Form N-4 or Form N-6, an Investment Option under 

any Contract pursuant to which the value of the Contract (for a Form N-4 Registrant, either 

during an accumulation period or after annuitization, or both) varies according to the investment 

experience of a Portfolio Company;  

(2) In the context of a Registrant on Form N-3, any portfolio of investments in which 

a Registrant on Form N-3 invests and which may be selected as an option by the investor. 

(b) General Requirements for Initial Summary Prospectus. An Initial Summary 

Prospectus that complies with this paragraph (b) will be deemed to be a prospectus that is 

authorized under section 10(b) of the Act (15 U.S.C. 77j(b)) and section 24(g) of the Investment 



322 

Company Act (15 U.S.C. 80a-24(g)) for the purposes of section 5(b)(1) of the Act (15 U.S.C. 

77e(b)(1)). 

(1) Scope of Initial Summary Prospectus. An Initial Summary Prospectus may only 

describe a single Contract (but may describe more than one Class of the Contract) currently 

offered by the Registrant under the Statutory Prospectus to which the Initial Summary 

Prospectus relates. 

(2) Cover Page or Beginning of Initial Summary Prospectus. Include on the front cover 

page or the beginning of the Initial Summary Prospectus: 

(i) The Insurance Company’s name; 

(ii) The name of the Contract, and the Class or Classes if any, to which the Initial 

Summary Prospectus relates; 

(iii) A statement identifying the document as a “Summary Prospectus for New Investors”; 

(iv) The approximate date of the first use of the Initial Summary Prospectus; 

(v) The following legend, which for Initial Summary Prospectuses of Contracts registered 

on Form N-4 would be included along with the statements described in Item 1(a)(6) through (8) 

of Form N-4: 

This Summary Prospectus summarizes key features of the [Contract]. 

Before you invest, you should also review the prospectus for the [Contract], which 

contains more information about the [Contract's] features, benefits, and risks. You can find this 

document and other information about the [Contract] online at [______]. You can also obtain 

this information at no cost by calling [________] or by sending an email request to [______]. 

You may cancel your [Contract] within 10 days of receiving it without paying fees or 

penalties. In some states, this cancellation period may be longer. Upon cancellation, you will 



323 

receive either a full refund of the amount you paid with your application or your total contract 

value. You should review the prospectus, or consult with your investment professional, for 

additional information about the specific cancellation terms that apply. 

Additional information about certain investment products, including [variable 

annuities/registered index-linked annuities/variable life insurance contracts], has been prepared 

by the Securities and Exchange Commission's staff and is available at Investor.gov. 

(A) A Registrant may modify the legend so long as the modified legend contains 

comparable information. 

(B) The legend must provide a website address, other than the address of the 

Commission's electronic filing system; toll-free telephone number; and email address that 

investors can use to obtain the Statutory Prospectus and other materials, request other 

information about the Contract, and make investor inquiries. The website address must be 

specific enough to lead investors directly to the Statutory Prospectus and other materials that are 

required to be accessible under paragraph (h)(1) of this section, rather than to the home page or 

other section of the website on which the materials are posted. The website could be a central site 

with prominent links to each document. The legend may indicate, if applicable, that the Statutory 

Prospectus and other information are available from a financial intermediary (such as a broker-

dealer) through which the Contract may be purchased or sold. If a Registered Separate Account 

that has an effective registration statement on Form N-3 relies on § 270.30e-3 of this chapter to 

transmit a report, the legend must also include the website address required by § 270.30e-

3(c)(1)(iii) of this chapter if different from the website address required by this paragraph 

(b)(2)(v)(B). 



324 

(C) The paragraph of the legend regarding cancellation of the Contract may be omitted if 

not applicable. If this paragraph is included in the legend, the paragraph must be presented in a 

manner reasonably calculated to draw investor attention to that paragraph. 

(D) The legend may include instructions describing how a shareholder can elect to 

receive prospectuses or other documents and communications by electronic delivery. 

(3) Back Cover Page or Last Page of Initial Summary Prospectus. 

(i) If a Registrant incorporates any information by reference into the Summary 

Prospectus, include a legend identifying the type of document (e.g., Statutory Prospectus) from 

which the information is incorporated and the date of the document. If a Registrant incorporates 

by reference a part of a document, the legend must clearly identify the part by page, paragraph, 

caption, or otherwise. If information is incorporated from a source other than the Statutory 

Prospectus, the legend must explain that the incorporated information may be obtained, free of 

charge, in the same manner as the Statutory Prospectus. 

(ii) Include on the bottom of the back cover page or the last page of the Initial Summary 

Prospectus the EDGAR contract identifier for the contract in type size smaller than that generally 

used in the prospectus (e.g., 8-point modern type). 

(4) Table of Contents. An Initial Summary Prospectus may include a table of contents 

meeting the requirements of § 230.481(c). 

(5) Contents of Initial Summary Prospectus. An Initial Summary Prospectus must contain 

the information required by this paragraph (b)(5) with respect to the applicable registration form, 

and only the information required by this paragraph (b)(5), in the order provided in paragraphs 

(b)(5)(i) through (ix) of this section, except that, for an Initial Summary Prospectus related to a 



325 

Contract registered on Form N-4, provide the information provided in paragraph (b)(5)(ii) before 

the information provided by paragraph (b)(5)(i). 

(i) Under the heading “Important Information You Should Consider About the 

[Contract],” the information required by Item 2 of Form N-3, Item 3 of Form N-4, or Item 2 of 

Form N-6. 

(ii) Under the heading “Overview of the [Contract],” the information required by Item 3 

of Form N-3, Item 2 of Form N-4, or Item 3 of Form N-6. 

(iii) Under the heading “Standard Death Benefits,” the information required by Item 

10(a) of Form N-6. 

(iv) Under the heading “Benefits Available Under the [Contract],” the information 

required by Item 11(a) of Form N-3 or Item 10(a) of Form N-4. Under the heading “Other 

Benefits Available Under the [Contract],” the information required by Item 11(a) of Form N-6. 

(v) Under the heading “Buying the [Contract],” the information required by Item 12(a) of 

Form N-3, Item 11(a) of Form N-4, or Item 9(a) through (c) of Form N-6. 

(vi) Under the heading “How Your [Contract] Can Lapse,” the information required by 

Item 14(a) through (c) of Form N-6. 

(vii) Under the heading “Making Withdrawals: Accessing the Money in Your 

[Contract],” the information required by Item 13(a) of Form N-3, Item 12(a) of Form N-4, or 

Item 12(a) of Form N-6. 

(viii) Under the heading “Additional Information About Fees,” the information required 

by Item 4 of Form N-3, Item 4 of Form N-4, or Item 4 of Form N-6. 

(ix) Under the heading “Appendix: [Portfolio Companies][Investment Options/Portfolio 

Companies] Available Under the Contract,” include as an appendix the information required by 



326 

Item 18 of Form N-3, Item 17 of Form N-4, or Item 18 of Form N-6. Alternatively, an Initial 

Summary Prospectus for a Contract registered on Form N-3 may include the information 

required by Item 19 of Form N-3, under the heading “Additional Information About Investment 

Options Available Under the Contract.” 

(c) General Requirements for Updating Summary Prospectus. An Updating Summary 

Prospectus that complies with this paragraph (c) will be deemed to be a prospectus that is 

authorized under section 10(b) of the Act (15 U.S.C. 77j(b)) and section 24(g) of the Investment 

Company Act (15 U.S.C. 80a-24(g)) for the purposes of section 5(b)(1) of the Act (15 U.S.C. 

77e(b)(1)). 

(1) Use of Updating Summary Prospectus. A Registrant may only use an Updating 

Summary Prospectus if the Registrant uses an Initial Summary Prospectus for each currently 



327 

offered Contract described under the Statutory Prospectus to which the Updating Summary 

Prospectus relates. 

(2) Scope of Updating Summary Prospectus. An Updating Summary Prospectus may 

describe one or more Contracts (and more than one Class) described under the Statutory 

Prospectus to which the Updating Summary Prospectus relates. 

(3) Cover Page or Beginning of Updating Summary Prospectus. Include on the front 

cover page or at the beginning of the Updating Summary Prospectus: 

(i) The Insurance Company’s name; 

(ii) The name of the Contract(s) and the Class or Classes, if any, to which the Updating 

Summary Prospectus relates; 

(iii) A statement identifying the document as an “Updating Summary Prospectus”; 

(iv) The approximate date of the first use of the Updating Summary Prospectus; and 

(v) The following legend, which must meet the requirements of paragraphs (b)(2)(v)(A), 

(B), and (D) of this section, as applicable, and for Updating Summary Prospectuses of Contracts 

registered on Form N-4 would be included along with the statements described in Item 1(a)(6) 

through (8) of Form N-4: 

The prospectus for the [Contract] contains more information about the [Contract], 

including its features, benefits, and risks. You can find the current prospectus and other 



328 

information about the [Contract] online at [______]. You can also obtain this information at no 

cost by calling [________] or by sending an email request to [______]. 

Additional information about certain investment products, including [variable 

annuities/registered index-linked annuities/variable life insurance contracts], has been prepared 

by the Securities and Exchange Commission's staff and is available at Investor.gov. 

(4) Back Cover Page or Last Page of Updating Summary Prospectus. Include on the 

bottom of the back cover page or the last page of the Updating Summary Prospectus: 

(i) The legend required by paragraph (b)(3)(i) of this section; and 

(ii) The EDGAR contract identifier(s) for each contract in type size smaller than that 

generally used in the prospectus (e.g., 8-point modern type). 

(5) Table of Contents. An Updating Summary Prospectus may include a table of 

contents meeting the requirements of § 230.481(c). 

(6) Contents of Updating Summary Prospectus. An Updating Summary Prospectus must 

contain the information required by this paragraph (c)(6) with respect to the applicable 

registration form, in the order provided in paragraphs (c)(6)(i) through (iv) of this section. 

(i) If any changes have been made with respect to the Contract after the date of the most 

recent Updating Summary Prospectus or Statutory Prospectus that was sent or given to investors 

with respect to the availability of Investment Options (for Registrants on Form N-3) or Portfolio 

Companies (for Registrants on Forms N-4 and N-6) under the Contract (including, for RILA 

Contracts, a change to any of the features of the Index-Linked Options disclosed in the table 

that Item 17(b) of Form N-4 requires), or the disclosure that the Registrant included in response 

to Item 2 (Key Information), Item 3 (Overview of the Contract), Item 4 (Fee Table), Item 11 

(Benefits Available Under the Contract), Item 12 (Purchases and Contract Value), or Item 13 



329 

(Surrenders and Withdrawals) of Form N-3; Item 2 (Overview of the Contract), Item 3 (Key 

Information), Item 4 (Fee Table), Item 10 (Benefits Available Under the Contract), Item 11 

(Purchases and Contract Value), or Item 12 (Surrenders and Withdrawals) of Form N-4; and 

Item 2 (Key Information), Item 3 (Overview of the Contract), Item 4 (Fee Table), Item 9 

(Premiums), Item 10 (Standard Death Benefits), Item 11 (Other Benefits Available Under the 

Contract), Item 12 (Surrenders and Withdrawals), or Item 14 (Lapse and Reinstatement) of 

Form N-6, include the following as applicable, under the heading “Updated Information About 

Your [Contract]”: 

(A) The following legend: “The information in this Updating Summary Prospectus is a 

summary of certain [Contract] features that have changed since the Updating Summary 

Prospectus dated [date]. This may not reflect all of the changes that have occurred since you 

entered into your [Contract].” 

(B) As applicable, provide a concise description of each change specified in paragraph 

(c)(6)(i) of this section. Provide enough detail to allow investors to understand the change and 

how it will affect investors, including indicating whether the change only applies to certain 

Contracts described in the Updating Summary Prospectus. 

(ii) In addition to the changes specified in paragraph (c)(6)(i) of this section, a Registrant 

may provide a concise description of any other information relevant to the Contract within the 

time period that paragraph (c)(6)(i) of this section specifies, under the heading “Updated 

Information About Your [Contract].” Any additional information included pursuant to this 



330 

paragraph (c)(6)(ii) should not, by its nature, quantity, or manner of presentation, obscure or 

impede understanding of the information that paragraph (c)(6)(i) of this section requires. 

(iii) Under the heading “Important Information You Should Consider About the 

[Contract],” provide the information required by Item 2 of Form N-3, Item 3 of Form N-4, or 

Item 2 of Form N-6. 

(iv) Under the heading “Appendix: [Portfolio Companies/Investment Options/Portfolio 

Companies] Available Under the [Contract],” include as an appendix the information required by 

Item 18 of Form N-3, Item 17 of Form N-4, or Item 18 of Form N-6. Alternatively, an Updating 

Summary Prospectus for a Contract registered on Form N-3 may include, under the heading 

“Additional Information About [Investment Options] Available Under the [Contract],” the 

information required by Item 19 of Form N–3. 

(d) Incorporation by Reference into a Summary Prospectus. 

(1) Except as provided by paragraph (d)(2) of this section, information may not be 

incorporated by reference into a Summary Prospectus. Information that is incorporated by 

reference into a Summary Prospectus in accordance with paragraph (d)(2) of this section need 

not be sent or given with the Summary Prospectus. 

(2) A Registrant may incorporate by reference into a Summary Prospectus any or all of 

the information contained in the Registrant's Statutory Prospectus and Statement of Additional 

Information, and any information from the Registrant's reports under § 270.30e-1 of this chapter 

that the Registrant has incorporated by reference into the Registrant's Statutory Prospectus, 

provided that: 

(i) The conditions of paragraphs (b)(2)(v)(B), (c)(3)(v), and (h) of this section are met; 



331 

(ii) A Registrant may not incorporate by reference into a Summary Prospectus 

information that paragraphs (b) and (c) of this section require to be included in an Initial 

Summary Prospectus or Updating Summary Prospectus, respectively; and 

(iii) Information that is permitted to be incorporated by reference into the Summary 

Prospectus may be incorporated by reference into the Summary Prospectus only by reference to 

the specific document that contains the information, not by reference to another document that 

incorporates such information by reference. 

(3) For purposes of § 230.159, information is conveyed to a person not later than the time 

that a Summary Prospectus is received by the person if the information is incorporated by 

reference into the Summary Prospectus in accordance with paragraph (d)(2) of this section. 

(e) Terms used in the Summary Prospectus. Define special terms used in the Initial 

Summary Prospectus and Updating Summary Prospectus using any presentation style that clearly 

conveys their meaning to investors, such as the use of a glossary or list of definitions. 

(f) Transfer of the Contract Security. Any obligation under section 5(b)(2) of the Act (15 

U.S.C. 77e(b)(2)) to have a Statutory Prospectus precede or accompany the carrying or delivery 

of a Contract security in an offering registered on Form N-3, Form N-4, or Form N-6 is satisfied 

if: 

(1) A Summary Prospectus is sent or given no later than the time of the carrying or 

delivery of the Contract security (an Initial Summary Prospectus in the case of a purchase of a 

new Contract, or an Updating Summary Prospectus in the case of additional purchase payments 

in an existing Contract); 



332 

(2) The Summary Prospectus is not bound together with any materials except Portfolio 

Company Prospectuses for Portfolio Companies available as Variable Options under the 

Contract, provided that: 

(i) All of the Portfolio Companies are available as investment options to the person to 

whom such documents are sent or given; and 

(ii) A table of contents identifying each Portfolio Company Prospectus that is bound 

together, and the page number on which each document is found, is included at the beginning or 

immediately following a cover page of the bound materials. 

(3) The Summary Prospectus that is sent or given satisfies the requirements of paragraph 

(b) or (c) of this section, as applicable, at the time of the carrying or delivery of the Contract 

security; and 

(4) The conditions set forth in paragraph (h) of this section are satisfied. 

(g) Sending Communications. A communication relating to an offering registered on 

Form N-3, Form N-4, or Form N-6 sent or given after the effective date of a Contract's 

registration statement (other than a prospectus permitted or required under section 10 of the Act) 

shall not be deemed a prospectus under section 2(a)(10) of the Act (15 U.S.C. 77b(a)(10)) if: 

(1) It is proved that prior to or at the same time with such communication a 

Summary Prospectus was sent or given to the person to whom the communication was made; 

(2) The Summary Prospectus is not bound together with any materials, except as 

permitted by paragraph (f)(2) of this section; 

(3) The Summary Prospectus that was sent or given satisfies the requirements of 

paragraph (b) or (c) of this section, as applicable, at the time of such communication; and 

(4) The conditions set forth in paragraph (h) of this section are satisfied. 



333 

(h) Availability of the Statutory Prospectus and Certain Other Documents. 

(1) The current Initial Summary Prospectus, Updating Summary Prospectus, Statutory 

Prospectus, Statement of Additional Information, and in the case of a Registrant on Form N-3, 

the Registrant’s most recent annual and semi-annual reports to shareholders under § 270.30e-1 of 

this chapter, are publicly accessible, free of charge, at the website address specified on the cover 

page or beginning of the Summary Prospectuses, on or before the time that the 

Summary Prospectuses are sent or given and current versions of those documents remain on the 

website through the date that is at least 90 days after: 

(i) In the case of reliance on paragraph (f) of this section, the date that 

the Contract security is carried or delivered; or 

(ii) In the case of reliance on paragraph (g) of this section, the date that the 

communication is sent or given. 

(2) The materials that are accessible in accordance with paragraph (h)(1) of this section 

must be presented on the website in a format, or formats, that: 

(i) Are human-readable and capable of being printed on paper in human-readable format; 

(ii) Permit persons accessing the Statutory Prospectus or Statement of Additional 

Information for the Contract to move directly back and forth between each section heading in a 

table of contents of such document and the section of the document referenced in that section 

heading; provided that, in the case of the Statutory Prospectus, the table of contents is either 

required by § 230.481(c) or contains the same section headings as the table of contents required 

by § 230.481(c); and 

(iii) Permit persons accessing a Summary Prospectus to move directly back and forth 

between: 



334 

(A) Each section of the Summary Prospectus and any section of the Statutory 

Prospectus and Contract Statement of Additional Information that provides additional detail 

concerning that section of the Summary Prospectus; or 

(B) Links located at both the beginning and end of the Summary Prospectus, or that 

remain continuously visible to persons accessing the Summary Prospectus, and tables of contents 

of both the Statutory Prospectus and the Contract Statement of Additional Information that meet 

the requirements of paragraph (h)(2)(ii) of this section. 

(iv) Permit persons accessing the Summary Prospectus to view the definition of each 

special term used in the Summary Prospectus (as required by paragraph (e) of this section) upon 

command (e.g., by moving or “hovering” the computer's pointer or mouse over the term, or 

selecting the term on a mobile device); or permits persons accessing 

the Contract Summary Prospectus to move directly back and forth between each special term and 

the corresponding entry in any glossary or list of definitions in 

the Contract Summary Prospectus (as described in paragraph (e) of this section). 

(3) Persons accessing the materials specified in paragraph (h)(1) of this section must be 

able to permanently retain, free of charge, an electronic version of such materials in a format, or 

formats, that meet each of the requirements of paragraphs (h)(2)(i) and (ii) of this section. 

(4) The conditions set forth in paragraphs (h)(1) through (3) of this section shall be 

deemed to be met, notwithstanding the fact that the materials specified in paragraph (h)(1) of this 

section are not available for a time in the manner required by paragraphs (h)(1) through (3) of 

this section, provided that: 



335 

(i) The Registrant has reasonable procedures in place to ensure that the 

specified materials are available in the manner required by paragraphs (h)(1) through (3) of this 

section; and 

(ii) The Registrant takes prompt action to ensure that the specified documents become 

available in the manner required by paragraphs (h) through (3) of this section, as soon as 

practicable following the earlier of the time at which it knows or reasonably should have known 

that the documents are not available in the manner required by paragraphs (h)(1) through (3) of 

this section. 

(i) Other Requirements 

(1) Delivery upon request. If paragraph (f) or (g) of this section is relied on with respect 

to a Contract, the Registrant (or a financial intermediary through which the Contract may be 

purchased) must send, at no cost to the requestor and by U.S. first class mail or other reasonably 

prompt means, a paper copy of the Contract Statutory Prospectus, Contract Statement of 

Additional Information, and in the case of a Registrant on Form N-3, the Registrant's most recent 

annual and semi-annual reports to shareholders under § 270.30e-1 of this chapter, to any person 

requesting such a copy within three business days after receiving a request for a paper copy. If 

paragraph (f) or (g) of this section is relied on with respect to a Contract, the Registrant (or a 

financial intermediary through which Contract may be purchased) must send, at no cost to the 

requestor, and by email, an electronic copy of any of the documents listed in this paragraph (i)(1) 

to any person requesting a copy of such document within three business days after receiving a 

request for an electronic copy. The requirement to send an electronic copy of a document may be 

satisfied by sending a direct link to the online document; provided that a current version of the 

document is directly accessible through the link from the time that the email is sent through the 



336 

date that is six months after the date that the email is sent and the email explains both how long 

the link will remain useable and that, if the recipient desires to retain a copy of the document, he 

or she should access and save the document. 

(2) Greater prominence. If paragraph (f) or (g) of this section is relied on with respect to 

a Contract, the Summary Prospectus shall be given greater prominence than any materials that 

accompany the Summary Prospectus. 

(3) Convenient for reading and printing. If paragraph (f) or (g) of this section is relied on 

with respect to a Contract: 

(i) The materials that are accessible in accordance with paragraph (h)(1) of this section 

must be presented on the website in a format, or formats, that are convenient for both reading 

online and printing on paper; and 

(ii) Persons accessing the materials that are accessible in accordance with paragraph 

(h)(1) of this section must be able to permanently retain, free of charge, an electronic version of 

such materials in a format, or formats, that are convenient for both reading online and printing on 

paper. 

(4) Website addresses. If paragraph (f) or (g) of this section is relied on with respect to 

a Contract, any website address that is included in an electronic version of the 

Summary Prospectus must include an active hyperlink or provide another means of facilitating 

access through equivalent methods or technologies that lead directly to the relevant website 

address. This paragraph (i)(4) does not apply to electronic versions of a 

Summary Prospectus that are filed on the EDGAR system. 

(5) Compliance with this paragraph (i) not a condition to reliance on paragraph (f) or 

(g) of this section. Compliance with this paragraph (i) is not a condition to the ability to rely on 



337 

paragraph (f) or (g) of this section with respect to a Contract, and failure to comply with this 

paragraph (i) does not negate the ability to rely on paragraph (f) or (g) of this section. 

(j) Portfolio Company Prospectuses –  

(1) Transfer of the Portfolio Company security. Any obligation under section 5(b)(2) of 

the Act to have a Statutory Prospectus precede or accompany the carrying or delivery of 

a Portfolio Company security is satisfied if, and information contained in the documents 

referenced in paragraph (j)(1)(ii) of this section is conveyed for purposes of § 230.159 when: 

(i) An Initial Summary Prospectus is used for each currently offered Contract described 

under the related registration statement; 

(ii) A summary prospectus is used for the Portfolio Company (if the Portfolio 

Company is registered on Form N-1A); and 

(iii) The current summary prospectus, Statutory Prospectus, Statement of Additional 

Information, and most recent annual and semi-annual reports to shareholders under § 270.30e-1 

of this chapter for the Portfolio Company are publicly accessible, free of charge, at the same 

website address referenced in paragraph (h)(1) of this section, and are accessible under 

the conditions set forth in paragraphs (h)(1), (h)(2)(i) and (ii), and (h)(3) and (4) of this section, 

with respect to the availability of documents relating to the Contract. 

(2) Communications. Any communication relating to a Portfolio Company (other than 

a prospectus permitted or required under section 10 of the Act) shall not be deemed 

a prospectus under section 2(a)(10) of the Act (15 U.S.C. 77b(a)(10)) if the conditions set forth 

in paragraph (j)(1) of this section are satisfied. 

(3) Other requirements. The materials referenced in paragraph (j)(1)(iii) of this section 

must be delivered upon request, presented, and able to be retained under the conditions set forth 



338 

in paragraphs (i)(1) and (3) of this section. Compliance with this paragraph (j)(3) is not a 

condition to the ability to rely on paragraph (j)(1) or (2) of this section, and failure to 

comply with this paragraph (j)(3) does not negate the ability to rely on paragraph (j)(1) or (2) of 

this section. 

PART 232— REGULATION S-T—GENERAL RULES AND REGULATIONS FOR 

ELECTRONIC FILINGS 

12. The general authority citation for part 232 continues to read as follows: 

Authority: 15 U.S.C. 77c, 77f, 77g, 77h, 77j, 77s(a), 77z-3, 77sss(a), 78c(b), 78l, 78m, 

78n, 78o(d), 78w(a), 78ll, 80a-6(c), 80a-8, 80a-29, 80a-30, 80a-37, 80b-4, 80b-6a, 80b-11, 7201 

et seq.; and 18 U.S.C. 1350, unless otherwise noted. 

* * * * * 

13. Amend §232.313 by revising paragraphs (a) and (b) to read as follows: 

§ 232.313 Identification of investment company type and series and/or class (or contract). 

(a) Registered investment companies, business development companies, and offerings of 

registered index-linked annuities must indicate their investment company type, based on whether 

the registrant's last effective registration statement or amendment (other than a merger/proxy 

filing on Form N-14 (§ 239.23 of this chapter) was filed on Form N-1 (§§ 239.15 and 274.11 of 

this chapter), Form N-1A (§§ 239.15A and 274.11A of this chapter), Form N-2 (§§ 239.14 and 

274.11a-1 of this chapter), Form N-3 (§§ 239.17A and 274.11b of this chapter), Form N-4 (§§ 

239.17b and 274.11c of this chapter), Form N-5 (§§ 239.24 and 274.5 of this chapter), Form N-6 

(§§ 239.17c and 274.11d of this chapter), Form S-1 (§ 239.11 of this chapter), Form S-3 (§ 

239.13 of this chapter), or Form S-6 (§ 239.16 of this chapter) in those EDGAR submissions 

identified in the EDGAR Filer Manual.  



339 

(b) Registered investment companies or offerings of registered index-linked annuities 

whose last effective registration statement or amendment (other than a merger/proxy filing on 

Form N-14 (§ 239.23 of this chapter) was filed on Form N-1A (§§ 239.15A and 274.11A of this 

chapter), Form N-3 (§§ 239.17A and 274.11b of this chapter), Form N-4 (§§ 239.17b and 

274.11c of this chapter), or Form N-6 (§§ 239.17c and 274.11d of this chapter) must, under the 

procedures set forth in the EDGAR Filer Manual:  

(1) Provide electronically, and keep current, information concerning their existing and 

new series and/or classes (or contracts, in the case of separate accounts), including series and/or 

class (contract) name and ticker symbol, if any, and be issued series and/or class (or contract) 

identification numbers;  

(2) Deactivate for EDGAR purposes any series and/or class (or contract, in the case of 

separate accounts) that are no longer offered, go out of existence, or deregister following the last 

filing for that series and/or class (or contract, in the case of separate accounts), but the registrant 

must not deactivate the last remaining series unless the registrant deregisters; and  

(3) For those EDGAR submissions identified in the EDGAR Filer Manual, include all 

series and/or class (or contract) identifiers of each series and/or class (or contract) on behalf of 

which the filing is made. 

* * * * *  

14. Amend §232.405 by revising paragraphs (a)(3)(i) introductory text, (a)(3)(ii), (b)(1) 

introductory text, (b)(2) introductory text, (b)(2)(iii), and the final sentence of Note 1 to the 

section to read as follows: 

§ 232.405 Interactive Data File Submissions. 

* * * * * 



340 

(a) *    *    * 

(3) *    *    * 

(i) If the electronic filer is not a management investment company registered under the 

Investment Company Act of 1940 (15 U.S.C. 80a et seq.), a separate account as defined in 

Section 2(a)(14) of the Securities Act (15 U.S.C. 77b(a)(14)) registered under the Investment 

Company Act of 1940, a registered index-linked annuity issuer as defined in Rule 405 under the 

Securities Act (17 CFR 232.405), a business development company as defined in Section 

2(a)(48) of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(48)), a unit investment 

trust as defined in Section 4(2) of the Investment Company Act of 1940 (15 U.S.C. 80a-4), or a 

clearing agency that provides a central matching service, and is not within one of the categories 

specified in paragraph (f)(1)(i) of this section, as partly embedded into a filing with the 

remainder simultaneously submitted as an exhibit to:  

*    *    *    *    * 

(ii) If the electronic filer is a management investment company registered under the 

Investment Company Act of 1940 (15 U.S.C. 80a et seq.), a separate account (as defined in 

Section 2(a)(14) of the Securities Act (15 U.S.C. 77b(a)(14)) registered under the Investment 

Company Act of 1940, a registered index-linked annuity issuer as defined in Rule 405 under the 

Securities Act (17 CFR 232.405), a business development company as defined in Section 

2(a)(48) of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(48)), a unit investment 

trust as defined in Section 4(2) of the Investment Company Act of 1940 (15 U.S.C. 80a-4), or a 

clearing agency that provides a central matching service, and is not within one of the categories 

specified in paragraph (f)(1)(ii) of this section, as partly embedded into a filing with the341 

remainder simultaneously submitted as an exhibit to a filing that contains the disclosure this 

section requires to be tagged; and 

*    *    *    *    * 

(b) *    *    * 

(1) If the electronic filer is not a management investment company registered under the 

Investment Company Act of 1940 (15 U.S.C. 80a et seq.), a separate account (as defined in 

Section 2(a)(14) of the Securities Act (15 U.S.C. 77b(a)(14)) registered under the Investment 

Company Act of 1940, a registered index-linked annuity issuer as defined in Rule 405 under the 

Securities Act (17 CFR 232.405), a business development company as defined in Section 

2(a)(48) of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(48)), a unit investment 

trust as defined in Section 4(2) of the Investment Company Act of 1940 (15 U.S.C. 80a-4), or a 

clearing agency that provides a central matching service, an Interactive Data File must consist of 

only a complete set of information for all periods required to be presented in the corresponding 

data in the Related Official Filing, no more and no less, from all of the following categories: 

*    *    *    *    * 

(2) If the electronic filer is an open-end management investment company registered 

under the Investment Company Act of 1940, a separate account (as defined in Section 2(a)(14) of 

the Securities Act) registered under the Investment Company Act of 1940 (15 U.S.C. 80a et 

seq.), a registered index-linked annuity issuer as defined in Rule 405 under the Securities Act (17 

CFR 232.405), a unit investment trust as defined in Section 4(2) of the Investment Company Act 

of 1940 (15 U.S.C. 80a-4), or a clearing agency that provides a central matching service, an 

Interactive Data File must consist of only a complete set of information for all periods required 



342 

to be presented in the corresponding data in the Related Official Filing, no more and no less, 

from the information set forth in: 

* * * * * 

(iii) Items 2(b)(2), 2(d), 3, 4, 5, 6(a) (instruction), 6(c)(1), 6(d), 7(e), 10, 17, 26(c), and 

31A of §§ 239.17b and 274.11c of this chapter (Form N-4); 

* * * * * 

Note 1 to § 232.405: *   *   *   For an issuer that is a management investment company or 

separate account registered under the Investment Company Act of 1940 (15 U.S.C. 80a et seq.), a 

registered index-linked annuity issuer as defined in Rule 405 under the Securities Act (17 CFR 

232.405), a business development company as defined in Section 2(a)(48) of the Investment 

Company Act of 1940 (15 U.S.C. 80a-2(a)(48)), or a unit investment trust as defined in Section 

4(2) of the Investment Company Act of 1940 (15 U.S.C. 80a-4), General Instruction C.3.(g) of 

Form N-1A, General Instruction I of Form N-2, General Instruction C.3.(h) of Form N-3, 

General Instruction C.3.(h) of Form N-4, General Instruction C.3.(h) of Form N-6, General 

Instruction 2.(l) of Form N-8B-2 (§ 274.12 of this chapter), General Instruction 5 of Form S-6, 

and General Instruction C.4 of Form N-CSR, as applicable, specifies the circumstances under 

which an Interactive Data File must be submitted. 

PART 239—FORMS PRESCRIBED UNDER THE SECURITIES ACT OF 1933 

15. The general authority citation for part 239 continues to read as follows: 

Authority: 15 U.S.C. 77c, 77f, 77g, 77h, 77j, 77s, 77z-2, 77z-3, 77sss, 78c, 

78l, 78m,78n, 78o(d), 78o-7 note, 78u-5, 78w(a), 78ll,78mm, 80a-2(a), 80a-3, 80a-8, 80a-9, 80a-

10, 80a-13, 80a-24, 80a-26, 80a-29, 80a-30, 80a-37; and sec. 71003 and sec. 84001, Pub. L. 114-

94, 129 Stat. 1321, unless otherwise noted. 

* * * * * 



343 

16. Revise Form N-4 (referenced in §§ 239.17b and 274.11c). 

Note: Form N-4 is attached as Appendix A to this document. Form N-4 does not appear in 

the Code of Federal Regulations. 

17. Amend Form N-6 (referenced in §§ 239.17c and 274.11d) by revising Instruction 3 to 

Item 30. 

Note: Form N-6 is attached as Appendix B to this document. Form N-6 will not appear in 

the Code of Federal Regulations. 

18. Add § 239.66 to read as follows: 

§ 239.66 Form 24F–2, annual filing of securities sold pursuant to registration of certain 

investment company securities and registered index-linked annuities. 

Form 24F–2 shall be used as the annual report filed by face amount certificate 

companies, open-end management companies, unit investment trusts, and registered index-linked 

annuities pursuant to §§ 230.456, § 230.457, or 270.24f-2 of this chapter for reporting securities 

sold during the fiscal year.  

19. Revise Form 24F-2 (referenced in §§ 239.66 and 274.24). 

Note: Form 24F-2 is attached as Appendix C to this document. Form 24F-2 will not appear 

in the Code of Federal Regulations. 

PART 274 — FORMS PRESCRIBED UNDER THE INVESTMENT COMPANY ACT OF 

1940 

20. The authority citation for part 274 continues to read as follows: 

Authority:  15 U.S.C. 77f, 77g, 77h, 77j, 77s, 78c(b), 78l, 78m, 78n, 78o(d), 80a-8, 

80a-24, 80a-26, 80a-29, and 80a-37, unless otherwise noted. 

* * * * * 



344 

21. Revise § 274.24 to read as follows: 

§ 274.24 Form 24F-2, annual filing of securities sold pursuant to registration of certain 

investment company securities and registered index-linked annuities. 

Form 24F-2 shall be used as the annual report filed by face amount certificate companies, 

open-end management companies, unit investment trusts, and registered index-linked annuities 

pursuant to §§ 230.456, 230.457, or 270.24f–2 of this chapter for reporting securities sold during 

the fiscal year. 

By the Commission. 

Dated: September 29, 2023. 

 

 

Vanessa Countryman 

Secretary. 

Note: The following appendices will not appear in the Code of Federal Regulations. 

  



 

Appendix A—Form N-4 

UNITED STATES 
SECURITIES AND EXCHANGE COMMISSION 

Washington, DC 20549 
 

FORM N-4 
 

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 

Pre-Effective Amendment No. _____  

Post-Effective Amendment No. _____  

and/or 

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 

Amendment No. _____  

(Check appropriate box or boxes.) 

__________________________________________________________________________ 
(Exact Name of Registered Separate Account) 

__________________________________________________________________________ 
(Name of Insurance Company) 

__________________________________________________________________________ 
(Address of Insurance Company’s Principal 

Executive Offices) 
(Zip Code) 

__________________________________________________________________________ 
(Insurance Company’s Telephone Number, including Area Code) 

__________________________________________________________________________ 
(Name and Address of Agent for Service) 

Approximate Date of Proposed Public Offering: __________________________________________ 
 

It is proposed that this filing will become effective (check appropriate box): 

 immediately upon filing pursuant to paragraph (b) 
 on (date) pursuant to paragraph (b) 
 60 days after filing pursuant to paragraph (a)(1) 
 on (date) pursuant to paragraph (a)(1) of rule 485 under the Securities Act. 

 

 



 
 

If appropriate, check the following box: 
 
 This post-effective amendment designates a new effective date for a previously filed post-

effective amendment. 

Check each box that appropriately characterizes the Registrant: 

 New Registrant (as applicable, a Registered Separate Account or Insurance Company that 
has not filed a Securities Act registration statement or amendment thereto within 3 years 
preceding this filing) 

 Emerging Growth Company (as defined by Rule 12b-2 under the Securities Exchange Act of 
1934 (“Exchange Act”)) 

 If an Emerging Growth Company, indicate by check mark if the Registrant has elected not 
to use the extended transition period for complying with any new or revised financial 
accounting standards provided pursuant to Section 7(a)(2)(B) of Securities Act. 

 Relying on Rule 12h-7 under the Exchange Act 
 

Omit from the facing sheet reference to the other Act if the registration statement or 
amendment is filed under only one of the Acts. Include the “Approximate Date of Proposed 
Public Offering” only where securities are being registered under the Securities Act of 1933. 

Form N-4 is to be used by (1) separate accounts that are unit investment trusts that 
offer variable annuity contracts to register under the Investment Company Act of 1940 and 
to offer their securities under the Securities Act of 1933, (2) insurance companies to 
register index-linked annuity contracts under the Securities Act of 1933, and (3) insurance 
companies to register annuity contracts that have any combination of these options under 
the applicable statutes. The Commission has designed Form N-4 to provide investors with 
information that will assist them in making a decision about investing in these contracts. 
The Commission also may use the information provided on Form N-4 in its regulatory, 
disclosure review, inspection, and policy making roles. 

A Registrant is required to disclose the information specified by Form N-4, and the 
Commission will make this information public. A Registrant is not required to respond to the 
collection of information contained in Form N-4 unless the Form displays a currently valid 
Office of Management and Budget (“OMB”) control number. Please direct comments 
concerning the accuracy of the information collection burden estimate and any suggestions 
for reducing the burden to Secretary, Securities and Exchange Commission, 100 F Street, 
N.E., Washington, DC  20549. The OMB has reviewed this collection of information under 
the clearance requirements of 44 U.S.C. § 3507.



  

CONTENTS OF FORM N-4 

GENERAL INSTRUCTIONS................................................................................................................................................................. iv 
A. Definitions........................................................................................................................................................................................ iv 
B. Filing and Use of Form N-4 .............................................................................................................................................................. v 
C. Preparation of the Registration Statement .................................................................................................................................... vi 
D. Incorporation by Reference ............................................................................................................................................................. x 

PART A - INFORMATION REQUIRED IN A PROSPECTUS .................................................................................................................... 1 
Item 1. Front and Back Cover Pages ....................................................................................................................................................... 1 
Item 2. Overview of the Contract ............................................................................................................................................................. 2 
Item 3. Key Information ............................................................................................................................................................................ 4 
Item 4. Fee Table ................................................................................................................................................................................... 10 
Item 5. Principal Risks of Investing in the Contract ............................................................................................................................. 14 
Item 6. Description of Insurance Company, Registered Separate Account, and Investment Options.............................................. 15 
Item 7. Charges ...................................................................................................................................................................................... 21 
Item 8. General Description of Contracts ............................................................................................................................................. 23 
Item 9. Annuity Period ........................................................................................................................................................................... 25 
Item 10. Benefits Available Under the Contract................................................................................................................................... 25 
Item 11. Purchases and Contract Value ............................................................................................................................................... 27 
Item 12. Surrenders and Withdrawals .................................................................................................................................................. 27 
Item 13. Loans ....................................................................................................................................................................................... 28 
Item 14. Taxes ....................................................................................................................................................................................... 29 
Item 15. Legal Proceedings ................................................................................................................................................................... 29 
Item 16. Financial Statements .............................................................................................................................................................. 29 
Item 17. Investment Options Available Under the Contract ................................................................................................................ 29 

PART B - INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION ................................................................... 35 
Item 18. Cover Page and Table of Contents ........................................................................................................................................ 35 
Item 19. General Information and History ............................................................................................................................................ 35 
Item 20. Non-Principal Risks of Investing in the Contract ................................................................................................................... 36 
Item 21. Services ................................................................................................................................................................................... 36 
Item 22. Purchase of Securities Being Offered .................................................................................................................................... 37 
Item 23. Underwriters ............................................................................................................................................................................ 38 
Item 24. Calculation of Performance Data ........................................................................................................................................... 39 
Item 25. Annuity Payments ................................................................................................................................................................... 41 
Item 26. Financial Statements .............................................................................................................................................................. 41 

PART C - OTHER INFORMATION ...................................................................................................................................................... 44 
Item 27. Exhibits .................................................................................................................................................................................... 44 
Item 28. Directors and Officers of the Insurance Company ................................................................................................................ 46 
Item 29. Persons Controlled by or Under Common Control with the Insurance Company or the Registered Separate Account ... 46 
Item 30. Indemnification ....................................................................................................................................................................... 46 
Item 31. Principal Underwriters ............................................................................................................................................................ 47 
Item 31A. Information about Contracts with Index-Linked Options .................................................................................................... 48 
Item 32. Location of Accounts and Records ........................................................................................................................................ 48 
Item 33. Management Services ............................................................................................................................................................ 48 
Item 34. Fee Representation and Undertakings .................................................................................................................................. 48 

SIGNATURES .................................................................................................................................................................................. 50 
 

  



  

GENERAL INSTRUCTIONS 

A. Definitions 

References to sections and rules in this Form N-4 are to the Investment Company Act of 1940 [15 
U.S.C. 80a-1 et seq.] (the “Investment Company Act”), unless otherwise indicated. Terms used in this Form 
N-4 have the same meaning as in the Investment Company Act or the related rules, unless otherwise 
indicated. As used in this Form N-4, the terms set out below have the following meanings: 

“Class” means a class of a Contract that varies principally with respect to distribution-related fees 
and expenses. 

“Contract” means any accumulation contract or annuity contract, any portion thereof, or any unit of 
interest or participation therein issued by an Insurance Company that offers Index-Linked Options, and/or 
Variable Options, and/or Fixed Options, as applicable, pursuant to the registration statement prepared on 
this Form. 

“Contract Adjustment” means a positive or negative adjustment made to the value of the Contract 
by the Insurance Company if amounts are withdrawn from an Index-Linked Option or from the Contract 
before the end of a specified period. This adjustment may be based on calculations using a predetermined 
formula, or a change in interest rates, or some other factor or benchmark. 

“Crediting Period” means the period of time over which an Index’s performance is measured, 
subject to applicable limits on Index gains and losses, to determine the amount of positive or negative 
interest that will be credited to an Index-Linked Option at the end of the period. 

“Fixed Option” means an Investment Option under the Contract pursuant to which the value of the 
Contract, either during an accumulation period or after annuitization, or both, will earn interest at a rate 
specified by the Insurance Company, subject to a minimum guaranteed rate under the Contract. 

“Index” or "Indexes" means any index, rate, or benchmark (such as a registered exchange-traded 
fund that tracks an index) used in the calculation of positive or negative interest credited to an Index-
Linked Option. 

 
“Index-Linked Option” means an Investment Option offered under any Contract, pursuant to which 

the value of the Contract, either during an accumulation period or after annuitization, or both, will earn 
positive or negative interest based, in part, on the performance of a specified Index. 

“Insurance Company” means the insurance company issuing the Contract, which company is 
subject to state supervision. The Insurance Company may be the depositor or sponsor of any Registered 
Separate Account in which the Contract participates. If there is more than one Insurance Company, the 
information called for in this Form about the Insurance Company shall be provided for each Insurance 
Company. 

“Investment Option” means a Fixed Option, an Index-Linked Option, and/or a Variable Option, as 
applicable. 

“Platform Charge” means any fee charged by the Insurance Company to make a Portfolio Company 
available in connection with a Variable Option under the Contract, and that varies solely on the basis of the 
Portfolio Company selected. 

“Portfolio Company” means any investment company in which the Registered Separate Account 
invests and which may be selected by the investor in connection with a Variable Option. 

“Registered Separate Account” means a separate account (as defined in section 2(a)(37) of the 



  

Investment Company Act [15 U.S.C. 80a-2(a)(37)]) in which the Contract participates with respect to 
Variable Options offered under the Contract. 

“Registrant” means, as applicable, a Registered Separate Account or the Insurance Company.  

“SAI” means the Statement of Additional Information required by Part B of this Form. 

“Securities Act” means the Securities Act of 1933 [15 U.S.C. 77a et seq.]. 

“Securities Exchange Act” means the Securities Exchange Act of 1934 [15 U.S.C. 78a et seq.]. 

“Statutory Prospectus” means a prospectus that satisfies the requirements of section 10(a) of the 
Securities Act [15 U.S.C. 77j(a)]. 

“Summary Prospectus” has the meaning provided by paragraph (a)(11) of rule 498A under the 
Securities Act [17 CFR 230.498A(a)(11)]. 

“Variable Option” means an Investment Option under any Contract pursuant to which the value of 
the Contract, either during an accumulation period or after annuitization, or both, varies according to the 
investment experience of a Portfolio Company. 

B. Filing and Use of Form N-4 

1. What is Form N-4 used for? 

Form N-4 is used by all separate accounts organized as unit investment trusts and offering 
Contracts with Variable Options and all Insurance Companies that offer Contracts with Variable 
Options and/or Index-Linked Options to file:  

(a) An initial registration statement under the Investment Company Act and any amendments to 
the registration statement; 

(b) An initial registration statement required under the Securities Act and any amendments to 
the registration statement, including amendments required by section 10(a)(3) of the 
Securities Act [15 U.S.C. 77j(a)(3)]; or  

(c) Any combination of the filings in paragraph (a) or (b). 

2. What is included in the registration statement? 

(a) For registration statements or amendments filed under both the Investment Company Act and the 
Securities Act or only under the Securities Act, include the facing sheet of the Form, Parts A, B, and 
C, and the required signatures. 

(b) For registration statements or amendments filed only under the Investment Company Act, include 
the facing sheet of the Form, responses to all Items of Parts A (except Items 1, 4, 5, 9, and 16), B, 
and C (except Items 27(c), (k), (l), and (m)), and the required signatures. 

3. What are the fees for Form N-4? 

No registration fees are required for a filing on Form N-4 to register as an investment company 
under the Investment Company Act or to register securities under the Securities Act. If a filing on 
Form N-4 is made to register securities under the Securities Act and securities are sold to the 
public, registration fees must be paid on an ongoing basis after the end of the Registrant’s fiscal 
year. See section 24(f) [15 U.S.C. 80a-24(f)] and rules 24f-2 [17 CFR 270.24f-2], 456 [17 CFR 
230.456], and 457 [17 CFR 230.457]. 



  

 

4. What rules apply to the filing of a registration statement on Form N-4? 

(a) For registration statements and amendments filed under both the Investment Company Act 
and the Securities Act or under only the Securities Act, the general rules under the Securities 
Act, particularly the rules regarding the filing of registration statements in Regulation C [17 
CFR 230.400 – 230.498A], apply to the filing of registration statements on Form N-4. 
Specific requirements concerning investment companies and registered index-linked 
annuities appear in rules 480 - 488 and 495 - 498A of Regulation C. 

(b) For registration statements and amendments filed only under the Investment Company Act, 
the general rules under the Investment Company Act, particularly the provisions in rules 8b-
1 – 8b-31 [17 CFR 270.8b-1 to 8b-31], apply to the filing of registration statements on Form 
N-4. 

(c) The plain English requirements of rule 421(d) under the Securities Act [17 CFR 230.421(d)] 
apply to prospectus disclosure in Part A of Form N-4. 

(d) Regulation S-T [17 CFR 232.10 – 232.501] applies to all filings on the Commission’s 
Electronic Data Gathering, Analysis, and Retrieval system (“EDGAR”). 

C. Preparation of the Registration Statement 

1. Administration of the Form N-4 Requirements 

(a) The requirements of Form N-4 are intended to promote effective communication between 
the Registrant and prospective investors. A Registrant’s prospectus should clearly disclose 
the fundamental features and risks of the Contracts, using concise, straightforward, and 
easy to understand language. A Registrant should use document design techniques that 
promote effective communication. 

(b) The prospectus disclosure requirements in Form N-4 are intended to elicit information for an 
average or typical investor who may not be sophisticated in legal or financial matters. The 
prospectus should help investors to evaluate the risks of an investment and to decide 
whether to invest in a Contract by providing a balanced disclosure of positive and negative 
factors. Disclosure in the prospectus should be designed to assist an investor in comparing 
and contrasting a Contract with other Contracts. 

(c) Responses to the Items in Form N-4 should be as simple and direct as reasonably possible 
and should include only as much information as is necessary to enable an average or typical 
investor to understand the particular characteristics of the Contracts. The prospectus should 
avoid including lengthy legal and technical discussions and simply restating legal or 
regulatory requirements to which Contracts generally are subject. Brevity is especially 
important in describing the practices or aspects of the Registrant’s operations that do not 
differ materially from those of other separate accounts or insurance companies. Avoid 
excessive detail, technical or legal terminology, and complex language, including the use of 
formulas as the primary means of communicating certain terms or features of the Contract. 
Also avoid lengthy sentences and paragraphs that may make the prospectus difficult for 
investors to understand and detract from its usefulness. 

(d) The requirements for prospectuses included in registration statements on Form N-4 will be 
administered by the Commission in a way that will allow variances in disclosure or 
presentation if appropriate for the circumstances involved while remaining consistent with 
the objectives of Form N-4. 



  

2. Form N-4 is divided into three parts: 

(a) Part A. Part A includes the information required in a Registrant’s prospectus under section 10(a) of 
the Securities Act. The purpose of the prospectus is to provide essential information about the 
Registrant and the Contracts in a way that will help investors to make informed decisions about 
whether to purchase the securities described in the prospectus. In responding to the Items in Part 
A, avoid cross-references to the SAI unless otherwise prescribed by the Form. Cross-references 
within the prospectus are most useful when their use assists investors in understanding the 
information presented and does not add complexity to the prospectus. 

(b) Part B. Part B includes the information required in a Registrant’s SAI. The purpose of the SAI is to 
provide additional information about the Registrant and the Contracts that the Commission has 
concluded is not necessary or appropriate in the public interest or for the protection of investors to 
be in the prospectus, but that some investors may find useful. Part B affords the Registrant an 
opportunity to expand discussions of the matters described in the prospectus by including 
additional information that the Registrant believes may be of interest to some investors. The 
Registrant should not duplicate in the SAI information that is provided in the prospectus, unless 
necessary to make the SAI comprehensible as a document independent of the prospectus. 

(c) Part C. Part C includes other information required in a Registrant’s registration statement. 

3. Additional Matters 

(a) Organization of Information. Organize the information in the prospectus and SAI to make it 
easy for investors to understand. Notwithstanding rule 421(a) under the Securities Act [17 
CFR 230.421(a)] regarding the order of information required in a prospectus, disclose the 
information required by Item 2 (Overview of the Contract), Item 3 (Key Information), and 
Item 4 (Fee Table) in numerical order at the front of the prospectus. Do not precede Items 2, 
3, and 4 with any other Item except the Cover Page (Item 1), a glossary, if any (General 
Instruction C.3.(d)), or a table of contents meeting the requirements of rule 481(c) under the 
Securities Act [17 CFR 230.481(c)].  

(b) Other Information. A Registrant may include, except in response to Items 2 and 3, 
information in the prospectus or the SAI that is not otherwise required so long as the 
information is not incomplete, inaccurate, or misleading and does not, because of its nature, 
quantity, or manner of presentation, obscure or impede understanding of the information 
that is required to be included. For example, Registrants are free to include in the 
prospectus financial statements required to be in the SAI, and may include in the SAI 
financial statements that may be placed in Part C. However, information regarding non-
principal risks that is not otherwise required to be in the prospectus must be disclosed in the 
SAI and not the prospectus, in accordance with Items 5 and 20. 

(c) Presentation of Information. To aid investor comprehension, Registrants are encouraged to 
use, as appropriate, question-and-answer formats, tables, side-by-side comparisons, 
captions, bullet points, numeric examples, illustrations or similar presentation methods. For 
example, such presentation methods would be appropriate when presenting disclosure for 
similar Contract features, prospectuses describing multiple Contracts, or the operation of 
optional benefits or annuitization. 

(d) Use of Terms. 

(i) Definitions. Define the special terms used in the prospectus (e.g., accumulation unit, 
participant, Crediting Period, etc.) in any presentation that clearly conveys meaning to 
investors. If the Registrant elects to include a glossary or list of definitions, only special 



  

terms used throughout the prospectus must be defined or listed. If a special term is 
used in only one section of the prospectus, it may be defined there (and need not be 
included in any glossary or list of definitions that the Registrant includes). 

(ii) Alternate Terminology. A Registrant may use alternate terminology other than that used 
in the form so long as the terminology used by the Registrant clearly conveys the 
meaning of, or provides comparable information as, the terminology included in the 
form. 

(e)  Use of Form N-4 to Register Multiple Contracts 

(i) A single prospectus may describe multiple Contracts that are essentially identical. 
Whether the prospectus describes Contracts that are “essentially identical” will depend 
on the facts and circumstances. For example, a Contract that does not offer optional 
benefits would not be essentially identical to one that does for a charge. Similarly, group 
and individual Contracts would not be essentially identical. However, Contracts that vary 
only due to state regulatory requirements would be essentially identical.  

(A) Paragraph (a) of General Instruction C.3 requires Registrants to disclose the 
information required by Items 2, 3, and 4 in numerical order at the front of the 
prospectus and generally not to precede the Items with other information. As a 
general matter, Registrants providing disclosure in a single prospectus for more 
than one Contract, may depart from the requirement of paragraph (a) as necessary 
to present the required information clearly and effectively (although the order of 
information required by each Item must remain the same). For example, the 
prospectus may present all of the Item 2 information for the Contracts, followed by 
all of the Item 3 information for several Contracts (e.g., by providing several Key 
Information Tables sequentially or by providing a single Key Information Table 
containing separate disclosures for each Contract to the extent that such 
disclosures would vary by Contract), and followed by all of the Item 4 information 
for the Contracts. Alternatively, the prospectus may present Items 2, 3, and 4 for 
each of several Contracts sequentially. Other presentations also would be 
acceptable if they are consistent with the Form’s intent to disclose the information 
required by Items 2, 3, and 4 in a standard order at the beginning of the 
prospectus. Registrants that present Items 2, 3, and 4 for each of several Contracts 
sequentially or that utilize another presentation should consider whether investors 
might benefit from a brief explanation about how the information in the prospectus 
is presented, such as headings for each contract in the prospectus’ table of 
contents and/or a brief narrative at the beginning of the prospectus explaining the 
presentation. Registrants are encouraged to present information in a manner that 
limits repetition. 

(B) The Registrant should generally include appropriate titles, headings, or any other 
information to promote clarity and facilitate understanding regarding which 
disclosures apply to which Contract, if such disclosures would vary based on the 
Contract. 

(ii) Multiple prospectuses may be combined in a single registration statement on Form N-4 
when the prospectuses describe Contracts that are substantially similar. For example, a 
Registrant could determine it is appropriate to include multiple prospectuses in a 
registration statement in the following situations: (i) the prospectuses describe the same 
Contract that is sold through different distribution channels; (ii) the prospectuses 
describe Contracts that differ only with respect to Portfolio Companies offered; or (iii) the 



  

prospectuses describe both the original and a modified version of the same Contract 
(where the “modified” version differs in the features or options that the Registrant offers 
under that Contract). 

(f) Dates. Rule 423 under the Securities Act [17 CFR 230.423] applies to the dates of the 
prospectus and the SAI. The SAI should be made available at the same time that the 
prospectus becomes available for purposes of rules 430 and 460 under the Securities Act 
[17 CFR 230.430 and 230.460]. 

(g) Sales Literature. A Registrant may include sales literature in the prospectus so long as the 
amount of this information does not add substantial length to the prospectus and its 
placement does not obscure essential disclosure. 

(h) Interactive Data File  

(i) An Interactive Data File (see rule 232.11 of Regulation S-T [17 CFR 232.11]) is required 
to be submitted to the Commission in the manner provided by rule 405 of Regulation S-T 
[17 CFR 232.405] for any registration statement or post-effective amendment thereto on 
Form N-4 that includes or amends information provided in response to Items 2(b)(2), 
2(d), 3, 4, 5, 6(a) (instruction), 6(c)(1), 6(d), 6(e), 7(e), 10, 17, 26(c), or 31A with regard 
to Contracts that are being sold to new investors.  

(A) Except as required by paragraph (h)(i)(B), the Interactive Data File must be 
submitted as an amendment to the registration statement to which the Interactive 
Data File relates. The amendment must be submitted on or before the date the 
registration statement or post-effective amendment that contains the related 
information becomes effective. 

(B) In the case of a post-effective amendment to a registration statement filed 
pursuant to paragraphs (b)(1)(i), (ii), (v), (vi), or (vii) of rule 485 under the Securities 
Act [17 CFR 230.485(b)], the Interactive Data File must be submitted either with 
the filing, or as an amendment to the registration statement to which the 
Interactive Data Filing relates that is submitted on or before the date the post-
effective amendment that contains the related information becomes effective. 

(ii) An Interactive Data File is required to be submitted to the Commission in the manner 
provided by rule 405 of Regulation S-T for any form of prospectus filed pursuant to 
paragraphs (c) or (e) of rule 497 under the Securities Act [17 CFR 230.497(c) or (e)] that 
includes information provided in response to Items 2(b)(2), 2(d), 3, 4, 5, 6(a) 
(instruction), 6(c)(1), 6(d), 6(e), 7(e), 10, 17, 26(c), or 31A that varies from the 
registration statement with regard to Contracts that are being sold to new investors. The 
Interactive Data File must be submitted with the filing made pursuant to rule 497. 

(iii) The Interactive Data File must be submitted in accordance with the specifications in the 
EDGAR Filer Manual, and in such a manner that will permit the information for each 
Contract, and, for any information that does not relate to all of the Classes in a filing, 
each Class of the Contract to be separately identified. 

(i) Website Addresses. Any website address included in an electronic version of the Statutory 
Prospectus must include an active hyperlink or other means of facilitating access that leads 
directly to the relevant website address. This requirement does not apply to an electronic 
Statutory Prospectus filed on the EDGAR system. 

D. Incorporation by Reference 



  

1. General Requirements   

All incorporation by reference must comply with the requirements of this Form and the following 
rules on incorporation by reference: rule 411 under the Securities Act [17 CFR 230.411] (general 
rules on incorporation by reference in a prospectus); rule 303 of Regulation S-T [17 CFR 232.303] 
(specific requirements for electronically filed documents); and rule 0-4 under the Investment 
Company Act [17 CFR 270.0-4] (additional rule on incorporation by reference for investment 
companies). In general, a Registrant may incorporate by reference, in the answer to any item of 
Form N-4 not required to be in the prospectus, any information elsewhere in the registration 
statement or in other statements, applications, or reports filed with the Commission. 

2. Specific Rules for Incorporation by Reference in Form N-4: 

(a) A Registrant may not incorporate by reference into a prospectus information that Part A of 
this Form requires to be included in a prospectus, except as specifically permitted by Part A 
of the Form. 

(b) A Registrant may incorporate by reference any or all of the SAI into the prospectus (but not 
to provide any information required by Part A to be included in the prospectus) without 
delivering the SAI with the prospectus. 

(c) A Registrant may incorporate by reference into the SAI or its response to Part C information 
that Parts B and C require to be included in the Registrant’s registration statement. 

 



 

 
PART A - INFORMATION REQUIRED IN A PROSPECTUS 

Item 1. Front and Back Cover Pages 

(a) Front Cover Page. Include the following information on the outside front cover page of the 
prospectus: 

(1) The Registered Separate Account’s name. 
 

(2) The Insurance Company’s name.  
 
(3) The types of Contracts offered by the prospectus (e.g., group, individual, single premium 

immediate, flexible premium deferred). 
 

(4) The name of the Contract and the Class or Classes, if any, to which the Contract relates.   
 
(5) The types of Investment Options offered under the Contract, and a cross-reference to the 

prospectus appendix providing additional information about each option. 
 
(6) A statement that the Contract is a complex investment and involves risks, including potential 

loss of principal. For Contracts with Index-Linked Options, prominently state that the Insurance 
Company limits the amount an investor can earn on an Index-Linked Option, the potential for 
investment loss could be significantly greater than the potential for investment gain, and an 
investor could lose a significant amount of money if the Index declines in value. Prominently 
disclose as a percentage the maximum amount of loss from negative Index performance that an 
investor could experience after taking into account the minimum guaranteed limit on Index loss 
provided under the Contract. 

 
(7) A statement that the Contract is not a short-term investment and is not appropriate for an 

investor who needs ready access to cash. Briefly state that withdrawals could result in 
surrender charges, negative Contract Adjustments, taxes, and tax penalties, as applicable. 
Prominently state as a percentage the maximum potential loss resulting from a negative 
Contract Adjustment, if applicable. 

 
(8) A statement that the Insurance Company’s obligations under the Contract are subject to its 

financial strength and claims-paying ability. 
 
(9) The date of the prospectus. 
 
(10) The statement required by rule 481(b)(1) under the Securities Act [17 CFR 230.481(b)(1)].  
 
(11) The statement that additional information about certain investment products, including [type of 

Contract], has been prepared by the Securities and Exchange Commission’s staff and is 
available at Investor.gov. 

(12) If applicable, the legend: “If you are a new investor in the Contract, you may cancel your 
Contract within 10 days of receiving it without paying fees or penalties[, although we will apply 
the Contract Adjustment]. In some states, this cancellation period may be longer. Upon 
cancellation, you will receive either a full refund of the amount you paid with your application or 
your total Contract value. You should review this prospectus, or consult with your investment 
professional, for additional information about the specific cancellation terms that apply.” 



 

Instruction. A Registrant may include on the front cover page any additional information, subject to the 
requirements of General Instruction C.3.(b) and (c). 

(b) Back Cover Page. Include the following information on the outside back cover page of the prospectus: 

(1) A statement that the SAI includes additional information about the Registrant. Explain that the SAI 
is available, without charge, upon request, and explain how investors may make inquiries about 
their Contracts. Provide a toll-free (or collect) telephone number for investors to call to request the 
SAI, to request other information about the Contracts, and to make investor inquiries.  

Instructions. 

1. A Registrant may indicate, if applicable, that the SAI and other information are available on its 
website and/or by email request. 

2. A Registrant may indicate, if applicable, that the SAI and other information are available from 
an insurance agent or financial intermediary (such as a broker-dealer or bank) through which 
the Contracts may be purchased or sold. 

3. When a Registrant (or an insurance agent or financial intermediary through which Contracts 
may be purchased or sold) receives a request for the SAI, the Registrant (or insurance agent 
or financial intermediary) must send the SAI within 3 business days of receipt of the request, 
by first-class mail or other means designed to ensure equally prompt delivery. 

(2) A statement whether and from where information is incorporated by reference into the prospectus 
as permitted by General Instruction D. Unless the information is delivered with the prospectus, 
explain that the Registrant will provide the information without charge, upon request (referring to 
the telephone number provided in response to paragraph (b)(1)).  

Instruction. The Registrant may combine the information about incorporation by reference with the 
statements required under paragraph (b)(1). 

(3) A statement that reports and other information about the Registered Separate Account are 
available on the Commission’s website at http://www.sec.gov, and that copies of this information 
may be obtained, upon payment of a duplicating fee, by electronic request at the following email 
address: [email protected]. 

 
(4) The EDGAR contract identifier for the Contract on the bottom of the back cover page in type size 

smaller than that generally used in the prospectus (e.g., 8-point modern type). 
 

Item 2. Overview of the Contract 

Provide a concise description of the Contract including the following information: 

(a) Purpose. Briefly describe the purpose(s) of the Contract (e.g., to help the investor accumulate assets 
through an investment portfolio, to provide or supplement the investor’s retirement income, to 
provide death and/or other benefits). State for whom the Contract may be appropriate (e.g., by 
discussing a representative investor’s time horizon, liquidity needs, and financial goals).  

(b) Phases of Contract. Briefly describe the accumulation (savings) phase and annuity (income) phase of 
the Contract. 

(1) This discussion should include a brief overview of the Investment Options available under the 
Contract. 

http://www.sec.gov/
mailto:[email protected]


 

Instructions. 

1. Prominently disclose that additional information about each Investment Option is provided in 
an appendix to the prospectus and provide a cross-reference to the appendix. 

2. A detailed explanation of the Registered Separate Account, Portfolio Companies, Indexes, and 
Investment Options is not necessary and should be avoided. 

(2) With respect to any Index-Linked Option currently offered under the Contract, include the 
following information. 

(i) State that the Insurance Company will credit positive or negative interest at the end of a 
Crediting Period to amounts allocated to an Index-Linked Option based, in part, on the 
performance of the Index.  

(ii) Disclose that an investor could lose a significant amount of money if the Index declines in 
value.  

Instruction. Prominently state as a percentage the maximum amount of loss an investor 
could experience from negative Index performance, after taking into account the minimum 
guaranteed limit on Index loss provided under the Contract. 

(iii) Briefly explain that the Insurance Company limits the negative Index return used in 
calculating interest credited to an Index-Linked Option at the end of its Crediting Period. 
Briefly describe the manner(s) in which the Insurance Company limits negative returns 
through the use of a floor, buffer, or some other rate or measure. Provide an example of 
how such rate could operate to limit a negative Index return (e.g., “if the Index return is -
25% and the buffer rate is -10%, we will credit -15% (the amount that exceeds the buffer 
rate) at the end of the Crediting Period, meaning your Contract value will decrease by 
15%”). Disclose the minimum limit on Index losses guaranteed for the life of the Contract 
for any Index-Linked Option. 

(iv) Briefly explain that the Insurance Company limits the positive Index return used in 
calculating interest credited to an Index-Linked Option at the end of its Crediting Period. 
Briefly describe the manner(s) in which the Insurance Company limits positive returns 
through the use of a cap, participation rate, or some other rate or measure. Provide an 
example of how such rate could operate to limit a positive Index return (e.g., “if the Index 
return is 12% and the cap rate is 4%, we will credit 4% in interest at the end of the 
Crediting Period, meaning your Contract value will increase by 4%”). Disclose the minimum 
limit on Index gains guaranteed for the life of the Contract for any Index-Linked Option. 

(3) State, if applicable, that if an investor annuitizes, the investor will receive a stream of income 
payments, however (i) the investor will be unable to make withdrawals, and (ii) death benefits and 
living benefits will terminate. 

(c) Contract Features. Summarize the Contract’s primary features, including death benefits, withdrawal 
options, loan provisions, and Contract benefits. If applicable, state that the investor will incur an 
additional fee for selecting a particular benefit. 

(d) Contract Adjustment. If applicable, state that an investor could lose a significant amount of money 
due to the Contract Adjustment if amounts are removed from an Index-Linked Option or from the 
Contract prior to the end of a specified period. Briefly describe the transactions subject to the 
Contract Adjustment. 



 

Instruction. Prominently state as a percentage the maximum amount of loss an investor could 
experience from a negative Contract Adjustment. State that this loss could be greater due to 
surrender charges and tax consequences. 

Item 3. Key Information 

Include the following information: 

Important Information You Should Consider About the [Contract] 

FEES AND EXPENSES 

Are There Charges for Early 
Withdrawals? 

 

Are There Transaction 
Charges? 

 

Are There Ongoing Fees and 
Expenses? 

 

RISKS 

Is There a Risk of Loss From 
Poor Performance? 

 

Is this a Short-Term 
Investment? 

 

What are the Risks 
Associated with the 
Investment Options? 

  

Is There Any Chance the 
Insurance Company Won’t 
Pay Amounts Due to Me 
Under the Contract? 

 

RESTRICTIONS 

Are There Restrictions on the 
Investment Options? 

 

Are there any Restrictions on 
Contract Benefits? 

 

TAXES 

What are the Contract’s Tax 
Implications? 

 



 

CONFLICTS OF INTEREST 

How are Investment 
Professionals Compensated? 

 

Should I Exchange My 
Contract? 

 

  
Instructions. 

1. General. 

(a) Disclose the required information in the tabular presentation(s) reflected herein, in the order 
specified. A Registrant may exclude any disclosures that are not applicable, or modify any of 
the statements required to be included, so long as the modified statement contains 
comparable information. Notwithstanding this instruction and General Instruction C.3.(d)(ii), 
the title, headings, and sub-headings for this tabular presentation may not be modified or 
substituted with alternate terminology unless otherwise provided. 

(b) Provide cross-references to the location in the Statutory Prospectus where the subject matter 
is described in greater detail. Cross-references in electronic versions of the Summary 
Prospectus and/or Statutory Prospectus should link directly to the location in the Statutory 
Prospectus where the subject matter is discussed in greater detail, or should provide a means 
of facilitating access to that information through equivalent methods or technologies. The 
cross-reference should be adjacent to the relevant disclosure, either within the table row, or 
presented in an additional table column. 

(c) All disclosures provided in response to this Item should be short and succinct, consistent with 
the limitations of a tabular presentation. 

(d) All disclosures provided in this tabular presentation also must be presented in a question and 
answer format. Unless the context otherwise requires, when answering a question presented 
on a given row of the table, begin the response with “Yes” or “No” in bold text. 

2. Fees and Expenses. 

(a) Are There Charges for Early Withdrawals? Include a statement that if the investor withdraws 
money from the Contract within [x] years following the investor’s last purchase payment, the 
investor will be assessed a surrender charge. Include in this statement the maximum 
surrender charge (as a percentage of [purchase payment or amount surrendered]), and the 
maximum number of years that a surrender charge may be assessed since the last purchase 
payment under the Contract. Provide an example of the maximum surrender charge an 
investor could pay (in dollars) under the Contract assuming a $100,000 investment (e.g., “[i]f 
you make an early withdrawal, you could pay a surrender charge of up to $9,000 on a 
$100,000 investment. This loss will be greater if there is a negative Contract Adjustment, 
taxes, or tax penalties.”). 

If applicable, include a statement that if all or a portion of account value is removed from an 
Index-Linked Option or from the Contract before the expiration of a specified period, the 
Insurance Company will apply a Contract Adjustment, which may be negative. Include in this 
statement the maximum potential loss (as a percentage of the investment) resulting from a 
negative adjustment (e.g., “[y]ou could lose up to XX% of your investment due to the contract 



 

adjustment”). Provide an example of the maximum negative adjustment that could be applied 
(in dollars) assuming a $100,000 investment (e.g., “[i]f you allocate $100,000 to an 
investment option with a 3-year Crediting Period and later withdraw the entire amount before 
the 3 years have ended, you could lose up to $90,000 of your investment. This loss will be 
greater if you also have to pay a surrender charge, taxes, and tax penalties.”). Provide a brief 
narrative description of the Contract transactions subject to the Contract Adjustment (e.g., 
withdrawals, surrender, annuitization, etc.). 

(b) Are There Transaction Charges? State that in addition to surrender charges and Contract 
Adjustments (if applicable), the investor may also be charged for other transactions, and 
provide a brief narrative description of the types of such charges (e.g., front-end loads, 
charges for transferring cash value between Investment Options, charges for wire transfers, 
etc.). 

(c) Are There Ongoing Fees and Expenses? 

Include the following information, in the order specified: 
(i) Minimum and Maximum Annual Fee Table. 

 
(A) The legend: “The table below describes the fees and expenses that you may pay each 

year, depending on the Investment Options and optional benefits you choose. Please 
refer to your Contract specifications page for information about the specific fees you 
will pay each year based on the options you have elected.” 

(B) Provide Minimum and Maximum Annual Fees in substantially the following tabular 
format, in the order specified. 

 

  
(C) Explain, in a parenthetical or footnote to the table or each caption, the basis for each 

percentage (e.g., % of separate account value or benefit base, or % of net asset value).  
 

(D) Calculate Base Contract fees by dividing the total amount of Base Contract fees 
(including dollar-based Contract expenses) collected during the year that are 
attributable to the Contract by the total average net assets that are attributable to the 
Contract. 

 
(E) If the Insurance Company offers multiple Portfolio Companies under the Contract, it 

should disclose the minimum and maximum “Annual Portfolio Company Expenses” 
calculated in accordance with Item 3 of Form N-1A [17 CFR §§ 239.15A and 274.11A] 
(before expense reimbursements or fee waiver arrangements). If the Insurance 
Company charges a Platform Charge to make any of the Portfolio Companies available 
as investment options under the Contract, the Insurance Company should include the 
maximum Platform Charge associated with each Portfolio Company when calculating 
minimum and maximum Annual Portfolio Company Expenses. 

Annual Fee Minimum Maximum  
Base Contract 
(varies by Contract Class) 

[ ]% [ ]% 

Portfolio Company fees and expenses [ ]% [ ]% 
Optional benefits available for an 
additional charge 
(for a single optional benefit, if 
elected)  

[ ]% [ ]% 

https://www.law.cornell.edu/cfr/text/17/239.15A(F) The Minimum Annual Fee means the lowest current fee for each annual fee category 

(i.e., the least expensive Contract Class, the lowest Portfolio Company Total Annual 
Operating Expenses, and the least expensive optional benefit available for an 
additional charge). The Maximum Annual Fee means the highest current fee for each 
annual fee category (i.e., the most expensive Contract Class, the highest Portfolio 
Company Total Annual Operating Expenses, and the most expensive optional benefit 
available for an additional charge).  
 

(G) For Contracts that offer Index-Linked Options and impose ongoing fees and expenses 
on the Index-Linked Options, Variable Options, and/or Fixed Options, precede the table 
with a prominent statement explaining that: (1) there is an implicit ongoing fee on 
Index-Linked Options by the Insurance Company limiting, through the use of a cap, 
participation rate, or some other rate or measure, the amount an investor can earn on 
an Index-Linked Option; (2) imposing this limit helps the Insurance Company make a 
profit on the Index-Linked Option; and (3) in return for accepting this limit on Index 
gains, an investor will receive some protection from Index losses. 
 

(ii) Lowest and Highest Annual Cost Table. 

(A) The legend: “Because your Contract is customizable, the choices you make affect how 
much you will pay. To help you understand the cost of owning your Contract, the 
following table shows the lowest and highest cost you could pay each year, based on 
current charges. This estimate assumes that you do not take withdrawals from the 
Contract, which could add surrender charges and negative Contract Adjustments that 
substantially increase costs.” 

(B) Provide Lowest and Highest Annual Costs in substantially the following tabular format, 
in the order specified. 

 
Lowest Annual Cost: 

$[ ] 
Highest Annual Cost: 

$[ ] 
Assumes: 
 

• Investment of $100,000 
• 5% annual appreciation  
• Least expensive combination 

of Contract Classes and 
Portfolio Company fees and 
expenses 

• No optional benefits 
• No sales charges    
• No additional purchase 

payments, transfers or 
withdrawals 

 

Assumes: 
 

• Investment of $100,000 
• 5% annual appreciation 
• Most expensive combination 

of Contract Classes, optional 
benefits, and Portfolio 
Company fees and expenses 

• No sales charges   
• No additional purchase 

payments, transfers or 
withdrawals 

  
(C) Calculate the Lowest and Highest Annual Cost estimates in the following manner: 

 
a. Calculate the dollar amount of fees that would be assessed based on the 

assumptions described in the table above for each of the first 10 Contract years.   
 



 

b. Total each year’s fees (discounted to the present value using a 5% annual discount 
rate) and divide by 10 to calculate the estimated dollar amounts that are required 
to be set forth in the table above. 
 

c. Sales loads, other than ongoing sales charges, should be excluded from the Lowest 
and Highest Annual Cost estimates. 
 

d. Amounts of any bonus payment should be excluded from the Lowest and Highest 
Annual Cost estimates. 

 
e. Unless otherwise provided, the least and most expensive combination of Contract 

Classes, Portfolio Company fees and expenses, and optional benefits should be 
based on the disclosures provided in the Example in Item 4. If a different 
combination of Contract Classes, Annual Portfolio Company Expenses, and/or 
optional benefits would result in different Minimum or Maximum fees in different 
years, use the least expensive and most expensive combination of Contract 
Classes, Annual Portfolio Company Expenses, and optional benefits each year. 

 
(iii) For Contracts that offer Index-Linked Options and that do not impose any ongoing fees and 

expenses under the Contract, prominently state, in lieu of the disclosure required by 
Instructions 2(c)(i) and (ii), that (1) there is an implicit ongoing fee on Index-Linked Options 
by the Insurance Company limiting, through the use of a cap, participation rate, or some 
other rate or measure, the amount an investor can earn on an Index-Linked Option; (2) 
imposing this limit helps the Insurance Company make a profit on the Index-Linked 
Options; and (3) in return for accepting this limit on Index gains, an investor will receive 
some protection from Index losses. 

 
3. Risks. 

 
(a) Is There a Risk of Loss From Poor Performance? State that an investor can lose money by 

investing in the Contract. For a Contract with Index-Linked Options, prominently state as a 
percentage the maximum amount of loss an investor could experience from negative Index 
performance, after taking into account the minimum guaranteed limit on Index loss provided 
under the Contract. 
 

(b) Is This a Short-Term Investment? State that a Contract is not a short-term investment and is 
not appropriate for an investor who needs ready access to cash, accompanied by a brief 
explanation. State that amounts withdrawn from the Contract may result in surrender charges, 
taxes, and tax penalties. If applicable, state that amounts removed from an Index-Linked 
Option or from the Contract before the end of a specified period may also result in a negative 
Contract Adjustment and loss of positive Index performance. 

 
For Index-Linked Options, state that Contract value will be reallocated at the end of the 
Crediting Period according to the investor’s instructions, and disclose the default reallocation 
in the absence of such instructions. 
 

(c) What are the Risks Associated with the Investment Options? State that an investment in the 
Contract is subject to the risk of poor investment performance and can vary depending on the 
performance of the Investment Options available under the Contract (e.g., Portfolio 
Companies, if a Variable Option, or the Index, if an Index-Linked Option), that each Investment 
Option (including any Fixed Option) will have its own unique risks, and that the investor should 
review the available Investment Options before making an investment decision. For Index-



 

Linked Options, also state that: 
 

(A) The cap, participation rate, or some other rate or measure, as applicable, will limit positive 
Index returns (e.g., limited upside). Provide an example for each type of limit imposed 
under the Contract (e.g., “if the Index return is 12% and the cap rate is 4%, we will credit 
4% in interest at the end of the Crediting Period”), and prominently state that this may 
result in the investor earning less than the Index return; and 

 
(B) The floor, buffer, or some other rate or measure, as applicable, will limit negative Index 

returns (e.g., limited protection in the case of market decline). Provide an example for 
each type of limit imposed under the Contract (e.g., “if the Index return is -25% and the 
buffer rate is -10%, we will credit -15% (the amount that exceeds the buffer rate) at the 
end of the Crediting Period”), and prominently state that even after limiting a negative 
Index return, the investor could still lose up to XX% of their investment. 

 
(d) Is There Any Chance the Insurance Company Won’t Pay Amounts Due to Me Under the 

Contract? State that an investment in the Contract is subject to the risks related to the 
Insurance Company, including that any obligations (including under any Fixed Options and 
Index-Linked Options), guarantees, or benefits are subject to the claims-paying ability of the 
Insurance Company. Further state that more information about the Insurance Company, 
including if applicable its financial strength ratings, is available upon request, and indicate 
how such requests can be made (e.g., via toll-free telephone number). 
 

Instruction. A Registrant may include the Insurance Company’s financial strength rating(s) and 
omit the portion of the disclosures regarding the availability of the Insurance Company’s financial 
strength ratings specified by the last sentence of Instruction 3.(d). 

4. Restrictions. 
 

(a) Are There Limits on the Investment Options? State whether there are any restrictions that may 
limit the Investment Options that an investor may choose, as well as any limitations on the 
transfer of Contract value among Investment Options. State any reservation of rights by the 
Insurance Company or the Registered Separate Account under the Contract, including if 
applicable, the right to remove or substitute Portfolio Companies, add or remove Index-Linked 
Options and change the features of an Index-Linked Option from one Crediting Period to the 
next, including the Index and the current limits on Index gains and losses (subject to 
contractual minimum guarantees), substitute the Index of an Index-Linked Option during its 
Crediting Period, and stop accepting additional purchase payments. 
 

(b) Are There Any Restrictions on Contract Benefits? State whether there are any restrictions or 
limitations relating to benefits offered under the Contract (e.g., death benefits, living benefits, 
Contract loans, performance “locks” relating to the Contract Adjustment, etc.), and/or whether 
a benefit may be modified or terminated by the Insurance Company. If applicable, state that 
withdrawals that exceed limits specified by the terms of a Contract benefit may affect the 
availability of the benefit by reducing the benefit by an amount greater than the value 
withdrawn, and/or could terminate the benefit. 

 
5. Taxes—What are the Contract’s Tax Implications? State that an investor should consult with a tax 

professional to determine the tax implications of an investment in and purchase payments 
received under the Contract, and that there is no additional tax benefit to the investor if the 
Contract is purchased through a tax-qualified plan or individual retirement account (IRA). Explain 
that withdrawals will be subject to ordinary income tax and may be subject to tax penalties. 
 



 

6. Conflicts of Interest. 
 
(a) How Are Investment Professionals Compensated? State that some investment professionals 

may receive compensation for selling the Contract to investors, and briefly describe the basis 
upon which such compensation is typically paid (e.g., commissions, revenue sharing, 
compensation from affiliates and third parties). State that these investment professionals may 
have a financial incentive to offer or recommend the Contract over another investment. 
 

(b) Should I Exchange my Contract? State that some investment professionals may have a 
financial incentive to offer an investor a new contract in place of the one the investor already 
owns, and that an investor should only exchange their contract if the investor determines, 
after comparing the features, fees, and risks of both contracts, and any fees or penalties to 
terminate the existing contract, that it is preferable for the investor to purchase the new 
contract rather than continue to own the existing contract. 

Instruction. A Registrant may omit these line-items if neither the Registrant nor any of its related 
companies pay financial intermediaries for the sale of the Contract or related services. 

Item 4. Fee Table 

Include the following information: 

The following tables describe the fees and expenses that you will pay when buying, owning, and 
surrendering or making withdrawals from an Investment Option or from the Contract. Please refer to your 
Contract specifications page for information about the specific fees you will pay each year based on the 
options you have elected. 

The first table describes the fees and expenses that you will pay at the time that you buy the Contract, 
surrender or make withdrawals from an Investment Option or from the Contract, or transfer Contract 
value between Investment Options. State premium taxes may also be deducted. 

Transaction Expenses 

 Sales Load Imposed on Purchases (as a percentage of purchase payments) __% 

 Deferred Sales Load (or Surrender Charge) (as a percentage of purchase 
payments or amount surrendered, as applicable) 

__% 

 Transfer Fee __% 

 Contract Adjustment Maximum Potential Loss (as a percentage of Contract 
value at the start of the Crediting Period or amount withdrawn, as applicable ) 

__% 

The next table describes the fees and expenses that you will pay each year during the time that you own 
the Contract (not including Portfolio Company fees and expenses). 

If you choose to purchase an optional benefit, you will pay additional charges, as shown below. 

Annual Contract Expenses 

 Administrative Expenses $__ 



 

Annual Contract Expenses 

 Base Contract Expenses (as a percentage of average account value or 
Contract value)  

__% 

 Optional Benefit Expenses (as a percentage of benefit base or other (e.g., 
average account value))   

__% 

 In addition to the fees described above, we limit the amount you can earn on an 
Index-Linked Option. Imposing this limit helps us make a profit on the Index-
Linked Option. In return for accepting this limit on Index gains, you will receive 
some protection from Index losses. 

 

The next item shows the minimum and maximum total operating expenses charged by the Portfolio 
Companies that you may pay periodically during the time that you own the Contract. Expenses shown 
may change over time and may be higher or lower in the future. These amounts also include applicable 
Platform Charges if you choose to invest in certain Portfolio Companies. A complete list of Portfolio 
Companies available under the Contract, including their annual expenses, may be found at the back of 
this document. 

Annual Portfolio Company Expenses Minimum Maximum 

 (expenses that are deducted from Portfolio Company assets, 
including management fees, distribution and/or service 
(12b-1) fees, and other expenses) 

__% __% 

 
Example 

This Example is intended to help you compare the cost of investing in the Variable Options with the cost 
of investing in other annuity contracts that offer variable options. These costs include transaction 
expenses, annual Contract expenses, and Annual Portfolio Company Expenses.  

The Example assumes all Contract value is allocated to the Variable Options. The Example does not 
reflect the Contract Adjustment. Your costs could differ from those shown below if you invest in Index-
Linked Options or Fixed Options. 

The Example assumes that you invest $100,000 in the Variable Options for the time periods indicated. 
The Example also assumes that your investment has a 5% return each year and assumes the most 
expensive combination of Annual Portfolio Company Expenses and optional benefits available for an 
additional charge. Although your actual costs may be higher or lower, based on these assumptions, your 
costs would be: 

If you surrender your 
Contract at the end of 
the applicable time 
period: 

 1 year 

 

$___ 

3 years 

 

$___ 

5 years 

 

$___ 

10 years 

 

$___ 

If you annuitize at the 
end of the applicable 

 1 year 3 years 5 years 10 years 



 

If you surrender your 
Contract at the end of 
the applicable time 
period: 

 1 year 

 

$___ 

3 years 

 

$___ 

5 years 

 

$___ 

10 years 

 

$___ 

time period:  

$___ 

 

$___ 

 

$___ 

 

$___ 

If you do not 
surrender your 
Contract: 

 1 year 

 

$___ 

3 years 

 

$___ 

5 years 

 

$___ 

10 years 

 

$___ 

Instructions 

1. Include the narrative explanations in the order indicated. A Registrant may modify a narrative 
explanation if the explanation contains comparable information to that shown, and may omit a 
narrative explanation that is not applicable under the Contract. 

2. Assume that the Contract is owned during the accumulation period for purposes of the table 
(including the Example). If an annuitant would pay different fees or be subject to different 
expenses, disclose this in a brief narrative and provide a cross-reference to those portions of the 
prospectus describing these fees. 

3. A Registrant may omit captions if the Registrant does not charge or reserve the right to charge the 
fees or expenses covered by the captions. 

4. Round all dollar figures to the nearest dollar and all percentages to the nearest hundredth of one 
percent. 

5. In the Transaction Expenses and Annual Contract Expenses tables, the Registrant must disclose 
the maximum guaranteed charge, unless a specific instruction directs otherwise. If a fee other 
than a Contract Adjustment is calculated based on a benchmark (e.g., a fee that varies according 
to volatility levels or Treasury yields), the Registrant must also disclose the maximum guaranteed 
charge as a single number. The Registrant may disclose the current charge, in addition to the 
maximum charge, if the disclosure of the current charge is no more prominent than, and does not 
obscure or impede understanding of, the disclosure of the maximum charge. In addition, the 
Registrant may include in a footnote to the table a tabular, narrative, or other presentation 
providing further detail regarding variations in the charge. For example, if deferred sales charges 
decline over time, the Registrant may include in a footnote a presentation regarding the 
scheduled reductions in the deferred sales charges. 

6. Provide a separate fee table (or separate column within the table) for each Contract offered by 
the prospectus that has different fees.  

7. For a Contract with more than one Class, provide a separate response for each Class.  

Transaction Expenses 

8. “Sales Load Imposed on Purchases” includes the maximum sales load imposed upon purchase 



 

payments and may include a tabular presentation, within the larger table, of the range of such 
sales loads. 

9. “Deferred Sales Load” includes the maximum contingent deferred sales load (or surrender 
charge), expressed as a percentage of the original purchase price or amount surrendered, and 
may include a tabular presentation, within the larger table, of the range of contingent deferred 
sales loads over time. 

10. “Transfer Fee” includes the maximum fee charged for any exchange or transfer of Contract value 
between Investment Options or from the Registered Separate Account to another investment 
company or from the Registered Separate Account to the insurance company’s general account. 
The Registrant may include a tabular presentation of the range of transfer fees unless such a 
presentation would be so lengthy as to encumber the larger table, in which case the Registrant 
should only provide a cross-reference to the narrative portion of the prospectus discussing the 
transfer fee. 

11. “Contract Adjustment Maximum Potential Loss” includes the maximum negative Contract 
Adjustment that may be imposed, expressed as a percentage of Contract value at the start of the 
Crediting Period or of the amount withdrawn, as applicable. The Registrant should list in a 
footnote the Contract transactions subject to a Contract Adjustment. 

12. If the Registrant (or any other party pursuant to an agreement with the Registrant) charges any 
other transaction fee, add another caption describing it and list the (maximum) amount or basis 
on which the fee is deducted. 

Annual Contract Expenses 

13. Administrative Expenses include any Contract, account, or similar fee imposed on a dollar basis 
and charged on any recurring basis (e.g., $50 per year). 

14. Base Contract Expenses include mortality and expense risk fees and account fees and expenses. 
Account fees and expenses include all fees and expenses charged to any Investment Option 
(except sales loads, mortality and expense risk fees, and optional benefits expenses) that are 
deducted on a percentage basis. 

15. Optional Benefits Expenses include any optional features (e.g., enhanced death benefits and 
living benefits) offered under the Contract for an additional charge. 

16. If the Registrant (or any other party pursuant to an agreement with the Registrant) imposes any 
other recurring charge (other than Annual Portfolio Company Expenses), add another caption 
describing it and list the (maximum) amount or basis on which the charge is deducted. 

Annual Portfolio Company Expenses 

17. If a Registrant offers multiple Portfolio Companies, it should disclose the minimum and maximum 
“Annual Portfolio Company Expenses” for any Portfolio Company calculated in accordance with 
Item 3 of Form N-1A [17 CFR §§ 239.15A and 274.11A (before expense reimbursements or fee 
waiver arrangements). If the Insurance Company charges a Platform Charge to make any of the 
Portfolio Companies available as investment options under the Contract, the Registrant should 
include the maximum Platform Charge associated with each Portfolio Company when calculating 
minimum and maximum Annual Portfolio Company Expenses. 

18. A Registrant may also reflect, in an additional line-item to the range of Annual Portfolio Company 
Expenses, minimum and maximum Annual Portfolio Company Expenses calculated in accordance 

https://www.law.cornell.edu/cfr/text/17/239.15A


 

with Item 3 of Form N-1A that include expense reimbursements or fee waiver arrangements that 
are in place and reflected in the Portfolio Company’s registration statement pursuant to Item 3 of 
Form N-1A. If the Registrant provides this disclosure, also disclose the period for which the 
expense reimbursements or fee waiver arrangement is expected to continue, and, if applicable, 
that it can be terminated at any time at the option of a Portfolio Company. If the Registrant 
charges a Platform Charge to make any of the Portfolio Companies available as investment 
options under the Contract, the Registrant should include the current Platform Charge associated 
with each Portfolio Company when calculating minimum and maximum Annual Portfolio Company 
Expenses that include expense reimbursements or fee waiver arrangements. 

Example 

19. For purposes of the Example(s) in the table, provide the following for each Variable Option 
Contract Class: 

(a) Assume that the percentage amounts listed under “Annual Contract Expenses” remain the 
same in each year of the 1-, 3-, 5-, and 10-year periods;  

(b) The most expensive combination of Contract features must be shown first. Additional expense 
presentations are permitted, but not required; 

(c) Assume the maximum sales load that may be deducted from purchase payments is deducted; 

(d) For any breakpoint in any fee, assume that the amount of Variable Option (and Portfolio 
Company) assets remains constant as of the level at the end of the most recently completed 
fiscal year; 

(e) Assume no exchanges or other transactions; 

(f) Reflect any Contract expenses by dividing the total amount of Contract expenses (including 
dollar-based Contract expenses) collected during the year that are attributable to the Contract 
by the total average net assets that are attributable to the Contract. Add the resulting 
percentage to Base Contract expenses and assume that it remains the same in each year of 
the 1-, 3-, 5-, and 10-year periods; 

(g) Reflect any deferred sales load (or surrender charge) by assuming a complete surrender on 
the last day of the year; 

(h) Provide the information required in the second section of the Example only if Variable Option 
fees upon annuitization are different from those charged upon surrender; and 

(i) Provide the information required in the third section of the Example only if a sales load or 
other fee is charged upon a complete surrender. 

Item 5. Principal Risks of Investing in the Contract 

Summarize the principal risks of purchasing a Contract, including as applicable: 

(a) Investment Option Risk. Explain the principal risks of investing in an Investment Option, including 
the risks of poor investment performance and, for Index-Linked Options, the maximum potential 
loss from negative Index performance over the Crediting Period, as a percentage. 

(b) Early Withdrawal Risk. State that Contracts are unsuitable as short-term savings vehicles. Explain 
the limitations on access to cash value through withdrawals, including, as applicable, surrender 
charges, negative Contract Adjustments, loss of interest, and the possibility of adverse tax 



 

consequences. State the maximum potential loss resulting from a negative Contract Adjustment, 
as a percentage. 

(c) Index-Linked Option Risk. In addition to the potential loss from negative Index performance, 
describe the principal risks of investing in any Index-Linked Option offered under the Contract. 
State that an investor is not invested in the Index or in the securities tracked by the Index. 

Instructions. Include in this discussion:  

(1) The principal risks relating to, as applicable, limiting positive Index returns, the possibility of 
losses despite limits on negative Index returns, interest crediting methodologies, the impact 
of Contract fees on the amount of interest credited, and the reallocation of Contract value at 
the end of an Index-Linked Option’s Crediting Period,  

(2) The principal risks associated with the Index, including, as applicable, risks relating to type 
(e.g., market risk, small-cap risk, foreign securities risk, emerging market risk, etc.), the 
exclusion of dividends from Index return, and market volatility. Specify which risks relate to 
each Index offered under the Contract. Describe the principal risks related to the possible 
substitution of the Index before the end of an Index-Linked Option’s Crediting Period. 

(d) Contract Benefits Risk. Describe the principal risks associated with any benefits under the 
Contract, including the impact of excess withdrawals, if applicable. 

(e) Insurance Company Risk. Explain the principal risks associated with the Insurance Company’s 
ability to meet its guarantees under the Contract, including risks relating to its financial strength 
and claims-paying ability. 

(f) Contract Changes Risk. Describe the principal risks relating to any material reservation of rights 
under the Contract, including if applicable, the right to remove or substitute Portfolio Companies, 
add or remove Index-Linked Options and change the features of an Index-Linked Option from one 
Crediting Period to the next, stop accepting additional purchase payments, and impose 
investment restrictions or limitations on transfers. 

Item 6. Description of Insurance Company, Registered Separate Account, and Investment Options  

Concisely discuss the organization and operation or proposed operation of the Insurance Company, 
Registered Separate Account, Variable Options, Index-Linked Options, and Fixed Options. Include the 
information specified below, as applicable. 

(a) Insurance Company. Provide the name and address of the Insurance Company. State that the 
Insurance Company is obligated to pay all amounts promised to investors under the Contracts, subject to 
its financial strength and claims-paying ability. 

Instruction. If applicable, indicate that the Insurance Company is relying on the exemption provided by 
rule 12h-7 under the Securities Exchange Act (17 CFR 240.12h-7). 

(b) Registered Separate Account. Briefly describe the Registered Separate Account. Include a statement 
indicating that: 

(1) income, gains, and losses credited to, or charged against, the separate account reflect the 
separate account’s own investment experience and not the investment experience of the 
Insurance Company’s other assets; and 

(2) the assets of the separate account may not be used to pay any liabilities of the Insurance 
Company other than those arising from the Contracts. 



 

(c) Variable Options. Briefly describe the Variable Options currently offered under the Contract, including 
statements indicating that: 

(1) Contract value allocated to a Variable Option will vary based on the investment experience of the 
corresponding Portfolio Company in which the Variable Option invests. There is a risk of loss of 
the entire amount invested. 

(2) Information regarding each Portfolio Company, including (i) its name, (ii) its type (e.g., money 
market fund, bond fund, balanced fund, etc.) or a brief statement concerning its investment 
objectives, (iii) its investment adviser and any sub-investment adviser, (iv) current expenses, and 
(v) performance is available in an appendix to the prospectus, and provide cross-references. State 
that each Portfolio Company has issued a prospectus that contains more detailed information 
about the Portfolio Company, and provide instructions regarding how investors may obtain paper 
or electronic copies. 

(3) Concisely discuss the rights of investors to instruct the Insurance Company on the voting of 
shares of the Portfolio Companies, including the manner in which votes will be allocated.  

(d) Index-Linked Options.  

(1) Describe the Index-Linked Options currently offered under the Contract, including statements 
indicating that: 

(i) The Insurance Company will credit positive or negative interest at the end of a Crediting 
Period to amounts allocated to an Index-Linked Option based, in part, on the performance of 
the Index. An investment in an Index-Linked Option is not an investment in the Index or in 
any Index fund.  

(ii) The potential for investment loss could be significantly greater than the potential for 
investment gain. An investor could lose a significant amount of money if the Index declines 
in value.  

Instruction. Prominently state as a percentage the maximum amount of loss an investor 
could experience from negative Index performance, after taking into account the minimum 
guaranteed limit on Index loss provided under the Contract. 

(iii) An investor could lose a significant amount of money due to the Contract Adjustment if 
amounts are removed from an Index-Linked Option prior to the end of its Crediting Period. 

Instruction. Prominently state as a percentage the maximum amount of loss an investor 
could experience from a negative Contract Adjustment. State that this loss could be greater 
due to surrender charges and tax consequences.  

(iv) The Insurance Company can add or remove Index-Linked Options and change the features 
of an Index-Linked Option from one Crediting Period to the next, including the Index and the 
current limits on Index gains and losses, subject to contractual minimum guarantees. 

(v) Information regarding the features of each currently offered Index-Linked Option, including 
(i) its name, (ii) its type (e.g., market Index, exchange-traded fund, etc.), or a brief statement 
describing the assets that the Index seeks to track (e.g., U.S. large-cap equities), (iii) its 
Crediting Period, (iv) its Index crediting methodology, (v) its limit on Index loss, and (vi) its 
guaranteed minimum limit on Index gain, is available in an appendix to the prospectus, and 
provide cross-references.  



 

Instruction. This statement may be modified to conform to the table provided in response to 
Item 17(b). 

(2) Describe how interest is calculated and credited for each Index-Linked Option.  

(i) Limits on Index Losses 

(A) State that the Insurance Company will limit the negative Index return used in 
calculating interest credited to an Index-Linked Option at the end of its Crediting 
Period. Describe the manner(s) in which the Insurance Company will limit negative 
returns through the use of a floor, buffer, or some other rate or measure. Provide an 
example of how such rate could operate to limit a negative Index return (e.g., “if the 
Index return is -25% and the buffer rate is -10%, we will credit -15% (the amount that 
exceeds the buffer rate) at the end of the Crediting Period, meaning your Contract 
value will decrease by 15%”). 

(B) Disclose the current limit on Index losses for each Index-Linked Option, and the 
minimum limit guaranteed for the life of the Contract for any Index-Linked Option. State 
that the current limit on Index losses will not change during an Index-Linked Option’s 
Crediting Period. 

(C) Describe the factors the Insurance Company considers in determining the current rate 
for an Index-Linked Option, and how that choice may impact other features of the 
option set by the Insurance Company. Explain what an investor should consider 
regarding limits on Index losses before selecting an Index-Linked Option for 
investment. 

(ii) Limits on Index Gains.  

(A) State that the Insurance Company will limit the positive Index return used in calculating 
interest credited to an Index-Linked Option at the end of its Crediting Period. Describe 
the manner(s) in which the Insurance Company will limit positive returns through the 
use of a cap, participation rate, or some other rate or measure. Provide an example of 
how such rate could operate to limit a positive Index return (e.g., “if the Index return is 
12% and the cap rate is 4%, we will credit 4% in interest at the end of the Crediting 
Period, meaning your Contract value will increase by 4%”). 

(B) Disclose the current limit on Index gains for each Index-Linked Option, and the 
minimum limit guaranteed for the life of the Contract for any Index-Linked Option. State 
that the current limit on Index gains will not change during an Index-Linked Option’s 
Crediting Period.  

(C) Describe the factors the Insurance Company considers in determining the current rate 
for an Index-Linked Option, and how that choice may impact other features of the 
option set by the Insurance Company. Explain what an investor should consider 
regarding limits on Index gains before selecting an Index-Linked Option for investment. 

(iii) Crediting Period. 

(A) Generally describe the Index-Linked Option Crediting Periods available under the 
Contract (e.g., 1, 3, and 6 years) and the factors an investor should consider regarding 
different Crediting Period lengths before selecting an Index-Linked Option for 
investment. 



 

(B) Prominently state that amounts must remain in an Index-Linked Option until the end of 
its Crediting Period to be credited with all or partial interest, as applicable, and to avoid 
a possible Contract Adjustment in addition to potential surrender charges and tax 
consequences. Describe the transactions subject to a Contract Adjustment. Provide 
cross-references to related disclosure in the prospectus. 

(iv) Methodology and Examples.  

(A) For each Index crediting methodology, describe how interest is calculated and credited 
at the end of a Crediting Period based on the interest crediting formula or performance 
measure (e.g. point-to-point, step-up calculations, enhanced performance). 

(B) For each Index, provide a bar chart showing the annual return for each of the last 10 
calendar years (or for the life of the Index if less than 10 years). Provide a hypothetical 
example alongside each Index return that reflects the return after applying a 5% cap 
and a -10% buffer. 

Include the following legend before the bar chart, in the format specified: 

The bar chart shown below provides the Index’s annual returns for the last 10 
calendar years (or for the life of the Index if less than 10 years), as well as the 
Index returns after applying a hypothetical 5% cap and a hypothetical -10% 
buffer. The chart illustrates the variability of the returns from year to year and 
shows how hypothetical limits on Index gains and losses may affect these returns. 
Past performance is not necessarily an indication of future performance. 
 
The performance below is NOT the performance of any Index-Linked Option. Your 
performance under the Contract will differ, perhaps significantly. The 
performance below may reflect a different return calculation, time period, and 
limit on Index gains and losses than the Index-Linked Options, and does not 
reflect Contract fees and charges, including surrender charges and the Contract 
Adjustment, which reduce performance. 

Instructions. 

1. Include only one legend if bar charts for multiple Indexes are 
presented. 

2. Provide the corresponding numerical return adjacent to each bar.  

3. If the Contract does not offer any Index-Linked Option that uses a cap 
in its Index crediting methodology, the Company may reflect the rate or 
measure used to limit Index gains under the Contract assuming a hypothetical 
percentage comparable to a 5% cap. If the Contract does not offer any Index-
Linked Option that uses a buffer in its Index crediting methodology, the 
Company may reflect the rate or measure used to limit Index losses under the 
Contract assuming a hypothetical percentage comparable to a -10% buffer. 

4. If applicable, disclose in a footnote to the table that the Index return 
does not reflect the dividends paid on the assets comprising the Index.  

5. If applicable, disclose in a footnote to the table that the Index provider 
deducts fees and costs when calculating the Index return. 



 

6. Do not include additional performance presentations or historical Index 
performance that precedes the inception of the Index. 

(C) Provide a numerical example to illustrate the mechanics of each type of Index crediting 
methodology in a clear, concise, and understandable manner. 

Include the following legend, in the format specified: 

The following examples illustrate how we calculate and credit interest under each 
Index crediting methodology assuming hypothetical Index returns and 
hypothetical limits on Index gains and losses. The examples assume no 
withdrawals. 

 
Instructions. 

1. Assume hypothetical returns and limits that are reasonable based on current 
and anticipated market conditions and Contract sales. 

2. Include in the example a positive Index return above the limit on Index gains 
and a negative Index return below the limit on Index losses.  

3. Reflect any charges subtracted from interest credited or deducted from 
Contract value in the Index-Linked Options. 

4. Additional examples, charts, graphs, or other presentations may be included if 
clear, concise, and understandable. 

(v) Indexes. 

(A) For each Index, briefly describe the types of investments that compose the Index. 
Direct the investor to additional information about the Index.  

Instructions. 

1. Where there is more than one version of an Index (for example a total return 
version, price return version), it should be clear which Index relates to the Index-
Linked Option.  

2. If the Index is an exchange-traded fund (“ETF”), clarify whether the Index 
performance is based on the ETF’s Net Asset Value or closing value. Also clarify if 
the performance is based on the share price of the ETF and the impact of using 
share price as opposed to total return. 

3. If applicable, state that the Index does not reflect dividends paid on the securities 
comprising the Index, or that the Index deducts fees and costs when calculating 
Index performance, which will reduce Index performance. 

(B) State that the Insurance Company reserves the right to substitute an Index prior to 
the end of a Crediting Period. Explain: (a) all circumstances that could necessitate a 
substitution; (b) how the Insurance Company would choose a replacement Index; (c) 
when and how investors will be notified of any such change; (d) how Index return will 
be calculated at the end of the Crediting Period; and (e) what would happen if a 
suitable replacement Index were not found, including whether the Index-Linked 
Option will be discontinued prior to the end of the Crediting Period. 



 

(vi) Maturity. State whether investors will receive advance notice of a maturing Index-Linked 
Option. Disclose how an investor may provide instructions on reallocating Contract value at 
the end of the Crediting Period, and any automatic default reallocation in the absence of 
such instructions.  

Instruction. Explain how investors will be informed of Index-Linked Options available for 
allocation at the end of a Crediting Period, including any changes to currently offered Index-
Linked Options, and the discontinuance or addition of Index-Linked Options. 

(vii)Other Material Features. Describe any other material aspect of the Index-Linked Options, 
including limitations on transfers to or from the Index-Linked Options, rate holds, “bail-out” 
provisions, start dates, and holding accounts. If applicable, briefly describe how charges may 
impact Index-Linked Option value. 

(e) Fixed Options.  

(1) Describe the Fixed Options currently offered under the Contract. State that information 
regarding the features of each currently offered Fixed Option, including (i) its name, (ii) its term, 
and (iii) its minimum guaranteed interest rate, is available in an appendix to the prospectus, 
and provide cross-references.  

Instruction. This statement may be modified to conform to the table provided in response to 
Item 17(c). 

(2) Describe how interest is calculated and when it is credited for each Fixed Option. Disclose the 
length of the term and the minimum guaranteed interest rate. 

Instruction. Disclose the minimum guaranteed interest rate as a numeric rate, rather than 
referring to any minimums permitted under state law. 

(i) Maturity. If applicable, state whether investors will receive advance notice of a maturing 
Fixed Option. Disclose how an investor may provide instructions on reallocating Contract 
value at the end of the term, and any automatic default reallocation in the absence of such 
instructions.  

Instruction. Explain how investors will be informed of Fixed Options available for allocation at 
the end of a term, including any changes to currently offered Fixed Options, and the 
discontinuance or addition of Fixed Options. 

(ii) Other Material Features. Describe any other material aspect of the Fixed Options, including 
limitations on transfers to or from the Fixed Options, rate holds, start dates, and holding 
accounts. 

Item 7. Charges  

(a) Description. Briefly describe all current charges deducted from purchase payments, Contract value, 
or Investment Option assets, or any other source (e.g., sales loads, premium taxes and other taxes, 
administrative and transaction charges, risk charges, Contract loan charges, and optional benefit 
charges). Indicate whether each charge will be deducted from purchase payments, Contract value, or 
Investment Option assets, the proceeds of withdrawals or surrenders, or some other source. When 
possible, specify the amount of any charge as a percentage or dollar figure (e.g., 0.95% of average 
daily net assets or $5 per exchange). For recurring charges, specify the frequency of the deduction 
(e.g., daily, monthly, annually). Identify the person who receives the amount deducted, briefly explain 
what is provided in consideration for the charges, and explain the extent to which any charge can be 



 

modified. Where it is possible to identify what is provided in consideration for a particular charge 
(e.g., use of sales load to pay distribution costs), explain what is provided in consideration for that 
charge separately. 

Instructions. 

1. Describe the sales loads applicable to the Contract and how sales loads are charged and 
calculated, including the factors affecting the computation of the amount of the sales load. If the 
Contract has a front-end sales load, describe the sales load as a percentage of the applicable 
measure of purchase payments and as a percentage of the net amount invested for each 
breakpoint. For Contracts with a deferred sales load, describe the sales load as a percentage of 
the applicable measure of purchase payments (or other basis) that the deferred sales load may 
represent. Percentages should be shown in a table. Identify any events on which a deferred sales 
load is deducted (e.g., surrender or withdrawal). The description of any deferred sales load should 
include how the deduction will be allocated among Investment Options and when, if ever, the 
sales load will be waived (e.g., if the Contract provides a free withdrawal amount). 

2. Unless set forth in response to Instruction 1, list any special purchase plans or methods 
established pursuant to a rule or an exemptive order that reflect scheduled variations in, or 
elimination of, the sales load (e.g., group discounts, waiver of sales load upon annuitization or 
attainment of a certain age, waiver of deferred sales load for a certain percentage of Contract 
value (“free corridor”), investment of proceeds from another policy, exchange privileges, 
employee benefit plans, or the terms of a merger, acquisition or exchange offer made pursuant to 
a plan of reorganization); identify each class of individuals or transactions to which such plans 
apply; state each different sales charge available as a percentage of the public offering price and 
as a percentage of the net amount invested; and state from whom additional information may be 
obtained. Describe any other special purchase plans or methods established pursuant to a rule 
that reflect other variations in, or elimination of, the sales load or in any administrative charge or 
other deductions from purchase payments, and generally describe the basis for the variation or 
elimination in the sales load or other deduction (i.e., the size of the purchaser, a prior or existing 
relationship with the purchaser, the purchaser’s assumption of certain administrative functions, 
or other characteristics that result in differences in costs or services). 

3. If proceeds from sales loads will not cover the expected costs of distributing the Contracts, 
identify from what source the shortfall, if any, will be paid. If any shortfall is to be made from 
assets from the Insurance Company’s general account, disclose, if applicable, that any amounts 
paid by the Insurance Company may consist, among other things, of proceeds derived from Base 
Contract Expenses. 

4. If the Contract’s charge for premium or other taxes varies according to jurisdiction, identification 
of the range of current premium or other taxes is sufficient. 

(b) Commissions Paid to Dealers. State the commissions paid to dealers as a percentage of purchase 
payments. 

(c) Portfolio Company Charges. State that charges are deducted from and expenses paid out of the 
assets of the Portfolio Companies that are described in the prospectuses for those companies. 

(d) Operating Expenses. Describe any type of operating expenses for which the Registered Separate 
Account is responsible. If organizational expenses of the Registered Separate Account are to be paid 
out of its assets, explain how the expenses will be amortized and the period over which the 
amortization will occur. 



 

(e) Contract Adjustment. Describe any Contract Adjustment under the Contract. 

Instructions. 

1. State the maximum potential loss, as a percentage, that could result from a negative Contract 
Adjustment. 

2. Define the period during which the Contract Adjustment applies. 

3. Describe all transactions subject to the Contract Adjustment. For example, as applicable, state 
whether an adjustment will be applied if amounts are transferred or withdrawn from an Index-
Linked Option or from the Contract due to a partial withdrawal, surrender, election of an annuity 
option, payment of death benefit proceeds, etc., or where a particular Contract option (such as a 
withdrawal under a guaranteed living benefit) is utilized. Describe any circumstances under which 
the adjustment will be waived. 

4. Briefly describe in simple terms the manner in which the Contract Adjustment is determined, 
including: (i) whether the adjustment results from the application of a particular formula or set of 
factors (e.g., a change in value of hypothetical derivative instruments); (ii) the factors that may 
cause a positive or negative adjustment (e.g., timing of withdrawal, Index volatility, increase in 
external interest rates, etc.); (iii) a description of any proportionate withdrawal calculations; and (iv) 
how a positive or negative adjustment is applied (e.g., allocated among the Investment Options, 
applied to a withdrawal amount). Detailed disclosure on the method of calculating the Contract 
Adjustment should be placed in the SAI in response to Item 22. Provide a cross-reference to the SAI 
for more information about the Contract Adjustment, including examples illustrating the operation 
of the adjustment. 

5. State how the Contract Adjustment will affect the Contract value, surrender value, death benefit, 
and any living benefits, and disclose that a negative adjustment could reduce the values under the 
Contract by an amount greater than the value withdrawn. If applicable, state the impact of the 
Contract Adjustment on interest to be credited to an Index-Linked Option at the end of its Crediting 
Period. 

6. Describe the relationship between the Contract Adjustment and any other charges or fees applied 
under the Contract, including, for example, the sequence in which charges and adjustments are 
applied. 

7. Briefly describe the purpose of the Contract Adjustment (e.g., to transfer risk from the Insurance 
Company to the investor to protect the Insurance Company from losses on its own investments 
supporting Contract guarantees if amounts are withdrawn prematurely). 

8. Disclose how an investor can obtain information about the current value of a Contract Adjustment. 
State that this value can fluctuate daily, and the current value quoted to the investor may differ 
from the actual value calculated at the time of adjustment. 

Item 8. General Description of Contracts 

(a) Contract Rights. Identify the person or persons (e.g., the investor, participant, annuitant, or 
beneficiary) who have material rights under the Contracts, and the nature of those rights (1) during 
the accumulation period, (2) during the annuity period, and (3) after the death of the annuitant or 
investor. 

Instruction. Disclose all material state variations and intermediary-specific variations (e.g., variations 
resulting from different brokerage channels) to the offering. 

(b) Contract Provisions and Limitations. Briefly describe any provisions and limitations for: 

(1) minimum Contract value, and the consequences of falling below that amount;  



 

(2) allocation of purchase payments among Investment Options; 

(3) transfer of Contract value between Investment Options, including transfer programs (e.g., dollar 
cost averaging, portfolio rebalancing, asset allocation programs, and automatic transfer 
programs);  

(4) conversion or exchange of Contracts for another contract, including a fixed or variable annuity or 
life insurance contract; and 

Instruction. In discussing conversion or exchange of Contracts, the Registrant should include any 
time limits on conversion or exchange, the name of the company issuing the other contract and 
whether that company is affiliated with the issuer of the Contract, and how the cash value of the 
Contract will be affected by the conversion or exchange. 

(5) buyout offers, including interests or participations therein. 

(c) General Account. Describe the obligations under the Contract that are funded by the Insurance 
Company’s general account (e.g., Index-Linked or Fixed Options, death benefits, living benefits, or 
other benefits available under the Contract), and state that these amounts are subject to the 
Insurance Company’s claims-paying ability and financial strength. 

(d) Contract or Registered Separate Account Changes. Briefly describe the changes that can be made 
in the Contracts or the operations of the Registered Separate Account by the Registered Separate 
Account or the Insurance Company, including: 

(1) why a change may be made (e.g., changes in applicable law or interpretations of law); 

(2) who, if anyone, must approve any change (e.g., the investor or the Commission); and 

(3) who, if anyone, must be notified of any change. 

Instruction. Describe only those changes that would be material to a purchaser of the Contracts, such as 
a reservation of the right to deregister the Registered Separate Account under the Investment Company 
Act or to substitute one Portfolio Company for another. Do not describe possible non-material changes, 
such as changing the time of day at which accumulation unit values are determined. 

(e) Class of Purchasers. Disclose any limitations on the class or classes of purchasers to whom the 
Contract is being offered. 

(f) Frequent Transfers among Variable Options. 

(1) Describe the risks, if any, that frequent transfers of Contract value among Variable Options may 
present for other investors and other persons (e.g., participants, annuitants, or beneficiaries) who 
have material rights under the Contract. 

(2) State whether or not the Registered Separate Account or Insurance Company has adopted 
policies and procedures with respect to frequent transfers of Contract value among Variable 
Options. 

(3) If neither the Registered Separate Account nor the Insurance Company has adopted any such 
policies and procedures, provide a statement of the specific basis for the view of the Insurance 
Company that it is appropriate for the Registered Separate Account and Insurance Company not 
to have such policies and procedures. 



 

(4) If the Registered Separate Account or Insurance Company has any such policies and procedures, 
describe those policies and procedures, including: 

(i) whether or not the Registered Separate Account or Insurance Company discourages frequent 
transfers of Contract value among Variable Options; 

(ii) whether or not the Registered Separate Account or Insurance Company accommodates 
frequent transfers of Contract value among Variable Options; and 

(iii) any policies and procedures of the Registered Separate Account or Insurance Company for 
deterring frequent transfers of Contract value among Variable Options, including any 
restrictions imposed by the Registered Separate Account or Insurance Company to prevent or 
minimize frequent transfers. Describe each of these policies, procedures, and restrictions 
with specificity. Indicate whether each of these restrictions applies uniformly in all cases or 
whether the restriction will not be imposed under certain circumstances, including whether 
each of these restrictions applies to trades that occur through omnibus accounts at 
intermediaries, such as investment advisers, broker-dealers, transfer agents, and third party 
administrators. Describe with specificity the circumstances under which any restriction will 
not be imposed. Include a description of the following restrictions, if applicable: 

(A) any restrictions on the volume or number of transfers that may be made within a given 
time period; 

(B) any transfer fee; 

(C) any costs or administrative or other fees or charges that are imposed on persons deemed 
to be engaged in frequent transfers of Contract value among Variable Options, together 
with a description of the circumstances under which such costs, fees, or charges will be 
imposed; 

(D) any minimum holding period that is imposed before a transfer may be made from a 
Variable Option into another; 

(E) any restrictions imposed on transfer requests submitted by overnight delivery, 
electronically, or via facsimile or telephone; and 

(F) any right of the Registered Separate Account or Insurance Company to reject, limit, delay, 
or impose other conditions on transfers or to terminate or otherwise limit Contracts based 
on a history of frequent transfers among Variable Options, including the circumstances 
under which such right will be exercised. 

(5) If applicable, include a statement, adjacent to the disclosure required by paragraphs (f)(1) 
through (f)(4) of this Item, that the Statement of Additional Information includes a description of 
all arrangements with any person to permit frequent transfers of Contract value among Variable 
Options. 

Item 9. Annuity Period 

Briefly describe the annuity options available. The discussion should include: 

(a) Material factors that determine the level of annuity benefits; 

(b) The annuity commencement date (give the earliest and latest possible dates); 

(c) Frequency and duration of annuity payments, and the effect of these on the level of payment; 



 

(d) The effect of assumed investment return; 

(e) Any minimum amount necessary for an annuity option and the consequences of an insufficient 
amount; and 

(f) Rights, if any, to change annuity options or to effect a transfer of investment base after the annuity 
commencement date. 

Instructions: 

1. Describe the choices, if any, available to a prospective annuitant, and the effect of not specifying 
a choice. Where an annuitant is given a choice in assumed investment return, explain the effect 
of choosing a higher, as opposed to a lower, assumed investment return. 

2. Detailed disclosure on the method of calculating annuity payments should be placed in the SAI in 
response to Item 25. 

(g) If applicable, state that the investor will not be able to withdraw any Contract value amounts after the 
annuity commencement date. 

Item 10. Benefits Available Under the Contract 

(a) Include the following information: 

The following table[s] summarize information about the benefits available under the contract.  
   

Name of Benefit Purpose Is Benefit 
Standard or 
Optional 

Maximum Fee Brief Description 
of Restrictions/ 
Limitations 

   [ ]%  
   [ ]%  
 

Instructions. 

1. General. 

(a) The table required by paragraph (a) of this Item is meant to provide a tabular summary 
overview of the benefits described in paragraph (b) of this Item (e.g., standard or optional 
death benefits, standard or optional living benefits, etc.). 

(b) If the Contract offers multiple benefits of the same type (e.g., death benefit, accumulation 
benefit, withdrawal benefit, long-term care benefit), the Registrant may include multiple tables 
in response to paragraph (a) of this Item, if doing so might better permit comparisons of 
different benefits of the same type. Registrants that choose to use a single table should 
consider whether grouping together multiple benefits of the same type, with appropriate 
headings, might similarly permit better comparisons of those benefits. 

(c) The Registrant should include appropriate titles, headings, or any other information to 
promote clarity and facilitate understanding of the table(s) presented in response to 
paragraph (a) of this Item. For example, if certain optional benefits are only available to 
certain investors (e.g., investors who invested during specific time periods), the table could 
include footnotes or headings to identify which optional benefits are affected and to whom 
those optional benefits are available. 

2. Name of Benefit. State the name of each benefit included in the table(s). 



 

3. Purpose. Briefly describe the purpose of each benefit included in the table(s). 

4. Is Benefit Standard or Optional. State whether the benefit is standard or optional. If the 
Registrant includes titles or headings for the table(s) specifying whether the benefit is standard or 
optional, the Registrant does not need to include the “Is Benefit Standard or Optional” column in 
the table(s). 

5. Maximum Fee. State the maximum fee associated with each benefit included in the table(s). 
Include parentheticals providing information about what the stated percentage refers to (e.g., 
percentage of Contract value, percentage of benefit base, etc.). 

6. Current Fee. The Registrant may disclose the current charge in a separate column titled “Current 
Charge,” if the disclosure of the current charge is no more prominent than, and does not obscure 
or impede understanding of, the disclosure of the maximum charge.  

7. Brief Description of Restrictions/Limitations. Briefly describe the restriction(s) or limitation(s) 
associated with each benefit. Registrants are encouraged to use short phrases (e.g., “benefit 
limits investment options available,” “withdrawals could terminate benefit”) to describe the 
restriction(s) or limitation(s). 

(b) Briefly describe any benefits (e.g., death benefits, living benefits, etc.) offered under a Contract, 
including: 

(1) Whether the benefit is standard or optional; 

(2) The operation of the benefit, including the amount of the benefit and how the benefit amount may 
vary, the circumstances under which the value of the benefit may increase or be reduced 
(including the effect of withdrawals), and how the benefit may be terminated;  

(3) Fees and costs, if any, associated with the benefit; and  

(4) How the benefit amount is calculated and payable and the effect of choosing a specific method of 
payment on calculation of the benefit. 

(c) Briefly describe any limitations, restrictions and risks associated with any benefit offered under the 
Contract (e.g., restrictions on which Portfolio Companies or Investment Options may be selected; risk 
of reduction or termination of benefit or of additional costs resulting from excess withdrawals). 

Instruction. In responding to paragraphs (b) and (c) of this Item, provide one or more examples 
illustrating the operation of each benefit in a clear, concise, and understandable manner. 

Item 11. Purchases and Contract Value 

(a) Briefly describe the procedures for purchasing a Contract. Include a concise explanation of: 

(1) the minimum initial and subsequent purchase payments required and any limitations on the 
amount of purchase payments that will be accepted (if there are separate limits for each 
Investment Option, state these limits);  

(2) a statement of when initial and subsequent purchase payments are credited; and 

(3) a description of how purchase payments are allocated to the Investment Options, including how 
such allocation would take place in the absence of instructions from the investor.  

(b) For Variable Options:(1) Describe the manner in which purchase payments are credited, including: (A) an explanation 
that purchase payments are credited on the basis of accumulation unit value; (B) how 
accumulation unit value is determined; and (C) how the number of accumulation units 
credited to a Contract is determined. 

(2) Explain that investment performance of the Portfolio Companies, expenses, and deduction of 
certain charges affect accumulation unit value and/or the number of accumulation units. 

(3) Describe when calculations of accumulation unit value are made and that purchase payments 
are credited to a Contract on the basis of accumulation unit value next determined after 
receipt of a purchase payment. 

(c) Identify each principal underwriter (other than the Insurance Company) of the Contracts and state its 
principal business address. If the principal underwriter is affiliated with the Registrant or any 
affiliated person of the Registrant, identify how they are affiliated (e.g., the principal underwriter is 
controlled by the Insurance Company). 

Item 12. Surrenders and Withdrawals 

(a) Surrender and Withdrawal. Briefly describe how surrenders and withdrawals can be made from a 
Contract, including any limits on the ability to surrender, how the proceeds are calculated, and when 
they are payable. Briefly describe the potential effect of such surrenders and withdrawals. 

(b) Additional Information Regarding Surrender and Withdrawal. Indicate generally whether and under 
what circumstances surrenders and withdrawals are available under a Contract, including the 
minimum and maximum amounts that may be surrendered or withdrawn, any limits on their 
availability, how the proceeds are calculated, and when the proceeds are payable. 

(c) Effect of Surrender and Withdrawal. Indicate generally whether and under what circumstances 
surrenders or withdrawals will affect a Contract’s cash value, death benefit(s), and/or any living 
benefits, and whether any charge(s) and Contract Adjustment will apply. 

(d) Investment Option Allocation. Describe how surrenders and withdrawals will be allocated to the 
Investment Options, including how such allocation would take place in the absence of instructions 
from the investor. 

Instruction. The Registrant should generally describe the terms and conditions that apply to surrender 
and withdrawal transactions. Technical information regarding the determination of amounts available to 
be surrendered or withdrawn should be included in the SAI. 

(e) Involuntary Redemption. Briefly describe any provision for involuntary redemptions under the 
Contract and the reasons for it, such as the size of the account or infrequency of purchase payments. 

(f) Revocation Rights. Briefly describe any revocation rights (e.g., “free look” provisions), including a 
description of how the amount refunded is determined. Disclose the method for crediting Variable 
Option earnings to purchase payments during the free look period, and whether Investment Options 
are limited during the free look period. 

Item 13. Loans 

Briefly describe the loan provisions of the Contract, including any of the following that are applicable. 

(a) Availability of Loans. State that a portion of the Contract’s cash surrender value may be borrowed. 
State how the amount available for a loan is calculated. 



 

(b) Limitations. Describe any limits on availability of loans (e.g., a prohibition on loans during the first 
Contract year).  

(c) Interest. Describe how interest accrues on the loan, when it is payable, and how interest is treated if 
not paid. Explain how interest on the amount in the collateral account is credited to the Contract and 
allocated to the investment options. 

(d) Effect on Contract Value and Death Benefit. Describe how loans and loan repayments affect Contract 
value and how they are allocated among the investment options, including, if applicable, how such 
allocation would take place in the absence of instructions from the investor. Include (i) a brief 
explanation that amounts borrowed under a Contract do not participate in the investment experience 
of an Investment Option and that loans, therefore, can affect the Contract value and death benefit 
whether or not the loan is repaid, and (ii) a brief explanation that the Contract value at surrender and 
the death proceeds payable will be reduced by the amount of any outstanding Contract loan plus 
accrued interest. 

(e) Other Effects. Describe any other effect that a loan could have on the Contract (e.g., the effect of a 
Contract loan in excess of Contract value). 

(f) Procedures. Describe the loan procedures, including how and when amounts borrowed are 
transferred out of the Investment Options and how and when amounts repaid are credited to the 
Investment Options. 

Item 14. Taxes 

(a) Tax Consequences. Describe the material tax consequences to the investor and beneficiary of buying, 
holding, exchanging, or exercising rights under the Contract. 

Instruction. Discuss the taxation of annuity payments, death benefit proceeds, periodic and non-periodic 
withdrawals, loans, and any other distribution that may be received under the Contract, as well as the tax 
benefits accorded the Contract, and other material tax consequences. Describe, if applicable, whether 
the tax consequences vary with different uses of the Contract. 

(b) Qualified Plans. Identify the types of qualified plans for which the Contracts are intended to be used. 

Instructions: 

1. Identify the types of persons who may use the plans (e.g., corporations, self-employed individuals) 
and disclose, if applicable, that the terms of the plan may limit the rights otherwise available 
under the Contracts. 

2. Do not describe the Internal Revenue Code requirements for qualifications of plans or the non-
annuity tax consequences of qualification (e.g., the effect on employer taxation). 

(c) Effect. Describe the effect, if any, of taxation on the determination of cash values or Contract values. 

Item 15. Legal Proceedings 

Describe any material pending legal proceedings, other than ordinary routine litigation incidental to the 
business, to which the Registered Separate Account, the principal underwriter, or the Insurance 
Company is a party. Include the name of the court where the case is pending, the date instituted, the 
principal parties involved, a description of the factual basis alleged to underlie the proceeding, and the 
relief sought. Include similar information as to any proceedings instituted, or known to be contemplated, 
by a governmental authority. 



 

Instruction. For purposes of this requirement, legal proceedings are material only to the extent that they 
are likely to have a material adverse effect on the Registered Separate Account, the ability of the 
principal underwriter to perform its contract with the Registrant, or the ability of the Insurance Company 
to meet its obligations under the Contracts. 

Item 16. Financial Statements 

If all of the required financial statements of the Registered Separate Account and the Insurance 
Company (see Item 26 and General Instruction C.3.(b)) are not in the prospectus, state, under a separate 
caption, where the financial statements may be found. Briefly explain how investors may obtain any 
financial statements not in the Statement of Additional Information. 

Item 17. Investment Options Available Under the Contract 

Include the following information as an Appendix under the heading “Appendix: Investment Options 
Available Under the Contract.” A Registrant may modify the Appendix heading as appropriate under the 
Contract. 

(a) Variable Options. Include the following legend, in the format specified below: 

The following is a list of Portfolio Companies available under the Contract. More information about the 
Portfolio Companies is available in the prospectuses for the Portfolio Companies, which may be 
amended from time to time and can be found online at [___]. You can also request this information at no 
cost by calling [____] or by sending an email request to [___]. 

The current expenses and performance information below reflects fee and expenses of the Portfolio 
Companies, but do not reflect the other fees and expenses that your Contract may charge [, such as 
Platform Charges]. Expenses would be higher and performance would be lower if these other charges 
were included. Each Portfolio Company’s past performance is not necessarily an indication of future 
performance. 

Type/Investment 
Objective 

Portfolio Company 
and Adviser/ 
Subadviser 

Current Expenses  Average Annual Total Returns 

(as of 12/31/_) 

1 year 5 year 10 year 

[Insert] [Names of Portfolio 
Company and 

adviser/subadviser] 

[_]% [_]% [_]% [_]% 

 
Instructions. 

1. General. 

(a) Only include Portfolio Companies that are investment options under the Contract. Indicate if 
investments in any of the Portfolio Companies are restricted (e.g., because of a “hard” or 
“soft” close). 

(b) The introductory legend to the table must provide a website address, other than the address 
of the Commission’s electronic filing system; toll free telephone number; and email address 
that investors can use to obtain the prospectuses of the Portfolio Companies and to request 
other information about the Portfolio Companies. The website address must be specific 
enough to lead investors directly to the prospectuses of the Portfolio Companies, rather than 
to the home page or other section of the website on which the materials are posted. The 



 

website could be a central site with prominent links to each document. 

(c) The legend may indicate, if applicable, that the prospectuses and other information are 
available from a financial intermediary (such as an insurance sales agent or broker-dealer) 
through which the Contract may be purchased or sold.   

(d) Registrants not relying upon rule 498A(j) under the Securities Act [17 CFR 230.498A(j)] with 
respect to the Portfolio Companies that are investment options under the Contract may, but 
are not required to, provide the next-to-last sentence of the first paragraph of the introductory 
legend to the table regarding online availability of the prospectuses. 

(e) If applicable, include a statement explaining that updated performance information is 
available and providing a website address and/or toll-free (or collect) telephone number 
where the updated information may be obtained. 

2. Type/Investment Objective. Briefly describe each Portfolio Company’s type (e.g., money market 
fund, bond fund, balanced fund, etc.), or include a brief statement describing the Portfolio 
Company’s investment objectives. 

3. Portfolio Company and Adviser/Subadviser. State the name of each Portfolio Company and its 
adviser/subadviser, as applicable. The adviser’s/sub-adviser’s name may be omitted if it is 
incorporated into the name of the Portfolio Company. A Registrant also need not identify a sub-
adviser whose sole responsibility for the Portfolio Company is limited to day-to-day management 
of the Portfolio Company’s holdings of cash and cash equivalent instruments, unless the Portfolio 
Company is a money market fund or other Portfolio Company with a principal investment strategy 
of regularly holding cash and cash equivalent instruments. If the Portfolio Company has three or 
more sub-advisers, each of which manages a portion of the Portfolio Company’s portfolio, the 
Registrant need not identify each such sub-adviser, except that the Registrant must identify any 
sub-adviser that is (or is reasonably expected to be) responsible for the management of a 
significant portion of the Portfolio Company’s net assets. For purposes of this paragraph, a 
significant portion of a Portfolio Company’s net assets generally will be deemed to be 30% or 
more of the Portfolio Company’s net assets. 

4. Current Expenses. Report “Total Annual Fund Operating Expenses” as calculated pursuant to Item 
3 of Form N-1A [17 CFR §§ 239.15A and 274.11A], reflecting any expense reimbursements or 
fee waiver arrangements that are in place and reported in the Portfolio Company’s registration 
statement pursuant to Item 3 of Form N-1A. If applicable, identify each Portfolio Company subject 
to an expense reimbursement or fee waiver arrangement and provide a footnote stating that their 
annual expenses reflect temporary fee reductions.  

5. Platform Charge. If the Insurance Company charges a Platform Charge to make any of the 
Portfolio Companies available as investment options under the Contract, add a column titled 
“Platform Charge” disclosing the current Platform Charge for each Portfolio Company. If 
applicable, also provide a footnote indicating the highest level to which any relevant Platform 
Charge may be increased.  

6. Current Expenses + Platform Charge. If the Insurance Company charges a Platform Charge to 
make any of the Portfolio Companies available as investment options under the Contract, add a 
column titled “Current Expenses + Platform Charge.” The column contemplated by this Instruction 
must be presented in a manner reasonably calculated to draw investor attention to that column. 

7. Average Annual Total Returns.  For purposes of this Item, “average annual total returns” means 
the “average annual total return” (before taxes) as calculated pursuant to Item 4(b)(2)(iii) of Form 

https://www.law.cornell.edu/cfr/text/17/239.15A


 

N-1A. 

(b) Index-Linked Options. Include the following legend, in the format specified below: 

The following is a list of Index-Linked Options currently available under the Contract. We may change the 
features of the Index Linked Options listed below (including the Index and the current limits on Index 
gains and losses), offer new Index-Linked Options, and terminate existing Index-Linked Options. We will 
provide you with written notice before doing so. Information about current limits on Index gains is 
available at [provide website address]. 

 
Note: If amounts are withdrawn from an Index-Linked Option before the end of its Crediting Period, we 
may apply a Contract Adjustment. This may result in a significant reduction in your Contract value that 
could exceed any protection from Index loss that would be in place if you held the option until the end of 
the Crediting Period. 

Index Type of Index Crediting Period  
Index Crediting 
Methodology 

Limit on Index 
Loss (if held 
until end of 

Crediting 
Period) 

Guaranteed 
Minimum Limit 
on Index Gain 

[Name of Index] [Insert] [  ] Year [  ]  [  ]%  [  ]%  

Instructions. 

1. General.  

(a) Include appropriate cross-references in the legend to the section(s) of the prospectus that 
describe the features of the Index-Linked Options as well as the Contract Adjustment. 

(b) Only include those Index Linked Options that are available under the Contract. Indicate if 
investments in any of the Index-Linked Options are restricted (e.g., because of a “hard” or 
“soft” close). 

(c) An Insurance Company may add, modify, or exclude table headings only as necessary to 
describe the material features of an Index-Linked Option. 

(d) If an Index provider calculates the Index return in a manner that does not reflect the full 
investment performance of the assets tracked by the Index (e.g., the return does not reflect 
dividends paid on the assets composing the Index, the return reflects a fee or cost, etc.), 
then include, if applicable, a footnote to the table stating that the Index return does not 
reflect the full investment performance of the assets it tracks, which will reduce Index 
performance. 

(e) The website address in the legend must be specific enough to lead investors directly to 
current rates, rather than to the home page or other section of the website on which the 
rates are posted. 

2. Index. Provide the name of the Index. 

3. Type. Briefly describe the type of Index (e.g., market index, exchange-traded fund, etc.), or 
include a brief statement describing the assets that the Index seeks to track (e.g., U.S. large-cap 



 

equities). 

4. Crediting Period. State the duration of the Index-Linked Option. 

5. Index Crediting Methodology. If the Insurance Company utilizes multiple index crediting 
methodologies under the Contract (e.g., point-to-point, step-up, enhanced upside, etc.), include a 
column indicting the type of methodology used for each Index-Linked Option.  

6. Limit on Index Loss (if held until end of Crediting Period). State the current percentage used by 
the Insurance Company in its interest crediting methodology to limit the amount of negative 
Index return credited to the Index-Linked Option. Identify in the table whether this limit is a 
buffer, floor, or some other rate or measure. 

7. Limit on Index Gain. State the guaranteed minimum percentage the Insurance Company may 
use in its interest crediting methodology to limit the amount of positive Index return credited to 
the Index-Linked Option. Identify in the table whether this limit is a cap, participation rate, or 
some other rate or measure. 

(c) Fixed Options. Include the following legend, in the format specified below: 

The following is a list of Fixed Options currently available under the Contract. We may change the 
features of the Fixed Options listed below, offer new Fixed Options, and terminate existing Fixed Options. 
We will provide you with written notice before doing so. 

Name Term 
Minimum Guaranteed Interest 

Rate 

[Name of Fixed Option] [  ] Year [  ]% 

Instructions. 

1. General.  

(a) Include appropriate cross-references in the legend to the section(s) of the prospectus that 
describe the features of the Fixed Options. 

(b) Only include those Fixed Options that are available under the Contract. 

(c) A Company may add, modify, or exclude table headings only as necessary to describe the 
material features of a Fixed Option. 

2. Term. State the duration of the Fixed Option. 

3. Minimum Guaranteed Interest Rate. Disclose the minimum guaranteed interest rate as a 
numeric rate, rather than referring to any minimums permitted under state law.  

(d) Restrictions. If the availability of one or more Investment Options varies by benefit offered under 
the Contract: 

(1) The following sentence should be added to the first paragraph of the legend preceding each table 
above, as applicable: “Depending on the [optional] benefits you choose, you may not be able to 
invest in certain Investment Options, as noted below.”; and 

(2) Indicate which Investment Options are available (or are restricted) under the benefits offered 



 

under the Contract. The Appendix could incorporate a separate table that is structured pursuant 
to the following example, or could use any other presentation that might promote clarity and 
facilitate understanding: 

[Investment Option] [Benefit #1] [Benefit #2] [Benefit #3] [Benefit #4] 

Investment Option A     

Investment Option B     

Investment Option C     

Investment Option D     

 

  



 

PART B - INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION 

Item 18. Cover Page and Table of Contents  

(a) Front Cover Page. Include the following information on the outside front cover page of the SAI: 

(1) The Registered Separate Account’s name. 

(2) The Insurance Company’s name. 

(3) The name of the Contract and the Class or Classes, if any, to which the Contract relates. 

(4) A statement or statements:  

(i) That the SAI is not a prospectus;  

(ii) How the prospectus may be obtained; and 

(iii) Whether and from where information is incorporated by reference into the SAI, as permitted 
by General Instruction D. 

Instruction. Any information incorporated by reference into the SAI must be delivered with the SAI. 

(5) The date of the SAI and the prospectus to which the SAI relates. 

(b) Table of Contents. Include under appropriate captions (and subcaptions) a list of the contents of the 
SAI and, when useful, provide cross-references to related disclosure in the prospectus. 

Item 19. General Information and History 

(a) Insurance Company. Provide the date and form of organization of the Insurance Company, the name 
of the state or other jurisdiction in which the Insurance Company is organized, and a description of 
the general nature of the Insurance Company’s business. 

Instruction. The description of the Insurance Company’s business should be short and need not list all of 
the businesses in which the Insurance Company engages or identify the jurisdictions in which it does 
business if a general description (e.g., “variable annuity” or “reinsurance”) is provided. 

(b) Registered Separate Account. Provide the date and form of organization of the Registered Separate 
Account and the Registered Separate Account’s classification pursuant to section 4 of the Investment 
Company Act [15 U.S.C. 80a-4] (i.e., a separate account and a unit investment trust). 

(c) History of Insurance Company and Registered Separate Account. If the Insurance Company’s name 
was changed during the past five years, state its former name and the approximate date on which it 
was changed. If, at the request of any state, sales of contracts offered by the Registered Separate 
Account have been suspended at any time, or if sales of contracts offered by the Insurance Company 
have been suspended during the past five years, briefly describe the reasons for and results of the 
suspension. Briefly describe the nature and results of any bankruptcy, receivership, or similar 
proceeding, or any other material reorganization, readjustment, or succession of the Insurance 
Company during the past five years. 

(d) Ownership of Registered Separate Account Assets. If 10 percent or more of the assets of any 
Variable Option are not attributable to Contracts or to accumulated deductions or reserves (e.g., 
initial capital contributed by the Insurance Company), state what percentage those assets are of the 
total assets of the Registered Separate Account. If the Insurance Company, or any other person 
controlling the assets, has any present intention of removing the assets from the Registered 



 

Separate Account, so state. 

(e) Control of Insurance Company. State the name of each person who controls the Insurance Company 
and the nature of its business. 

Instruction. If the Insurance Company is controlled by another person that, in turn, is controlled by 
another person, give the name of each control person and the nature of its business. 

Item 20. Non-Principal Risks of Investing in the Contract 

Summarize the non-principal risks of purchasing a Contract to the extent not disclosed in the prospectus.  

Item 21. Services 

(a) Expenses Paid by Third Parties. Describe all fees, expenses, and costs of the Registered Separate 
Account that are to be paid by persons other than the Insurance Company or the Registered Separate 
Account, and identify those persons. 

(b) Service Agreements. Summarize the substantive provisions of any management-related service 
contract that may be of interest to a purchaser of the Contracts, under which services are provided to 
the Registrant in connection with the Contracts, unless the contract is described in response to some 
other item of the form. Indicate the parties to the contract, and the total dollars paid and by whom for 
each of the past three years.  

Instructions: 

1. The term “management-related service contract” includes any contract with the Registrant to 
keep, prepare, or file accounts, books, records, or other documents required under federal or 
state law, or to provide any similar services with respect to the daily administration of the 
Registered Separate Account, but does not include the following:  

(a) Any agreement with the Registrant to act as custodian or agent to administer purchases and 
redemptions under the Contracts, and  

(b) Any contract with the Registrant for outside legal or auditing services, or contract for personal 
employment entered into with the Registrant in the ordinary course of business. 

2. In summarizing the substantive provisions of any management-related service contract, include 
the following:  

(a) The name of the person providing the service;  

(b) The direct or indirect relationships, if any, of the person with the Registered Separate Account, 
the Insurance Company, or the principal underwriter; and 

(c) The nature of the services provided, and the basis of the compensation paid for the services 
for the Registrant’s last three fiscal years. 

(c) Other Service Providers. 

(1) Unless disclosed in response to paragraph (b) or another item of this form, identify and state the 
principal business address of any person who provides significant administrative or business 
affairs management services for the Registrant in connection with the Contracts (e.g., an 
“Administrator,” “Sub-Administrator,” “Servicing Agent”), describe the services provided, and the 
compensation paid for the services. 



 

(2) State the name and principal business address of the Registered Separate Account’s custodian 
and Registrant’s independent public accountant and describe generally the services performed by 
each. 

(3) If the Registered Separate Account’s assets are held by a person other than the Insurance 
Company, a commercial bank, trust company, or depository registered with the Commission as 
custodian, state the nature of the business of each such person. 

(4) If an affiliated person of the Registered Separate Account or the Insurance Company, or an 
affiliated person of such an affiliated person, acts as administrative or servicing agent for the 
Registrant in connection with the Contracts, describe the services the person performs and the 
basis for remuneration. State, for the past three years, the total dollars paid for the services, and 
by whom. 

Instruction. No disclosure need be given in response to paragraph (c)(4) of this Item for an 
administrative or servicing agent who is also the Insurance Company. 

(5) If the Insurance Company is the principal underwriter of the Contracts, so state. 

Item 22. Purchase of Securities Being Offered 

(a) Describe the manner in which Registrant’s securities are offered to the public. Include a description 
of any special purchase plans and any exchange privileges not described in the prospectus. 

Instruction. Address exchange privileges between Investment Options, between the Registered Separate 
Account and other separate accounts, and between the Registered Separate Account and contracts 
offered through the Insurance Company’s general account. 

(b) Describe the method that will be used to determine the sales load on the Contracts offered by the 
Registrant. 

Instruction. Explain fully any difference in the price at which Contracts are offered to members of the 
public, as individuals or as groups, and the prices at which the Contracts are offered for any class of 
transactions or to any class of individuals, including officers, directors, members of the board of 
managers, or employees of the Insurance Company, underwriter, Portfolio Company, or investment 
adviser to the Portfolio Company. 

(c) Frequent Transfer Arrangements. Describe any arrangements with any person to permit frequent 
transfers of Contract value among Variable Options, including the identity of the persons permitted to 
engage in frequent transfers pursuant to such arrangements, and any compensation or other 
consideration received by the Registered Separate Account, the Insurance Company, or any other 
party pursuant to such arrangements.  

Instructions: 

1. The consideration required to be disclosed by paragraph (c) of this Item includes any agreement 
to maintain assets in the Registered Separate Account or in other investment companies or 
accounts managed or sponsored by the Insurance Company, any investment adviser of a Portfolio 
Company, or any affiliated person of the Insurance Company or of any such investment adviser. 

2. If the Registrant has an arrangement to permit frequent transfers of Contract value among 
Variable Options by a group of individuals, such as the participants in a defined contribution plan 
that meets the requirements for qualification under section 401(k) of the Internal Revenue Code 
(26 U.S.C. 401(k)), the Registrant may identify the group rather than identifying each individual 



 

group member. 

(d) Contract Adjustment. Fully explain the operation of any Contract Adjustment under the Contract, 
including any formulas used to calculate the adjustment. 

Instruction. Include one or more numeric examples to illustrate the application of the Contract 
Adjustment. The example should include a negative adjustment, reflect surrender charges, if 
applicable, and disclose the percentage change in Contract value as a result of the adjustment. 

Item 23. Underwriters 

(a) Identification. Identify each principal underwriter (other than the Insurance Company) of the 
Contracts, and state its principal business address. If the principal underwriter is affiliated with the 
Registered Separate Account, the Insurance Company, or any affiliated person of the Registered 
Separate Account or the Insurance Company, identify how they are affiliated (e.g., the principal 
underwriter is controlled by the Insurance Company). 

(b) Offering and Commissions. For each principal underwriter distributing Contracts of the Registrant, 
state: 

(1) whether the offering is continuous; and 

(2) the aggregate dollar amount of underwriting commissions paid to, and the amount retained by, 
the principal underwriter for each of the Registrant’s last three fiscal years. 

(c) Other Payments. With respect to any payments made by the Registrant to an underwriter of or dealer 
in the Contracts during the Registrant’s last fiscal year, disclose the name and address of the 
underwriter or dealer, the amount paid and basis for determining that amount, the circumstances 
surrounding the payments, and the consideration received by the Registrant.  Do not include 
information about: 

(1) Payments made through deduction from purchase payments made at the time of sale of the 
Contracts; or 

(2) Payments made from Contract values upon surrender of or withdrawal from the Contracts  

Instructions. 

1. Information need not be given about the service of mailing proxies or periodic reports of the 
Registered Separate Account. 

2. Exclude information about bona fide contracts with the Registered Separate Account or the 
Insurance Company for outside legal or auditing services, or bona fide contracts for personal 
employment entered into with the Registered Separate Account or the Insurance Company in the 
ordinary course of business. 

3. Information need not be given about any service for which total payments of less than 
$15,000 were made during each of the Registrant’s last three fiscal years. 

4. Information need not be given about payments made under any contract to act as 
administrative or servicing agent. 

5. If the payments were made under an arrangement or policy applicable to dealers generally, 
describe only the arrangement or policy. 



 

Item 24. Calculation of Performance Data 

(a) Money Market Funded Sub-Accounts. Yield quotation(s) included in the prospectus for an account or 
sub-account of a Registered Separate Account that holds itself out as a “money market” account or 
sub-account should be calculated according to paragraphs (a)(1) - (2). 

(1) Yield Quotation. Based on the 7 days ended on the date of the most recent balance sheet of the 
Registered Separate Account included in the registration statement, calculate the yield by 
determining the net change, exclusive of capital changes and income other than investment 
income, in the value of a hypothetical pre-existing account having a balance of one accumulation 
unit of the account or sub-account at the beginning of the period, subtracting a hypothetical 
charge reflecting deductions from Contracts, and dividing the difference by the value of the 
account at the beginning of the base period to obtain the base period return, and then multiplying 
the base period return by (365/7) with the resulting yield figure carried to at least the nearest 
hundredth of one percent. 

(2) Effective Yield Quotation. Based on the 7 days ended on the date of the most recent balance 
sheet of the Registered Separate Account included in the registration statement, calculate the 
effective yield, carried to at least the nearest hundredth of one percent, by determining the net 
change, exclusive of capital changes and income other than investment income, in the value of a 
hypothetical pre-existing account having a balance of one accumulation unit of the account or 
sub-account at the beginning of the period, subtracting a hypothetical charge reflecting 
deductions from Contracts, and dividing the difference by the value of the account at the 
beginning of the base period to obtain the base period return, and then compounding the base 
period return by adding 1, raising the sum to a power equal to 365 divided by 7, and subtracting 
1 from the result, according to the following formula: 

EFFECTIVE YIELD = [(BASE PERIOD RETURN +1)365/7]-1. 

Instructions: 

1. When calculating the yield or effective yield quotations, the calculation of net change in account 
value must include all deductions that are charged to all Contracts in proportion to the length of 
the base period. For any account fees that vary with the size of the account, assume an account 
size equal to the sub-account’s mean (or median) account size. 

2. Deductions from purchase payments and sales loads assessed at the time of redemption or 
annuitization should not be reflected in the computation of yield and effective yield. However, the 
amount or specific rate of such deductions must be disclosed. 

3. Exclude realized gains and losses from the sale of securities and unrealized appreciation and 
depreciation from the calculation of yield and effective yield. Exclude income other than 
investment income. 

4. If applicable, disclose that the performance information may not reflect all Contract charges 
(contracts may impose certain charges that are not reflected in the performance of the sub-
account, but reduce the value of an investment in the sub-account, such as optional benefit 
charges).  Performance would be lower if these charges were included. 

(b) Other Sub-Accounts. Performance information included in the prospectus for the Registered 
Separate Account should be calculated according to paragraphs (b)(i) – (iii). 

(1) Average Annual Total Return Quotation. For the 1-, 5-, and 10-year periods ended on the date of 
the most recent balance sheet of the Registered Separate Account included in the registration 



 

statement, calculate the average annual total return by finding the average annual compounded 
rates of return over the 1-, 5-, and 10-year periods that would equate the initial amount invested 
to the ending redeemable value, according to the following formula: 

P(1+T)n = ERV 

Where: 

P =  a hypothetical initial purchase payment of $1,000  

T = average annual total return 

n = number of years 

ERV   = ending redeemable value of a hypothetical $1,000 purchase payment made 
at the beginning of the 1-, 5-, or 10-year periods at the end of the 1-, 5-, or 10- 
year periods (or fractional portion). 

Instructions: 

1. Assume the maximum sales load (or other charges deducted from purchase payments) is 
deducted from the initial $1,000 purchase payment. 

2. Include all recurring fees that are charged to all Contracts. For any account fees that vary with 
the size of the account, assume an account size equal to the sub-account’s mean (or median) 
account size. If recurring fees charged to Contracts are paid other than by redemption of 
accumulation units, they should be appropriately reflected. 

3. Determine the ending redeemable value by assuming a complete redemption at the end of 
the 1-, 5-, or 10- year periods and the deduction of all nonrecurring charges deducted at the 
end of each period. 

4. If the Registered Separate Account’s registration statement has been in effect less than one, 
five, or ten years, the time period during which the registration statement has been in effect 
should be substituted for the period stated. 

5. Carry the total return quotation to the nearest hundredth of one percent. 

6. Total return information in the prospectus need only be current to the end of the Registered 
Separate Account’s most recent fiscal year. 

7. If applicable, disclose that the performance information may not reflect all Contract charges 
and provide one or more examples of such charges (contracts may impose certain charges 
that are not reflected in the performance of the sub-account, but reduce the value of an 
investment in the sub-account, such as optional benefit charges). State that performance 
would be lower if these charges were included. 

(2) Yield Quotation. Based on a 30-day (or one month) period ended on the date of the most recent 
balance sheet of the Registered Separate Account included in the registration statement, 
calculate yield by dividing the net investment income per accumulation unit earned during the 
period by the maximum offering price per unit on the last day of the period, according to the 
following formula: 



 

YIELD = 2[(𝑎𝑎−𝑏𝑏
𝑐𝑐𝑐𝑐

+ 1)6 – 1] 

Where: 

a = net investment income earned during the period by the Portfolio Company attributable 
to shares owned by the sub-account 

b = expenses accrued for the period (net of reimbursements) 

c = the average daily number of accumulation units outstanding during the period 

d = the maximum offering price per accumulation unit on the last day of the period. 

Instructions: 

1. Include among the expenses accrued for the period all recurring fees that are charged to all 
Contracts. For any account fees that vary with the size of the account, assume an account size 
equal to the sub-account’s mean (or median) account size. 

2. If a broker-dealer or an affiliate (as defined in paragraph (b) of rule 1-02 of Regulation S-X [17 
CFR 210.1-02(b)]) of the broker-dealer has, in connection with directing the Portfolio 
Company’s brokerage transactions to the broker-dealer, provided, agreed to provide, paid for, 
or agreed to pay for, in whole or in part, services provided to the Portfolio Company (other than 
brokerage and research services as these terms are defined in section 28(e) of the Securities 
Exchange Act [15 U.S.C. 78bb(e)]), add to expenses accrued for the period an estimate of 
additional amounts that would have been accrued for the period if the Portfolio Company had 
paid for the services directly in an arms-length transaction. 

3. Net investment income must be calculated by the Portfolio Company as prescribed by Item 
26(b)(4) of Form N-1A. 

NOTE: (a-b) = net investment income in the Item 26(b)(4) equation. 

4. Disclose the amount or specific rate of any nonrecurring account or sales charges. 

5. If applicable, disclose that the performance information may not reflect all Contract charges 
(contracts may impose certain charges that are not reflected in the performance of the sub-
account, but reduce the value of an investment in the sub-account, such as optional benefit 
charges). State that performance would be lower if these charges were included. 

(3) Non-Standardized Performance Quotation. A Registered Separate Account may calculate 
performance using any other historical measure of performance (not subject to any prescribed 
method of computation) if the measurement reflects all elements of return. 

Item 25. Annuity Payments 

Describe the method for determining the amount of annuity payments if not described in the prospectus. 
In addition, describe how any change in the amount of a payment after the first payment is determined. 

Item 26. Financial Statements 

(a) Registered Separate Account. Provide financial statements of the Registered Separate Account. 

Instructions. Include, in a separate section, the financial statements and schedules required by 
Regulation S-X [17 CFR 210]. Financial statements of the Registered Separate Account may be limited 



 

to: 

(i) An audited balance sheet or statement of assets and liabilities as of the end of the most recent 
fiscal year; 

(ii) An audited statement of operations of the most recent fiscal year conforming to the requirements 
of rule 6-07 of Regulation S-X [17 CFR 210.6-07]; 

(iii) An audited statement of cash flows for the most recent fiscal year if necessary to comply with 
generally accepted accounting principles; and 

(iv) Audited statements of changes in net assets conforming to the requirements of rule 6-09 of 
Regulation S-X [17 CFR 210.6-09] for the two most recent fiscal years. 

(b) Insurance Company. Provide financial statements of the Insurance Company. 

Instructions: 

1. Include, in a separate section, the financial statements and schedules of the Insurance 
Company required by Regulation S-X. If the Insurance Company would not have to prepare 
financial statements in accordance with generally accepted accounting principles except for 
use in this registration statement or other registration statements filed on Forms N-3, N-4, or 
N-6, its financial statements may be prepared in accordance with statutory requirements. The 
Insurance Company’s financial statements must be prepared in accordance with generally 
accepted accounting principles if the Insurance Company prepares financial information in 
accordance with generally accepted accounting principles for use by the Insurance Company’s 
parent, as defined in rule 1-02(p) of Regulation S-X [17 CFR 210.1-02(p)], in any report under 
sections 13(a) and 15(d) of the Securities Exchange Act [15 U.S.C. 78m(a) and 78o(d)] or any 
registration statement filed under the Securities Act. 

2. All statements and schedules of the Insurance Company required by Regulation S-X, except for 
the consolidated balance sheets described in rule 3-01 of Regulation S-X [17 CFR 210.3-01], 
and any notes to these statements or schedules, may be omitted from Part B and instead 
included in Part C of the registration statement. If any of this information is omitted from Part B 
and included in Part C, the consolidated balance sheets included in Part B should be 
accompanied by a statement that additional financial information about the Insurance 
Company is available, without charge, upon request. When a request for the additional 
financial information is received, the Registrant should send the information within 3 business 
days of receipt of the request, by first-class mail or other means designed to ensure equally 
prompt delivery. 

1. Notwithstanding rule 3-12 of Regulation S-X [17 CFR 210.3-12], the financial statements of the 
Insurance Company need not be more current than as of the end of the most recent fiscal year 
of the Insurance Company. In addition, when the anticipated effective date of a registration 
statement falls within 90 days subsequent to the end of the fiscal year of the Insurance 
Company, the registration statement need not include financial statements of the Insurance 
Company more current than as of the end of the third fiscal quarter of the most recently 
completed fiscal year of the Insurance Company unless the audited financial statements for 
such fiscal year are available. The exceptions to rule 3-12 of Regulation S-X contained in this 
Instruction 3 do not apply when: 

(a) The Insurance Company’s financial statements have never been included in an effective 
registration statement under the Securities Act of a separate account that offers variable 
annuity contracts or variable life insurance contracts; or 



 

(b) The balance sheet of the Insurance Company at the end of either of the two most recent 
fiscal years included in response to this Item shows a combined capital and surplus, if a 
stock company, or an unassigned surplus, if a mutual company, of less than $2,500,000; 
or 

(c) The balance sheet of the Insurance Company at the end of a fiscal quarter within 135 days 
of the expected date of effectiveness under the Securities Act (or a fiscal quarter within 90 
days of filing if the registration statement is filed solely under the Investment Company Act) 
would show a combined capital surplus, if a stock company, or an unassigned surplus, if a 
mutual company, of less than $2,500,000. If two fiscal quarters end within the 135 day 
period, the Insurance Company may choose either for purposes of this test. 

Any interim financial statements required by this Item need not be comparative with financial statements 
for the same interim period of an earlier year. 

(c) Changes in and Disagreements with Accountants. For Contracts with Index-Linked Options, include 
the information required by Item 304 of Regulation S-K [17 CFR 229.304]. 

 



 

PART C - OTHER INFORMATION

Item 27. Exhibits 

Subject to General Instruction D regarding incorporation by reference and rule 483 under the Securities 
Act [17 CFR 230.483], file the exhibits listed below as part of the registration statement. Letter or 
number the exhibits in the sequence indicated and file copies rather than originals, unless otherwise 
required by rule 483. Reflect any exhibit incorporated by reference in the list below and identify the 
previously filed document containing the incorporated material. 

(a) Board of Directors Resolution. The resolution of the board of directors of the Insurance Company 
authorizing the establishment of the Registered Separate Account. 

(b) Custodian Agreements. All agreements for custody of securities and similar investments of the 
Registered Separate Account, including the schedule of remuneration. 

(c) Underwriting Contracts. Underwriting or distribution contracts between the Registered Separate 
Account or Insurance Company and a principal underwriter and agreements between principal 
underwriters or the Insurance Company and dealers. 

(d)  Contracts. The form of each Contract, including any riders or endorsements. 

(e) Applications. The form of application used with any Contract provided in response to (d) above. 

(f) Insurance Company’s Certificate of Incorporation and By-Laws. The Insurance Company’s current 
certificate of incorporation or other instrument of organization and by-laws and any related 
amendment. 

(g) Reinsurance Contracts. Any contract of reinsurance related to a Contract. 

(h) Participation Agreements. Any participation agreement or other contract relating to the investment by 
the Registered Separate Account in a Portfolio Company. 

(i) Administrative Contracts. Any contract relating to the performance of administrative services in 
connection with administering a Contract. 

(j) Other Material Contracts. Other material contracts not made in the ordinary course of business to be 
performed in whole or in part on or after the filing date of the registration statement. 

(k) Legal Opinion. An opinion and consent of counsel regarding the legality of the securities being 
registered, stating whether the securities will, when sold, be legally issued and represent binding 
obligations of the Insurance Company. 

(l) Other Opinions. Copies of any other opinions, appraisals, or rulings, and consents of their use relied 
on in preparing this registration statement and required by section 7 of the Securities Act [15 U.S.C. 
77g]. 

(m) Omitted Financial Statements. Financial statements omitted from Item 26. 

(n) Initial Capital Agreements. Any agreements or understandings made in consideration for providing 
the initial capital between or among the Registered Separate Account, Insurance Company, 
underwriter, or initial investors and written assurances from the Insurance Company or initial 
investors that purchases were made for investment purposes and not with the intention of redeeming 
or reselling.  



 

(o) Form of Initial Summary Prospectuses. The form of any Initial Summary Prospectus that the 
Registrant intends to use on or after the effective date of the registration statement, pursuant to rule 
498A under the Securities Act [17 CFR 230.498A]. 

(p) Power of attorney. Any power of attorney included pursuant to rule 483(b) under the Securities Act 
[17 CFR 230.483(b)]. 

(q) Letter Regarding Change in Certifying Accountant. For Contracts with Index-Linked Options, a letter 
from the Insurance Company’s former independent accountant regarding its concurrence or 
disagreement with the statements made by the Insurance Company in the registration statement 
concerning the resignation or dismissal as the Insurance Company’s principal accountant. 

Instructions. 

1. Schedules (or similar attachments) to the exhibits required by this Item are not required to be 
filed provided that they do not contain information material to an investment or voting decision 
and that information is not otherwise disclosed in the exhibit or the disclosure document. Each 
exhibit filed must contain a list briefly identifying the contents of all omitted schedules. 
Registrants need not prepare a separate list of omitted information if such information is 
already included within the exhibit in a manner that conveys the subject matter of the omitted 
schedules and attachments. In addition, the Registrant must provide a copy of any omitted 
schedule to the Commission or its staff upon request. 

2. The Registrant may redact information from exhibits required to be filed by this Item if 
disclosure of such information would constitute a clearly unwarranted invasion of personal 
privacy (e.g., disclosure of bank account numbers, social security numbers, home addresses 
and similar information). 

3. The Registrant may redact specific provisions or terms of exhibits required to be filed by 
paragraphs (g) and (j) of this Item if the Registrant customarily and actually treats that 
information as private or confidential and if the omitted information is not material. If it does 
so, the Registrant should mark the exhibit index to indicate that portions of the exhibit or 
exhibits have been omitted and include a prominent statement on the first page of the 
redacted exhibit that certain identified information has been excluded from the exhibit 
because it is both not material and the type that the Registrant treats as private or 
confidential. The Registrant also must include brackets indicating where the information is 
omitted from the filed version of the exhibit. If requested by the Commission or its staff, the 
Registrant must promptly provide on a supplemental basis an unredacted copy of the exhibit 
and its materiality and privacy or confidentiality analyses. Upon evaluation of the Registrant’s 
supplemental materials, the Commission or its staff may require the Registrant to amend its 
filing to include in the exhibit any previously redacted information that is not adequately 
supported by the Registrant’s analyses. The Registrant may request confidential treatment of 
the supplemental material submitted under this Instruction 3 pursuant to Rule 83 of the 
Commission’s Organizational Rules [17 CFR 200.83] while it is in the possession of the 
Commission or its staff. After completing its review of the supplemental information, the 
Commission or its staff will return or destroy it, if the Registrant complies with the procedures 
outlined in Rule 418 under the Securities Act [17 CFR 230.418]. 

4. Each exhibit identified in the exhibit index (other than an exhibit filed in eXtensible Business 
Reporting Language) must include an active link to an exhibit that is filed with the registration 
statement or, if the exhibit is incorporated by reference, an active hyperlink to the exhibit 
separately filed on EDGAR. If the registration statement is amended, each amendment must 
include active hyperlinks to the exhibits required with the amendment. 



 

5. Registrants are required to provide the Initial Summary Prospectus exhibits, as required by 
paragraph (o) of this Item, only in connection with the filing of an initial registration statement, 
or in connection with a pre-effective amendment or a post-effective amendment filed in 
accordance with paragraph (a) of rule 485 under the Securities Act [17 CFR 230.485(a)]. 
Registrants should add a legend clearly identifying the document as a form of Initial Summary 
Prospectus the Registrant intends to use on or after the effective date of the registration 
statement. 

Item 28. Directors and Officers of the Insurance Company 

Provide the following information about each director or officer of the Insurance Company: 

(1) 

Name and Principal Business Address 

(2) 

Positions and Offices with Insurance Company 

Instruction. Registrants are required to provide the above information only for officers or directors who are 
engaged directly or indirectly in activities relating to the Registered Separate Account or the Contracts, and 
for executive officers including the Insurance Company’s president, secretary, treasurer, and vice 
presidents who have authority to act as president in the president’s absence. 

Item 29. Persons Controlled by or Under Common Control with the Insurance Company or the Registered 
Separate Account 

Provide a list or diagram of all persons directly or indirectly controlled by or under common control with 
the Insurance Company or the Registered Separate Account. For any person controlled by another 
person, disclose the percentage of voting securities owned by the immediately controlling person or 
other basis of that person’s control. For each company, also provide the state or other sovereign power 
under the laws of which the company is organized. 

Instructions: 

1. Include the Registered Separate Account and the Insurance Company in the list or diagram and 
show the relationship of each company to the Registered Separate Account and Insurance 
Company and to the other companies named, using cross-references if a company is controlled 
through direct ownership of its securities by two or more persons. 

2. Indicate with appropriate symbols subsidiaries that file separate financial statements, 
subsidiaries included in consolidated financial statements, or unconsolidated subsidiaries 
included in group financial statements. Indicate for other subsidiaries why financial statements 
are not filed. 

Item 30. Indemnification 

State the general effect of any contract, arrangements, or statute under which any underwriter or 
affiliated person of the Registrant is insured or indemnified against any liability incurred in his or her 
official capacity, other than insurance provided by any underwriter or affiliated person for his or her own 
protection. 

Item 31. Principal Underwriters 

(a) Other Activity. State the name of each investment company (other than the Registered Separate 
Account) for which each principal underwriter currently distributing the Registrant’s securities also 



 

acts as a principal underwriter, Insurance Company, sponsor, or investment adviser. 

(b) Management. Provide the information required by the following table for each director, officer, or 
partner of each principal underwriter named in the response to Item 23: 

(1) 

Name and Principal Business Address 

(2) 

Positions and Offices with Underwriter 

Instruction. If a principal underwriter is the Insurance Company or an affiliate of the Insurance Company, 
and is also an insurance company, the above information for officers or directors need only be provided 
for officers or directors who are engaged directly or indirectly in activities relating to the Registered 
Separate Account or the Contracts, and for executive officers including the Insurance Company’s or its 
affiliate’s president, secretary, treasurer, and vice presidents who have authority to act as president in 
the president’s absence. 

(c) Compensation From the Registrant. Provide the information required by the following table for all 
commissions and other compensation received, directly or indirectly, from the Registrant during the 
Registrant’s last fiscal year by each principal underwriter: 

(1) 

Name of 
Principal 

Underwriter 

(2) 

Net Underwriting 
Discounts 

(3) 

Compensation on 
Redemption 

(4) 

Brokerage 
Commission 

(5) 

Other 
Compensation 

 

Instructions: 

1. Disclose the type of services rendered in consideration for the compensation listed under column 
(5). 

2. Information need not be given about the service of mailing proxies or periodic reports of the 
Registered Separate Account. 

3. Exclude information about bona fide contracts with the Registered Separate Account or the 
Insurance Company for outside legal or auditing services, or bona fide contracts for personal 
employment entered into with the Registered Separate Account or the Insurance Company in the 
ordinary course of business. 

4. Exclude information about any service for which total payments of less than $15,000 were made 
during each of the Registrant’s last three fiscal years. 

5. Exclude information about payments made under any agreement whereby another person 
contracts with the Registered Separate Account or the Insurance Company to perform as 
custodian or administrative or servicing agent. 

Item 31A. Information about Contracts with Index-Linked Options 

For any Contract with Index-Linked Options offered through this registration statement, provide the 
information required by the following table as of December 31 of the prior year:Name of the 
Contract 

Number of 
Contracts 

outstanding 

Total value 
attributable to 

the Index-
Linked Option 

Number of 
Contracts 

sold during 
the prior 
calendar 

year 

Gross 
premiums 
received 

during the 
prior calendar 

year 

Amount of 
Contract value 

redeemed 
during the 

prior calendar 
year 

Combination 
Contract 
(Yes/No) 

       
 

Instructions: 

1. In the case of group Contracts, each participant certificate should be counted as an individual 
Contract. 

2. “Total value attributable to the Index-Linked Option” means the sum of the Contract value in the 
Index-Linked Options of each individual Contract. For “Combination Contracts,” which for 
purposes of this Item are Contracts that offer Variable Options in addition to Index-Linked 
Options, exclude amounts allocated to the Registered Separate Account. 

Item 32. Location of Accounts and Records 

State the name and address of each person maintaining physical possession of each account, book, or 
other document, required to be maintained by the Registered Separate Account pursuant to section 
31(a) of the Investment Company Act [15 U.S.C. 80a-30(a)] and the rules under that section. 

Instruction. The Registered Separate Account may omit this information to the extent it is provided in its 
most recent report on Form N-CEN [17 CFR 274.101]. 

Item 33. Management Services 

Provide a summary of the substantive provisions of any management-related service contract not 
discussed in Part A or Part B, disclosing the parties to the contract and the total amount paid and by 
whom for the Registrant’s last three fiscal years. 

Instructions: 

1. The instructions to Item 21(b) shall also apply to this Item. 

2. Exclude information about any service provided for payments totaling less than $15,000 during 
each of the Registrant’s last three fiscal years. 

Item 34. Fee Representation and Undertakings 

(a) With regard to Variable Options, provide a representation of the Insurance Company that the fees and 
charges deducted under the Contracts, in the aggregate, are reasonable in relation to the services 
rendered, the expenses expected to be incurred, and the risks assumed by the Insurance Company. 

(b) With regard to Index-Linked Options, furnish the following undertakings in substantially the following 
form: 

1. To file, during any period in which offers or sales are being made, a post-effective amendment to 
the registration statement to include any prospectus required by section 10(a)(3) of the Securities 
Act; and 

2. That, for the purpose of determining any liability under the Securities Act, each such post-effective 



 

amendment shall be deemed to be a new registration statement relating to the securities offered 
therein, and the offering of such securities at that time shall be deemed to be the initial bona fide 
offering thereof. 



 

 
 

SIGNATURES 

 
Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, 
the Registrant (certifies that it meets all of the requirements for effectiveness of this registration 
statement under rule 485(b) under the Securities Act and) has duly caused this registration statement 
to be signed on its behalf by the undersigned, duly authorized, in the City of , and State of 
 , on this  day of , . 

 

________________________________________________ 
(Registered Separate Account) 

By  _____________________________________________ 
(Signature) 

________________________________________________ 
(Title) 

________________________________________________ 
(Insurance Company) 

By  _____________________________________________ 
(Name of Officer of Insurance Company) 

________________________________________________ 
(Title) 

 
Instruction: 

 
If the registration statement is being filed only under the Securities Act or under both the Securities 
Act and the Investment Company Act, it should be signed by both the Registered Separate Account 
and the Insurance Company, if applicable. If the registration statement is being filed only under the 
Investment Company Act, it should be signed only by the Registered Separate Account. 

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been 
signed by the following persons in the capacities and on the dates indicated. 

_________________ ________________________________________ ______________ 

Signature Title Date 



 

 
 

Appendix B—Form N-6 

Form N-6 

* * * * * 

Item 30. Exhibits 

* * * * * 

Instructions. 

 * * * 

 3. The Registrant may redact specific provisions or terms of exhibits required to be filed by 

paragraphs (g) and (j) of this Item if the Registrant customarily and actually treats that information as 

private. If it does so, the Registrant should mark the exhibit index to indicate that portions of the 

exhibit have been omitted and include a prominent statement on the first page of the redacted exhibit 

that certain identified information has been excluded from the exhibit because it is both not material 

and the type that the Registrant treats as private or confidential. The Registrant also must include 

brackets indicating where the information is omitted from the filed version of the exhibit.  

If requested by the Commission or its staff, the Registrant must promptly provide on a 

supplemental basis an unredacted copy of the exhibit and its materiality and privacy or confidentiality 

analyses. Upon evaluation of the Registrant’s supplemental materials, the Commission or its staff may 

require the Registrant to amend its filing to include in the exhibit any previously redacted information 

that is not adequately supported by the Registrant’s analyses. The Registrant may request confidential 

treatment of the supplemental material submitted under this Instruction 3 pursuant to rule 83 of the 

Commission’s Organizational Rules [17 CFR 200.83] while it is in the possession of the Commission 

or its staff. After completing its review of the supplemental information, the Commission or its staff 

will return or destroy it, if the Registrant complies with the procedures outlined in rule 418 under the 

Securities Act [17 CFR 230.418]. 

* * * * *  



 

 
 

Appendix C—Form 24F-2 

UNITED STATES 
SECURITIES AND EXCHANGE COMMISSION 

Washington, D.C. 20549 
 

FORM 24F-2 
Annual Notice of Securities Sold 
Pursuant to Rule 24f-2 under the 

Investment Company Act of 
1940 or Rule 456(e) under the 

Securities Act of 1933 
 

Read Instructions at end of this Form before preparing. 

 
1. Name and address of issuer: 

2. The name and EDGAR identifier of each series or class of securities for which this Form is filed.  
If the Form is being filed for all series and classes of securities of the issuer, check the box but do not list series 
or classes:  

3. Investment Company Act File Number: 

Securities Act File Number: 

4(a). Last day of fiscal year for which this Form is filed: 

4(b). Check box if this Form is being filed late (i.e., more than 90 calendar days after the end of  the 
issuer’s fiscal year). (See Instruction A.2) 

 

Note: If the Form is being filed late, interest must be paid on the registration fee due. 

4(c). Check box if this is the last time the issuer will be filing this Form. 



 

 
 

5. Calculation of registration fee (if calculating on a class-by-class or series-by-series basis, provide the EDGAR 
identifier for each such class or series): 

 
(i) Aggregate sale price of securities sold during the 

fiscal year pursuant to section 24(f) or rule 456(e): $ 

(ii) Aggregate price of securities redeemed or 
repurchased during the fiscal year: $   

 

(iii) Aggregate price of securities redeemed or 
repurchased during any prior fiscal year 
ending no earlier than the date the issuer 
became eligible to use this form that were 
not previously used to reduce registration  
fees payable to the Commission: $   

 

(iv) Total available redemption credits [add Items 5(ii) and 5(iii)]: -$ 
 

(v) Net sales -- if Item 5(i) is greater than Item 5(iv) 
[subtract Item 5(iv) from Item 5(i)]: $ 

  
(vi) Redemption credits available for use in future years $ (              )   

— if Item 5(i) is less than Item 5(iv) 
[subtract Item 5(iv) from Item 5(i)]: 

 

(vii) Multiplier for determining registration fee (See x
 Instruction C.9): 

 
(viii) Registration fee due [multiply Item 5(v) by Item =$

 5(vii)] (enter “0” if no fee is due): 
 

6. Interest due -- if this Form is being filed more than 90 days after the end of the issuer’s fiscal 
year (see Instruction D): 

 
+$   

 
 

7. Total of the amount of the registration fee due plus any interest due [line 5(viii) plus line 6]: 

          =$ 

 

 

 

 
 

8. Explanatory Notes (if any): The issuer may provide any information it believes would be helpful in 
understanding the information reported in response to any item of this Form. To the extent responses relate 
to a particular item, provide the item number(s), as applicable.  



 

 
 

SIGNATURES 
 

This report has been signed below by the following persons on behalf of the issuer and in the 
capacities and on the dates indicated. 

 
 

By (Signature and  Title)*   
 
 

 

Date      

 
*Please print the name and title of the signing officer below the 

signature. 



 

 

UNITED STATES 
SECURITIES AND EXCHANGE COMMISSION 

Washington, D.C. 20549 
 

FORM 24F-2 
Annual Notice of Securities Sold 

Pursuant to Rule 24f-2 under 
 the Investment Company Act of 1940 or  

Rule 456(e) under the Securities Act of 1933 
 

INSTRUCTIONS 

 
A. General 

 
1. This Form should be used by an open-end management investment company, closed-end management 
company that makes periodic repurchase offers pursuant to § 270.23c-3(b) of this chapter (an “interval fund”), face 
amount certificate company, or unit investment trust for annual filings required by rule 24f-2 under the Investment 
Company Act of 1940 [15 U.S.C. 80a] (“Investment Company Act”) or an issuer that offers registered index-linked 
annuity securities for annual filings required by rule 456 under the Securities Act of 1933 [15 U.S.C. 77a-aa] 
(“Securities Act”) (each an “issuer”). If the issuer has registered more than one class or series of securities that are 
required to be reported on this form on the same registration statement under the Securities Act, the issuer may file 
a single Form 24F-2 for those classes or series that have the same fiscal year end. Such an issuer may calculate its 
fees based on aggregate net sales of the series having the same fiscal year end. An issuer choosing to calculate 
registration fees on a class-by-class or series-by-series basis should make a single filing consisting of a separate 
Form 24F-2 for each class or series in a single EDGAR document. 

 
2. This Form must be filed within 90 calendar days after the end of the issuer’s fiscal year or, if the last day of the 
90 day period falls on Saturday, Sunday or a Federal holiday, the first business day thereafter. For example, a Form 
24F-2 for a fiscal year ending on June 30 must be filed no later than September 28. If September 28 falls on a Saturday 
or Sunday, the Form must be filed on the following Monday. In these instructions, we refer to this as the “Due Date.” 

 
3. Pursuant to rule 101(a)(1)(iv) of Regulation S-T [17 CFR 232.101(a)(1)(iv)] this Form must be submitted in 
electronic format using the Commission’s Electronic Data Gathering, Analysis, and Retrieval (“EDGAR”) system. 

 
4. This Form must be accompanied by the appropriate registration fee. If the Form is being filed late, interest must 
be paid. See Instruction D. 

 
5. This Form will be deemed filed with the Commission on the date on which it is received and accepted by the 
Commission. The Commission will not accept for filing any Form accompanied by insufficient payment of the 
registration fee. A Form accompanied by insufficient payment of the registration fee will not be deemed accepted 
and filed until receipt by the Commission of proper payment of the registration fee. No part of the registration fee is 
refundable. Issuers should refer to rule 111 of the Securities Act [17 CFR 230.111], rule 0-8 under the Investment 
Company Act [17 CFR 270.0-8], rule 3a of the Commission’s Rules of Informal and Other Procedures [17 CFR 
202.3a], and rule 13(c) under Regulation S-T [17 CFR 232.13(c)] for instructions on payment of fees to the 
Commission. 

 
B. Identifying Information 

 
1. Item 1 - Provide the name of the issuer as it appears on the cover of the issuer’s most recent Securities Act 
registration statement or post-effective amendment. 

 
2. Item 2 - If the Form is being filed for all classes and series of securities of the issuer, the issuer should check 
the box and not list the names of the classes and series. Issuers of registered index-linked annuities should check 
this box if the Form is being filled for all of the issuer’s registered index-linked annuity and classes. 

 
3. Item 3 - If applicable, the Investment Company Act file number should be the number assigned to the issuer’s 
registration statement filed under the Investment Company Act (beginning with “811-”). The Securities Act file 
number is the number of the issuer’s most recent Securities Act registration statement (beginning with “2-”, “33-” or 



 

 
 

“333-”) relating to the securities being reported (e.g., issuers of registered index-linked annuities should use the most 
recent registered index-linked annuity Securities Act registration statement being reported, but not any other 
intervening Securities Act registration statements relating to securities not being reported). 

 
4. Item 4(a) - In the case of an issuer that ceases operations, the date it ceases operations is deemed the last day 
of its fiscal year for purposes of section 24(f) of the Investment Company Act or rule 456(e) of the Securities Act. 

 
5. Item 4(b) - Check the box if the Form is filed late. If the issuer files the Form late, the issuer is required under 
section 24(f) or rule 456(e) to pay interest on unpaid amounts at the rate applicable to Treasury and tax loan 
accounts. See Instruction D. 
 
6. Item 4(c) - Check the box if this is the last time the issuer will be filing Form 24F-2 (i.e., if the issuer has ceased 
operations). 

 
C. Computation of Registration Fee 

 
1. Item 5 is a work sheet for calculating the registration fee due. An issuer must aggregate prices for all classes or 
series for which the Form is being filed. If the issuer charges a front-end sales load on its securities, the aggregate 
sale price must include the sales load. 

 
2. Mergers - 

 
(a) In the case of a liquidation, merger, or sale of all or substantially all of the assets of an issuer (“merger”), the 

securities of the entity ceasing operation (the “Predecessor”) that are exchanged for or converted into the other issuer 
(the “Successor”) should be treated as redemptions on the Predecessor’s final Form 24F-2 (not the Successor’s). 

 
(b) In the case of a merger in which the Predecessor is not deemed to cease operations (e.g., a reorganization), 

the Successor inherits the sales and redemption credits of the Predecessor, and the Successor must report them 
as sales and redemptions on its next Form 24F-2 filing. The Predecessor in this type of merger need not file a final 
Form 24F-2. See Rule 24f-2(b)(1) and (2) [17 CFR 270.24f-2(b)(1) and (2)] and rule 456(e)(4) [17 CFR 
230.456(e)(4)]. 

 
3. Special Rule for Unit Investment Trusts - The aggregate sale price of securities sold to a unit investment trust 
(“UIT”) that offers interests that are registered under the Securities Act and on which a registration fee has been or 
will be paid to the Commission, may be excluded from the aggregate sale price of securities reported in Item 5(i). If 
the issuer chooses to exclude the aggregate sale price of these securities from Item 5(i), the issuer may not use 
securities redeemed or repurchased from those UITs for purposes of determining the redemption or repurchase price 
of securities in Items 5(ii) and 5(iii). 
 
4. Special Rule for Registered Index-Linked Annuities - The aggregate sale price of securities sold during the 
fiscal year in reliance upon registration under rule 456(e) shall include the value of any expiring annuity contract or investment 
option that is rolled over into a new crediting period. The value of such contracts or options should therefore be reported in Item 
5(i). In addition, the value of such expiring annuity contract or options should also be reported in Item 5(ii) as a redemption. Where 
the contract value of the new and expiring annuity contract is the same, the reported amounts attributable to such contracts in Items 
5(i) and 5(ii) would result in a net-zero calculation. 

 
5. Item 5(i) - Report the aggregate sale price of securities sold during the fiscal year in reliance upon registration 
under section 24(f) or rule 456(e). Include securities issued pursuant to dividend reinvestment plans (“DRIP shares”) 
whether or not they are required to be registered under the Securities Act. Do not include the sale price of securities, 
if any, that were registered under the Securities Act other than pursuant to section 24(f) or rule 456(e), as applicable. 
[Example: An interval fund issuer sold 1,000,000 shares, 250,000 of which were registered prior to August 1, 2021. 
Item 5(i) should show the aggregate sale price of 750,000 shares.] 

 
6. Item 5(ii) - Report the aggregate redemption or repurchase price of securities redeemed or repurchased during 
the fiscal year in reliance upon registration under section 24(f) or rule 456(e). Do not include securities that have been 
redeemed or repurchased, if any, other than pursuant to section 24(f) or rule 456(e), as applicable. 

 
7. Item 5(iii) - Report the aggregate redemption or repurchase price of securities redeemed or repurchased during 
any prior fiscal year ending no earlier than the date the issuer became eligible to use this Form (e.g., August 1, 2021 
for interval funds, [EFFECTIVE DATE] for issuers of registered index-linked annuity securities, and October 11, 1995 
for all other filers on this Form) that were not used previously to reduce registration fees payable to the Commission. 



 

 
 

 
8. Items 5(iv) through 5(vi) - Report the sum of Items 5(ii) and 5(iii) in Item 5(iv). Subtract Item 5(iv) from Item 
5(i). If Item 5(iv) is less than Item 5(i), report the result in Item 5(v) (net sales). If Item 5(iv) is greater than Item 5(i), 
report the resulting negative number in parentheses in Item 5(vi) (net redemptions or repurchases). The amount of 
redemptions or repurchases reported in Item 5(vi) may be used by the issuer in future years to offset sales (by 
including it in response to Item 5(iii) of Form 24F-2 filed for the next fiscal year). 

 
 

9. Item 5(vii) - The registration fee is calculated by multiplying the net sales amount (Item 5(v)) by the fee rate. 
For the current fee rate, see https://www.sec.gov/ofm/Article/feeamt.html The fee rate in effect at the time of filing 
applies to all securities sold during the fiscal year, regardless of whether the fee rate changes during the year. 

 
10. Item 5(viii) - If the issuer reports net redemptions or repurchases in Item 5(vi), report “0” in Item 5(viii). 

 
D. Computation of Interest Due if Form is Filed Late 

 
1. Item 6 – Section 24(f) and rule 456(e) require any issuer that pays its registration fee after the Due Date (see 
Instruction A.2) to pay interest to the Commission on fees that are not paid on time. The payment of interest does 
not preclude the Commission from bringing an action to enforce the requirements of section 24(f) or rule 456(e), as 
applicable. Under section 11 of the Debt Collection Act [31 U.S.C. 3717(a)], the interest rate is published by the 
Secretary of the Treasury. The rate is computed annually and is effective on January 1 each year. In some 
circumstances the rate may be changed on a quarterly basis. Filers owing interest should verify the current interest 
rate. Filers can find the rate by looking for the “current value of funds rate” on the Treasury Department’s internet 
site at  https://fiscal.treasury.gov/reports-statements/cvfr/rates.html. 

 
2. The interest is assessed only on the amount of the registration fee due, and begins to accrue on the day after 
the Due Date. The amount of interest due should be calculated based on the interest rate in effect at the time the 
interest payment is made using the following formula: 

 
I = (X) (Y) (Z/365) 

 
where: 

 
I = Amount of interest due 
X = Amount of registration fee due 
Y = Applicable interest rate, expressed as a fraction 
Z = Number of days by which the registration fee payment is late 

 
E. Signature 

 
The Form must be signed on behalf of the issuer by an authorized officer of the issuer. See rule 302 of Regulation S-
T [17 CFR 232.302] regarding signatures on forms filed electronically. 

 
F. SEC’s Collection of Information 

 
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it 
displays a currently valid control number. Filing of this Form is mandatory. The principal purpose of this collection of 
information is to enable issuers to calculate the registration fee payable to the Commission. Any member of the 
public may direct to the Commission any comments concerning the accuracy of the burden estimate of this Form, and 
any suggestions for reducing this burden. This collection of information has been reviewed by the Office of 
Management and Budget in accordance with the clearance requirements of 44 U.S.C. 3507. The responses to the 
collection of information will not be kept confidential. 

  



 

 
 

Appendix D—Retail Investor Feedback Flyer 
 

Tell Us about Your Experiences with Registered Index-Linked Annuities and Other 
Annuity Products 

 
We are requesting input from retail investors regarding registered index-linked annuities 

(or “RILAs”), a type of annuity contract offered by insurance companies. In a RILA, the 

investor’s gains or losses are based on whether a selected index goes up or down over a set 

period of time, such as three years. These annuities also have what is called a “bounded return 

structure,” meaning that they will usually limit your losses when the index goes down, but at the 

cost of limiting your gains when the index goes up. We encourage interested persons to provide 

comments on any or all of the following questions. Please provide your comments on or before 

November 28, 2023 – and thank you for your feedback!  

Part 1: Have you purchased or considered purchasing any kind of annuity, including a 

RILA? If so: 

1. What were your reasons for either purchasing or not purchasing the annuity?  

Text box 

 

 

 

a. What features of the annuity appealed to you? 

Text box 

 

 

 

b. What were your investment goals?  



 

 
 

Text box 

 

 

 

c. What alternatives did you consider to the annuity, if any?  

Text box 

 

 

 

2. Where did you learn about the annuity? Did someone recommend it to you?   

Text box 

 

 

 

3. What kind of annuity did you consider purchasing? 

 Yes No 

Fixed annuity [   ] [   ] 

Variable annuity [   ] [   ] 

RILA [   ] [   ] 

Other type of annuity 
(please specify) 
 
 

[   ] [   ] 

 

4. What kind of annuity did you end up purchasing?  



 

 
 

 Yes No 

Fixed annuity [   ] [   ] 

Variable annuity [   ] [   ] 

RILA [   ] [   ] 

Other type of annuity 
(please specify) 
 
 

[   ] [   ] 

 

5. What documents or other materials did you use when considering the purchase?  

Text box 

 

 

 

a. Did you find those documents or materials easy or challenging to 

understand?  

Text box 

 

b. Which documents did you find to be more confusing? 

Text box 

c. Were the documents or materials at a reading level comfortable for you?  

Yes No 

[   ] [   ] 

 



 

 
 

Text box (please add any explanatory detail) 

 

 

d. Were those documents or materials helpful?  

Yes No 

[   ] [   ] 

 

Text box (please add any explanatory detail) 

 

 

 

e. What, if any, other information do you wish had been available?  

Text box 

 

 

 

f. If the annuity was a RILA, how well do you think that the documents you 

received explained the RILA’s features? 

Text box 

 

 

 



 

 
 

g. If the annuity was a RILA, do you think, based on the documents you 

received, you could explain all of the RILA’s features? 

Yes No 

[   ] [   ] 

 

Text box (please add any explanatory detail) 

 

 

 

Part 2: Have you purchased a RILA? A RILA is a type of annuity contract where the 

investor’s gains or losses are based on whether a selected index goes up or down over a 

set period of time subject to a bounded return structure. If so:   

6. Please describe your experience investing in the RILA. 

a. Has your experience with the RILA been consistent with your 

expectations for the RILA, based on any materials you read (or 

information that a financial professional told you) before purchasing the 

RILA? For example, if you purchased the RILA based on the expectation 

that it was a long-term investment and would allow you to participate to a 

degree in positive market performance while providing some protection 

against loss, was that your experience? Conversely, did you find that you 

ended up having to withdraw money early and lose some of the benefits 

you had anticipated?  

Yes No 



 

 
 

[   ] [   ] 

 

Text box (please add any explanatory detail) 

 

 

 

b. If you have withdrawn money from the RILA, did you pay fees or 

penalties?  

Yes No 

[   ] [   ] 

 

Text box (please add any explanatory detail) 

 

 

 

c. Were you aware when you purchased the RILA that withdrawals would be 

subject to such fees or penalties?  

Yes No 

[   ] [   ] 

 

Text box (please add any explanatory detail) 

 

 



 

 
 

 

Part 3: When you make investment decisions, what type of information do you want?  

7. When you select investments, what information sources do you most commonly 

read?  

 Yes No 

Prospectus [   ] [   ] 

Annual shareholder report [   ] [   ] 

Website of the investment product [   ] [   ] 

Other information source (please explain below) 
 
 

[   ] [   ] 

 

Text box (please add any explanatory detail, including any other information 

source not mentioned above) 

 

 

 

8. Do you prefer to rely on a recommendation from a financial professional?  

Yes No 

[   ] [   ] 

 

a. If you rely on a financial professional, do you also separately research the 

recommended investment?  

Yes No 



 

 
 

[   ] [   ] 

 

9. Do you prefer to receive short summary documents (with more detailed disclosures 

available for additional research)?  

Yes No 

[   ] [   ] 

 

a. If you answered “yes”:  

What do you consider an appropriate length for a summary?  

1-2 pages [   ] 

3-5 pages [   ] 

6-10 pages [   ] 

More than 10 pages [   ] 

 

What topics do you want the summary to include? For example, should the 
summary explain the investment being offered, any fees being charged, 
ways that you may not get the returns described, or the risks of the 
investment? 
 

Text box  

 

 

 
 
 
If an investment product offers different features you can select (such as 
the type of index it tracks or the time in which the investment lasts), how 
would you like to see the summary organized? For example:  
 



 

 
 

 Yes No 
A summary based on the decisions you will have to make 
when selecting among available features, and the 
implications of selecting various features?  
 

[   ] [   ] 

A summary of each feature of the investment product, to 
allow the reader to identify important information for a 
particular decision?  
 

[   ] [   ] 

Other (please add any explanatory detail) 

 

 

 

 

b. Please share any reasons you may prefer to receive a longer, more detailed 

disclosure document instead of a summary. 

Text box  

 

 

 
 

 

Part 4: Is there anything else you want to tell us about RILAs?  

Text box 

 

 

 

 

 



 

 
 

** 

Ways to Submit Your Feedback 
 
You can send us feedback in the following ways (include the file number S7-16-23 in your 
response): 
 
Print Your Responses and Mail 
 
Secretary  
Securities and Exchange Commission 
100 F Street, NE 
Washington, Dc 20549-1090 
 
Print Your Responses and Email 
 
Select a PDF printer to create a file you can email to: [email protected] 
 

Do not include personal identifiable information in submissions; you should submit only 

information that you wish to make available publicly. We may redact in part or withhold entirely 

from publication submitted material that is obscene or subject to copyright protection. 

If you are interested in more information on the proposal, or want to provide feedback on 

additional questions, please see the Commission’s proposing release, available at 

https://www.sec.gov/files/rules/proposed/2023/33-11250.pdf. Comments should be received on 

or before November 28, 2023. 

Thank you! 

https://www.sec.gov/files/rules/proposed/2023/33-11250.pdf

Conformed to Federal Register version 

SECURITIES AND EXCHANGE COMMISSION 

17 CFR Parts 230, 232, 239, and 274 

[Release No. 33-11250; 34-98624; IC-35028; File No. S7-16-23] 

RIN: 3235-AN30 

Registration for Index-Linked Annuities; Amendments to Form N-4 for Index-Linked and 

Variable Annuities 

AGENCY: Securities and Exchange Commission. 

ACTION: Proposed rule. 

SUMMARY: The Securities and Exchange Commission (“Commission”) is proposing rule and 

form amendments to provide a tailored form to register the offerings of registered index-linked 

annuities (“RILAs”). Specifically, the Commission is proposing to amend 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 

proposing to amend certain filing rules and make other related amendments. These changes 

would, if adopted, implement the requirements relating to RILAs contained in Division AA, Title 

I of the Consolidated Appropriations Act, 2023. Further, the Commission is proposing other 

amendments to Form N-4 that would apply to all issuers that would use that form under the 

proposal. The Commission is also proposing to apply to RILA advertisements and sales literature 

a current Commission rule that provides guidance as to when sales literature is materially 

misleading under the Federal securities laws. The Commission is proposing a technical 

amendment to Form N-6 to correct an error from a prior Commission rulemaking. Finally, the 



2 

Commission requests comment as to whether to require the registration of market-value 

adjustments associated with certain annuities on Form N-4 as well. 

DATES: Comments should be submitted on or before November 28, 2023. 

ADDRESSES: Comments may be submitted by any of the following methods: 

Electronic Comments: 

• Use the Commission’s internet comment form (https://www.sec.gov/rules/2023/09/rila); 

or  

• Send an email to [email protected]. Please include File Number S7-16-23 on the 

subject line. 

Paper Comments: 

• Send paper comments to Secretary, Securities and Exchange Commission, 100 F Street 

NE, Washington, DC 20549-1090. 

All submissions should refer to File Number S7-16-23. This file number should be 

included on the subject line if email is used. To help the Commission process and review your 

comments more efficiently, please use only one method of submission. The Commission will 

post all comments on the Commission’s website (https://www.sec.gov/rules/2023/09/rila). 

Comments are also available for website viewing and printing in the Commission’s Public 

Reference Room, 100 F Street NE, Washington, DC 20549, on official business days between 

the hours of 10 a.m. and 3 p.m. Operating conditions may limit access to the Commission’s 

public reference room. Do not include personal identifiable information in submissions; you 

should submit only information that you wish to make available publicly. We may redact in part 

or withhold entirely from publication submitted material that is obscene or subject to copyright 

https://www.sec.gov/rules/2023/09/rila
https://www.sec.gov/rules/2023/09/rila


3 

protection. Retail investors seeking to comment on their experiences with annuities generally and 

RILAs in particular may want to submit a short Feedback Flyer, available at Appendix D. 

Studies, memoranda, or other substantive items may be added by the Commission or staff 

to the comment file during this rulemaking. A notification of the inclusion in the comment file of 

any such materials will be made available on the Commission’s website. To ensure direct 

electronic receipt of such notifications, sign up through the “Stay Connected” option at 

www.sec.gov to receive notifications by email. 

A summary of the proposal of not more than 100 words is posted on the Commission’s 

website (https://www.sec.gov/rules/2023/09/rila). 

FOR FURTHER INFORMATION CONTACT: Christian Corkery, Michael Khalil, Rachael 

Hoffman, James Maclean, Amy Miller, or Laura Harper Powell, 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; 

Elisabeth Bentzinger or Min Oh, Senior Counsels; Michael Kosoff, Senior Special Counsel, 

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. 

SUPPLEMENTARY INFORMATION: The Commission is proposing amendments to the 

following rules and forms:  

Commission Reference CFR Citation (17 CFR) 
Securities Act of 1933 (“Securities Act”)1 

Rule 156 §230.156 
Rule 172 §230.172 
Rule 405 §230.405 

 

1  15 U.S.C. 77a et seq. 

https://www.sec.gov/files/rules/proposed/2023/rila-feedback-flyer.pdf
https://www.sec.gov/rules/2023/09/rila


4 

Commission Reference CFR Citation (17 CFR) 
Rule 415 §230.415 
Rule 424 §230.424 
Rule 456 §230.456 
Rule 457 §230.457 
Rule 485 §230.485 
Rule 497 §230.497 

Rule 498A §230.498A 
Regulation S-T 

Rule 313 of Regulation S-T §232.313 
Rule 405 of Regulation S-T §232.405 

Forms 
Form N-4 §239.17b and 274.11c 
Form N-6 §239.17c and 274.11d 

Form 24F-2 §239.66 and §274.24 

TABLE OF CONTENTS 

I. Introduction and Background ....................................................................................................5 
A. Typical RILA Features ........................................................................................................9 
B. Current Registration Process..............................................................................................14 
C. Evidence of Investor Views and Areas of Potential Confusion .........................................19 
D. Overview of Proposal ........................................................................................................28 

II. Discussion ................................................................................................................................29 
A. Use of Form N-4 ................................................................................................................29 
B. Contents of Form N-4 ........................................................................................................35 

1. Front and Back Cover Pages (Item 1) ..........................................................................37 
2. Key Information Table (Item 3) ...................................................................................41 
3. Principal Disclosure Regarding RILAs (Items 2, 6, and 17) .......................................69 
4. Principal Risks of Investing in the Contract (Item 5) ................................................105 
5. Addition of Contract Adjustments and Other Amendments to Fee and Expense 

Disclosures (Items 4, 7, and 22).................................................................................113 
6. Information about Contracts with Index-Linked Options (Item 31A) .......................125 
7. Other Amendments and Provisions ...........................................................................128 
8. Remaining Form N-4 Items .......................................................................................141 
9. Inline XBRL...............................................................................................................152 

C. Option to Use a Summary Prospectus .............................................................................158 
D. Accounting (Items 16 and 26) ..........................................................................................180 
E. Filing and Prospectus Delivery Rules ..............................................................................185 

1. Fee Payment Method and Amendments to Form 24F-2 ............................................185 
2. Post-Effective Amendments and Prospectus Supplements........................................191 
3. Prospectus Delivery ...................................................................................................196 

F. Materially Misleading Statements in RILA Sales Literature ...........................................198 
G. Existing Commission Letters ...........................................................................................205 
H. Registered Market-Value Adjustment Annuities .............................................................207 



5 

I. Technical Amendment to Form N-6 ................................................................................211 
J. Compliance Period ...........................................................................................................212 
K. General Request for Comment from Retail Investors......................................................214 

III. Economic Analysis ................................................................................................................215 
A. Introduction ......................................................................................................................215 
B. Baseline ............................................................................................................................218 

1. Affected Parties ..........................................................................................................218 
2. Current Regulatory Requirements .............................................................................225 
3. Market Practice ..........................................................................................................228 

C. Benefits and Costs............................................................................................................237 
1. Benefits ......................................................................................................................237 
2. Costs ...........................................................................................................................262 

D. Effects on Efficiency, Competition, and Capital Formation ............................................272 
E. Reasonable Alternatives...................................................................................................277 

1. Creating an Entirely New Registration Form for RILAs ...........................................277 
2. Alternatives to Specific Form N-4 Amendments.......................................................279 
3. Require the Use of Form N-4 for Registered MVAs .................................................281 
4. Limiting Scope of Structured Data Requirements .....................................................283 

F. Request for Comment ......................................................................................................284 
IV. Paperwork Reduction Act ......................................................................................................289 

A. Rule 498A ........................................................................................................................290 
B. Form N-4 ..........................................................................................................................293 
C. Form 24F-2 ......................................................................................................................296 
D. Investment Company Interactive Data .............................................................................298 
E. Request for Comment ......................................................................................................301 

V. Regulatory Flexibility Certification .......................................................................................302 
VI. Consideration of Impact on the Economy .............................................................................306 
Statutory Authority ......................................................................................................................306 

 

I. INTRODUCTION AND BACKGROUND 

An annuity contract (“annuity” or “contract”) is a type of insurance product in which an 

investor makes a lump-sum payment or a series of payments in return for future payments from 

the insurance company to meet retirement and other long-term financial goals. A RILA is one of 

several types of annuity contracts offered by insurance companies. An investor in a RILA 

allocates purchase payments to one or more investment options under which the investor’s 

returns (both gains and losses) are based at least in part on the performance of an index or other 



6 

benchmark (collectively, “indexes”), over a set period of time (“crediting period”).2 In some 

cases, insurance companies offer RILAs on a standalone basis with various index-linked 

investment options (“index-linked options”) for investors to choose from. In other cases, 

insurance companies offer “combination” annuity contracts that provide index-linked options 

together with other investment options, such as mutual funds (“portfolio companies”) offered as 

investment options under a variable annuity (“variable options”).3 An investor purchasing a 

combination contract, for example, may have the ability to allocate purchase payments under the 

contract to index-linked options; variable options that pass on the returns of mutual funds 

selected by the investor; and/or fixed account options for which the insurance company promises 

to pay a fixed and stated minimum rate of interest. The market for RILAs has grown 

significantly in recent years, with annual RILA sales of $41.1 billion in 2022 alone, more than 

 

2  Insurance companies frequently refer to crediting periods as “investment terms” or sometimes simply 
“terms.” See, e.g., Investor Testing Report on Registered Index Linked Annuities, Office of Investor 
Advocate Division (“OIAD Report”) at Section 2, RILAs: Structure of Contracts and Investment Options, 
Investment Terms. As noted in OIAD’s report, investor testing suggested that investors consistently 
struggled with this terminology, and a number of participants seemed to equate “investment term” or 
“term” with the length of the insurance contract rather than the length of the investment product options 
within the RILA contract, leading them to misunderstand the operation of the RILA. Id. at Section 5, 
Qualitative Testing, Results from Round 1. In an effort to mitigate that confusion, we have opted to use the 
term crediting period in this release and in the proposed amendments to Form N-4. The most common 
crediting periods are one, three, and six years. See id. at Section 3, Overview of the RILA Market and 
Simulated Performance over Historical Periods, RILA Indexes, Investment Terms, and Insurance Features, 
Figure 2. 

3  Variable annuity contracts and variable life insurance contracts (together, “variable contracts”) combine 
both investment and insurance features. Investors generally allocate their purchase payments to a range of 
investment options, typically mutual funds which are separately registered and have their own 
prospectuses. The investor’s account value changes depending on the performance of the investment 
options selected. Variable annuities allow investors to receive periodic payments for either a definite period 
(e.g., 20 years), or for an indefinite period (e.g., the life of the investor). See Updated Disclosure 
Requirements and Summary Prospectus for Variable Annuity and Variable Life Insurance Contracts, 
Investment Company Act Release No. 33814 (Mar. 11, 2020) [85 FR 25964 (May 1, 2020)] (“VASP 
Adopting Release”) at nn.4-5 and n.8 and accompanying text. 



7 

tripling since 2017.4 We understand that RILAs are predominantly sold by broker-dealers, 

although investment advisers may also provide advice on RILAs, and insurance companies also 

may offer RILAs directly.  

RILAs are securities for purposes of the Securities Act of 1933 (“Securities Act”).5 

Unlike variable annuity contracts for which the Commission has adopted a specific registration 

form tailored to those products, insurance companies currently register offerings of RILAs on 

Securities Act registration Forms S-1 or S-3.6 In 2022, Congress enacted Division AA, Title I of 

the Consolidated Appropriations Act, 2023 (“RILA Act”), directing the Commission to adopt a 

new registration form for RILAs within 18 months of enactment.7 The RILA Act requires the 

 

4  See LIMRA, “LIMRA: Record Annuity Sales in 2022 Expected to Continue Into First Quarter 2023,” news 
release, Mar. 8, 2023 (reporting 2022 RILA sales of $41.1 billion), 
https://www.limra.com/en/newsroom/news-releases/2023/limra-record-annuity-sales-in-2022-expected-to-
continue-into-first-quarter-2023/ and LIMRA, “LIMRA Secure Retirement Institute: Total Annuity Sales 
Continued to Decline in 2017,” news release, Feb. 21, 2018 (reporting 2017 sales of structured annuity 
products, i.e., RILAs, of $9.2 billion), https://www.limra.com/en/newsroom/news-releases/2018/limra-
secure-retirement-institute-total-annuity-sales-continued-to-decline-in-2017/.  

5 Depending on the context, “RILA” is also used in this release to collectively refer to both stand-alone 
RILAs and the index-linked options available in a combination contract. When referring to the entity 
registering the RILA, we use the term “RILA issuer” or “insurance company.” Index annuities that meet 
the requirements of section 989J of the Dodd-Frank Wall Street Reform and Consumer Protection Act 
(Pub. L. No. 111-203) or section 3(a)(8) of the Securities Act are treated as exempt securities for purposes 
of the Securities Act, but RILAs do not fall within this exemption due, in large part, to the shifting of a 
significant level of investment risk from the RILA issuer to the investor. RILAs and index-linked option, as 
used in this release, refer only to those index annuities that are securities for the purposes of the Securities 
Act. See, e.g., sections 101(a)(5) and (6) of Division AA, Title I of the Consolidated Appropriations Act, 
2023. 

6 The registration forms for variable annuity contracts are Form N-3 (for variable annuity separate accounts 
structured as management companies) and Form N-4 (for variable annuity separate accounts structured as 
unit investment trusts). The separate account established by the sponsoring insurance company is the legal 
entity that registers its securities. Separate accounts are typically registered as investment companies under 
the Investment Company Act. See section 2(a)(37) of the Investment Company Act. The Commission first 
adopted the registration form for variable annuities over 30 years ago. See Registration Forms for Insurance 
Company Separate Accounts that Offer Variable Annuity Contracts, Investment Company Act Release No. 
14575 (June 14, 1985) [50 FR 26145] (June 25, 1985)]. In this release, we focus only on Form N-4, and not 
Form N-3, because Form N-4 is the registration form identified in the RILA Act and the form used to 
register the majority of variable annuity contracts.  

7  Pub. L. 117-328; 136 Stat. 4459 (Dec. 29, 2022). 

https://www.limra.com/en/newsroom/news-releases/2023/limra-record-annuity-sales-in-2022-expected-to-continue-into-first-quarter-2023/
https://www.limra.com/en/newsroom/news-releases/2023/limra-record-annuity-sales-in-2022-expected-to-continue-into-first-quarter-2023/
https://www.limra.com/en/newsroom/news-releases/2018/limra-secure-retirement-institute-total-annuity-sales-continued-to-decline-in-2017/
https://www.limra.com/en/newsroom/news-releases/2018/limra-secure-retirement-institute-total-annuity-sales-continued-to-decline-in-2017/


8 

Commission to design the form to ensure that a purchaser using the form receives the 

information necessary to make knowledgeable decisions, taking into account (1) the availability 

of information; (2) the knowledge and sophistication of that class of purchasers; (3) the 

complexity of the RILA; and (4) any other factor the Commission determines appropriate. The 

RILA Act also requires the Commission to engage in investor testing as part of its rulemaking 

process and to incorporate the results of the 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. If the 

Commission fails to adopt the form within 18 months of enactment, the RILA Act provides that 

RILA issuers can begin registering RILA offerings on existing Form N-4. 

We are proposing to amend Form N-4 to require RILA issuers to register RILA offerings, 

including associated features of the RILA such as any contract adjustments, on that form and to 

tailor the form’s requirements accordingly.8 We also are proposing to amend other rules related 

to the securities offering process to allow these issuers to conduct RILA offerings in the same 

way issuers conduct offerings of variable annuities. Consistent with the RILA Act, these 

proposed amendments collectively are designed to provide investors disclosures tailored to 

RILAs and highlight key information about these complex products, building on the 

Commission’s layered disclosure framework in place for variable annuities. We are also 

proposing certain amendments to Form N-4 that would apply to offerings of variable annuities, 

based on our experience with the form since its last amendment and the investor testing 

 

8  Under this proposal, the amended Form N-4 will not register the RILA issuers themselves, only the 
offering of RILA securities. Unlike separate accounts which register variable annuities, RILA issuers are 
not investment companies, and thus need not register with the Commission as an investment company as 
separate accounts do. 



9 

conducted in connection with this rulemaking.9 In addition, we are proposing to apply a current 

Commission rule that provides guidance as to when sales literature is materially misleading 

under the Federal securities laws to RILA advertisements and sales literature. Finally, we are 

proposing a technical amendment to Form N-6 to correct an error from a prior Commission 

rulemaking. 

A. Typical RILA Features 

RILAs are complex financial products that are sold to retail investors. The following are 

some of the most prevalent features that contribute to this complexity, and that might make it 

challenging for an investor to assess the features, risks, and possible return profile of a RILA. 

These features also are important ones for financial professionals to consider when 

recommending that an investor purchase a RILA. 

• Bounded Return Structure. Under a RILA, the insurance company will credit positive 

or negative “interest” to the investor’s contract value at the end of each crediting 

period. The amount credited is based, in part, on the performance of the specified 

index (e.g., the S&P 500).10 The amount of any positive interest credited will also 

depend on whether the contract includes provisions such as a “cap rate” or 

“participation rate.” A cap rate places an upper limit on an investor’s ability to 

participate in the index’s upside performance directly (e.g., with a current cap rate of 

5%, if the index is up 10% at the end of the crediting period, the investor’s contract 

value will be credited with only 5% positive interest). A “participation rate” sets an 

 

9  See VASP Adopting Release. 
10  Insurance companies typically choose indexes for the RILA contract where any gains in the value of the 

index do not include dividends paid on the securities that make up the index. 



10 

investor’s return to some specified percentage of the index’s return (e.g., an 80% 

participation rate would result in an investor receiving positive interest of 80 cents on 

the dollar of gains in the index). The contract generally will include one of these 

limits on how much the insurance company will credit the investor if the performance 

of the index goes up in value by the end of the crediting period (collectively “limits 

on gains”). Similarly, the contract generally will include terms limiting the investor’s 

losses to some extent if the performance of the index goes down in value. This might 

include a “buffer” (which limits the investor’s exposure to losses up to a fixed 

percentage), or a “floor” (which places a lower limit on the investor’s exposure to 

loss) (collectively “limits on losses”). For example, with a “buffer” of -5%, if the 

index is down 2%, that investor will not lose anything, but if the index is down 7% 

the investor will lose 2% (the difference between the loss and the buffer rate). With a 

“floor” of -5%, if the index is down 2%, the investor will lose 2%, but if the index is 

down 7%, the investor will only lose 5%. These limits can be complex and 

overlapping, and may change at the beginning of each new crediting period, subject 

to certain minimum guarantees stated in the contract. Over time, the investor’s 

contract value will increase or decrease, depending on the performance of the index 

and the particular contract provisions (such as the bounded return structure). Despite 

the bounded return structure, a RILA is not necessarily a low-risk investment product 

as the investor could lose a significant amount of money if the index performs poorly. 

• Fees and Expenses. For many RILAs, the investor pays no direct or explicit ongoing 

fees and expenses under the RILA, and this is sometimes a feature disclosed in RILA 

marketing materials. However, the RILA’s bounded return structure requires 



11 

investors to agree to tradeoffs that come with their own economic costs. In exchange 

for some protection against losses if the index goes down in value, investors must 

also agree to contractual provisions limiting the amount of gains they will receive if 

the index goes up in value. A RILA’s upside limits on gains can reduce an investor’s 

return in the same way that a direct fee can and can help make the RILA more 

profitable to the insurance company.  

• Charges and Penalties for Early Withdrawals. Investors also can lose significant 

money if they withdraw their money early from an investment option or from the 

contract. This can arise in several circumstances. First, a RILA typically will specify 

a period of time during which a “surrender charge” will apply, for example nine years 

following an investor’s last premium payment. Typically, this charge is greatest in the 

first year of the surrender period, decreasing each year until the end of the surrender 

period. An investor who withdraws money during this period will pay a fee, such as 

9% of the amount withdrawn. Second, an insurance company may make an 

adjustment, either to the investor’s contract value or to the amount paid to the 

investor, if amounts are withdrawn from an index-linked option before the end of its 

crediting period or from the contract before the end of a specified period. For 

example, when an investor in a RILA chooses a particular index-linked option, the 

RILA may provide that the index-linked option’s crediting period is one year. If 

amounts are removed from that index-linked option before the end of this one-year 

crediting period, typically for any reason, the insurance company will apply an 

“interim value adjustment” or “IVA.” The IVA will adjust the contract value based, 

generally, on a complex formula where the IVA may change daily and can be positive 



12 

or negative.11 As a result, the investor could lose a significant amount of money, even 

if the index has a gain at the time of the withdrawal.  

Similarly, the insurance company might apply a positive or negative “market value 

adjustment” or “MVA” (collectively with IVAs, a “contract adjustment”) to the 

contract value if the investor partially or fully withdraws amounts from the contract. 

Contract adjustments could be made in response to a number of contract transactions, 

such as a surrender, withdrawal, payment of the death benefit, or the start of annuity 

payments, and an investor could experience a negative contract adjustment even when 

the investor takes an otherwise permissible withdrawal, such as under a guaranteed 

living benefit.12 These adjustments can also negatively impact other values under the 

contract, such as the surrender value and death benefit. Moreover, these fees and 

adjustments are not always mutually exclusive. Indeed, under the terms of certain 

RILA contracts, an investor could experience a decrease in contract value from a 

negative interim value adjustment and a negative market value adjustment, depending 

on the timing of the withdrawal, and also pay a surrender charge. An investor may 

 

11  Common methods of calculating this adjustment include prorating the crediting method based on the 
number of days that have elapsed since the start of the crediting period, employing a market-based formula 
designed to approximate the present value of the index and/or employing interest-rate-based MVAs to 
offset certain insurer losses and costs, or some combination of these two. See Clifford E. Kirsch, Variable 
Annuities and Other Insurance Investment Products (Third Edition 2022) at 29-8, available at 
https://plus.pli.edu/Details/Details?start=0&rows=50&fq=%7e2B%7etitle_id%7e3A282B22%7e240085%7
e2229%7e&fq=%7e2B%7eid%7e3A282B22%7e240085-
CH29%7e2229%7e&sort=s_date+desc&origin=title. 

12  Id. at 29-13. Under these benefits, RILA investors are permitted to take a certain amount of guaranteed 
withdrawals from their contract each year without reducing the value of guaranteed withdrawals for future 
years. These can be a standard feature or an optional rider chosen by an investor. Id. at 29-12. 



13 

also be subject to income taxes and face a Federal income tax penalty if the investor 

withdraws money before a certain age.13  

• Changes by Insurer. Crediting periods for an index-linked option in a RILA contract 

generally range from one to six years. The insurance company may change or remove 

key features of index-linked options, such as the cap rates, floors, or even change the 

index. These changes may often be made at the insurance company’s discretion and 

renewal provisions can and do change over time. Also, RILA contracts typically state 

that an investor will be automatically renewed at the end of a crediting period into the 

same or substantially similar index-linked option, often with a new limit on gains. If 

the same index-linked option is unavailable, the terms of the contract generally 

provide that the insurance company may place the investor into a more conservative 

investment option as a default, such as a fixed account or an index-linked option with 

a 0% floor. 

• Taxes. Special tax rules generally apply to RILAs and other annuities, with both tax 

advantages and potential adverse tax impacts in certain circumstances. For example, 

assets within a RILA generally grow tax-deferred. As discussed above, however, 

investors may face a Federal income tax penalty if money is withdrawn before the 

investor reaches a certain age.14 

 

13 See Updated Investor Bulletin: Indexed Annuities, SEC’s Office of Investor Education and Advocacy, July 
31, 2020, https://www.sec.gov/oiea/investor-alerts-and-bulletins/ib_indexedannuities. Staff reports and 
other staff documents (including those cited herein) represent the views of Commission staff and are not a 
rule, regulation, or statement of the Commission. The Commission has neither approved nor disapproved 
the content of these documents and, like all staff statements, they have no legal force or effect, do not alter 
or amend applicable law, and create no new or additional obligations for any person.  

14  For these and other reasons, insurance companies generally advertise RILAs as a long-term investment. 
This is similar to the treatment of variable annuities. See VASP Adopting Release at n.14 and 
accompanying text. 

https://www.sec.gov/oiea/investor-alerts-and-bulletins/ib_indexedannuities


14 

Providing investors with key information is particularly important in the context of 

RILAs, since their features are typically complex and their risks may not be apparent or easily 

understood by prospective investors absent clear disclosure. Form N-4’s existing disclosure 

requirements regarding features of annuities would complement the proposed RILA-specific 

disclosures, such that the amended Form N-4 would provide investors with key information both 

about the annuity contract and the associated registered index-linked or variable investment 

options. 

B. Current Registration Process 

The current requirements for issuers offering RILAs and variable annuities differ in many 

respects, both in terms of the disclosure issuers must provide, and with respect to the registration 

process. We highlight here some of these key differences.  

On required disclosure, because the Commission currently does not have a specific 

registration form for RILAs, insurance companies register the offerings of RILAs on Forms S-1 

or S-3.15 Although specific disclosure requirements apply for certain securities such as capital 

stock or debt, the forms’ disclosure requirements are not specifically tailored to particular kinds 

of securities given the wide range of securities offerings that can be registered on the forms.16 

Forms S-1 and S-3 thus do not include specific line-item requirements addressing disclosures 

about RILAs and their complex features, such as how limits on gains operate or the application 

of contract adjustments. These forms also require issuers to disclose information about the 

 

15  See, e.g., General Instruction I of Form S-1 (“This Form shall be used for the registration under the 
Securities Act of 1933 (‘Securities Act’); of securities of all registrants for which no other form is 
authorized or prescribed”). 

16  See Item 9 of Forms S-1 and S-3 and 17 CFR 229.202 (providing specific disclosure requirements for 
certain securities such as capital stock, debt, warrants or rights, and directing issuers of other types of 
securities to include a brief description that is comparable to that required for the specified kinds of 
securities). 



15 

offering itself as well as extensive information about the registrant issuing the securities that may 

be less material to a RILA investor than information about the contract’s features. Required 

information about the registrant includes, for example, management’s discussion and analysis of 

financial condition and results of operations (“MD&A”), which requires a narrative discussion of 

the registrant’s financial statements, and disclosure about executive compensation. Domestic 

registrants also must include financial statements prepared in accordance with U.S. generally 

accepted accounting principles (“GAAP”).17 

Most variable annuities, in contrast, are registered on Form N-4.18 This form is designed 

for variable annuities and has disclosure requirements tailored to these investments. Providing 

investors with key information in a reader-friendly format is particularly important in the context 

of variable annuity contracts because their structure is complex. Accordingly, Form N-4’s 

disclosure requirements are designed to provide investors with key information relating to a 

variable contract’s provisions, benefits, and risks in a concise and reader-friendly presentation, 

along with targeted information about the insurance company and the offering. Form N-4’s 

disclosure requirements thus focus more on the specific features of variable annuities than on the 

issuing insurance company. This presentation is designed to highlight the most important 

information for an investor in a variable annuity, so that the only matters included in the 

prospectus are those for which there is a substantial likelihood that a reasonable investor would 

 

17  See 17 CFR 210.4-01(a)(1) (stating that financial statements filed with the Commission which are not 
prepared in accordance with GAAP will be presumed to be misleading or inaccurate unless the 
Commission has otherwise provided). See also infra footnote 20. 

18  According to Form N-CEN filings received through March 23, 2023, there were 419 variable annuity 
separate accounts registered as unit investment trusts (“UITs”) in 2022. 



16 

consider them important in deciding whether to invest.19 This focus on the provisions of the 

variable contract itself, rather than certain details about the operation of the insurance company, 

reflects that a variable annuity contract is not a direct investment in the capital stock or debt of 

the insurance company, but rather a contract with the insurance company under which the 

investor’s exposure to the insurance company generally is limited to the company’s ability to 

honor any guarantees associated with the contract. In addition, rule 498A together with Form N-

4 implements a layered disclosure approach for variable annuities by permitting insurance 

companies and others to use a summary prospectus framework for variable annuities while 

making the more-detailed statutory prospectus, as well as the contract’s statement of additional 

information (“SAI”), available online. Form N-4 also provides a limited exception for insurance 

companies to file financial statements prepared in accordance with statutory accounting 

principles (“SAP”), referred to as “statutory requirements” in the form instructions, rather than 

GAAP. Specifically, insurance companies, which act as the depositors of variable annuity 

separate accounts registered on Form N-4, may use SAP financials solely when the insurance 

company does not otherwise prepare GAAP financial statements or GAAP financial information 

 

19  The Commission has long sought to tailor disclosures for annuity products. See Registration Forms for 
Insurance Company Separate Accounts, Investment Company Act Release No. 13689 (Dec. 23, 1983) [49 
FR 614 (Jan. 5, 1984)] (“Form[] N-4 would permit shorter and simpler prospectuses than are required 
under current practice,... by incorporating many of the reduced disclosure requirements of Form N-1A. 
Separate account disclosure requirements that experience has shown are unnecessary also would be 
eliminated, as well as certain disclosure requirements that are holdovers from the requirements applicable 
to non-separate account unit investment trust.”); Registration Form Used By Open-End Management 
Investment Companies, Investment Company Act Release No. 12927 (Dec. 27, 1982) [48 FR 813 (Jan. 7, 
1983)] (“In order to shorten and simplify the prospectus for mutual funds, the Commission has concluded 
that it is necessary to eliminate certain types of information from the prospectus, so that only matters of 
fundamental importance to most mutual fund investors will be included in the prospectus”). 



17 

for use by a parent in the parent’s Securities Exchange Act of 1934 (“Exchange Act”) reports or 

the parent’s registration statements filed under the Securities Act.20  

With respect to the registration process, insurance companies registering an offering of 

RILA securities are required under the Securities Act to pay a registration fee to the Commission 

at the time of filing a registration statement.21 This means that they pay registration fees at the 

time they register the offer and sale of the securities, regardless of when (or if) they sell them. 

The registration statement for the RILA offering also must include current financial information, 

including any annual update required by section 10(a)(3) of the Securities Act.22 An insurance 

company registering a RILA offering on Form S-1 must provide any section 10(a)(3) update to 

 

20  See, e.g., Instruction 1 to Item 31(b) in Form N-3 and Instruction 1 to Item 26(b) in Form N-4. In addition, 
although Form S-1 requires GAAP financial statements, exemptions have been granted pursuant to 17 CFR 
210.3-13 that permit insurance companies to substitute SAP financials in lieu of GAAP financials when 
registering RILAs on Form S-1 in circumstances permitted by Form N-4. See, e.g., Letter from Jenson 
Wayne, Chief Accountant, Division of Investment Management, to Stephen E. Roth, Eversheds Sutherland 
(US) LLP, regarding Fidelity & Guaranty Life Insurance Company and Fidelity & Guaranty Life Insurance 
Company of New York (Mar. 17, 2023) (available at https://www.sec.gov/files/fidelity-guaranty-
031723.pdf) (“F&G Life Letter”). 

21  Section 6(b)(1) of the Securities Act [15 U.S.C. 77f(b)(1)]. Certain “well-known seasoned issuers” or 
“WKSIs” can use a different registration process than what is described here. See generally Securities 
Offering Reform, Investment Company Act Release No. 26993 (July 19, 2005) [70 FR 44722 (Aug. 3, 
2005)] (“Offering Reform Release”). None of the insurance companies offering RILAs are WKSIs, 
however, and we generally do not anticipate that RILA issuers will meet the conditions to operate as a 
WKSI. We therefore do not generally discuss the WKSI registration process in this release. Even if a RILA 
issuer were to qualify as a WKSI, the Securities Act rules that provide a streamlined offering process for 
WKSIs generally would be inapplicable to RILA offerings on Form N-4, as proposed. For example, 
although a WKSI can file an automatic shelf registration statement, this would not be applicable under the 
proposal because Form N-4 does not permit a shelf registration statement and an automatic shelf 
registration statement must be filed on Forms S-3, F-3, or N-2. See rule 405 (definition of “automatic shelf 
registration statement”). As another example, WKSIs are permitted to use the “pay-as-you-go” method of 
paying securities registration fees, but the registration fees for RILA offerings would be paid annually in 
arrears under the proposal. See 17 CFR 230.456(b). 

22  Section 10(a)(3) of the Securities Act provides that when a prospectus is used more than nine months after 
the effective date of the registration statement, the information contained therein shall be as of a date not 
more than sixteen months prior to such use. 15 U.S.C. 77j. 



18 

the registration statement by filing a post-effective amendment which must be declared effective, 

typically by the staff acting pursuant to delegated authority.23  

If the offering is registered on Form S-3, the insurance company’s annual report on Form 

10-K containing audited financial statements will operate as a post-effective amendment to the 

registration statement for purposes of section 10(a)(3).24 The insurance company is required to 

provide a complete set of its financial statements, certain schedules, and executive compensation 

disclosures in a structured data format using Inline XRBL, but is not otherwise required to 

provide other information in the registration statement as structured data.25 Insurance companies 

offering RILAs also are not required to deliver prospectuses to investors because they can rely 

on the Commission’s “access equals delivery” framework in rule 172, although in practice we 

understand that insurance companies typically deliver prospectuses to accompany or precede 

other communications. 

When an insurance company registers a variable annuity separate account on Form N-4, 

in contrast, it pays registration fees based on the net issuance of securities, no later than 90 days 

after each fiscal year end.26 The insurance company can update its registration statement to 

include updated financial information required by section 10(a)(3) by filing an immediately 

effective post-effective amendment under rule 485. These provisions together are designed to 

allow insurance companies to efficiently conduct continuous offerings of variable annuities. The 

 

23  See Section 8(c) of the Securities Act [15 U.S.C. 77h(c)] and 17 CFR 230.462 (“rule 462”). 
24  An issuer filing a registration statement on Form S-3 will incorporate by reference information in reports 

under the Exchange Act filed after the registration statement has become effective, including the issuer’s 
annual report on Form 10-K. Accordingly, certain information required to be included in the prospectus 
may be included directly in the prospectus or included in an Exchange Act report that is incorporated by 
reference into the prospectus.  

25  See rule 405(b) of Regulation S-T. 
26  See 17 CFR 270.24f-2 (“rule 24f-2”). 



19 

insurance company also must structure certain key information in Inline XBRL to enhance the 

utility of that information to investors and must deliver a prospectus to investors because the 

“access equals delivery” framework in rule 172 is not available for variable annuities. 

C. Evidence of Investor Views and Areas of Potential Confusion 

Consistent with the RILA Act, the Commission received feedback on individuals’ 

comprehension and views on RILA disclosure through investor testing. Specifically, we received 

feedback through qualitative investor testing interviews, as well as quantitative testing designed 

to assess whether the design of certain hypothetical RILA disclosure provided to participants 

affects their comprehension of the disclosed information. Each of these aspects of investor 

testing was designed by the Commission’s Office of the Investor Advocate (“OIAD”). As 

described in more detail in section II.B below, this feedback helped us to identify areas of Form 

N-4 that we propose to amend to help ensure that a RILA purchaser receives key information 

that the purchaser is able to understand. 

OIAD conducted two rounds of qualitative interviews with a mix of investors across 

demographic characteristics, locations, and levels of financial literacy who either already owned 

annuities or had expressed interest in investing in an annuity product.27 These interviews aimed 

to generate hypotheses about certain content areas in RILA disclosure—specifically, disclosure 

that could appear in select rows of the “Key Information Table” (or “KIT”) in RILA registration 

statements, as discussed below—that may cause confusion and lead to impediments to investor 

 

27  OIAD’s qualitative testing consisted of two rounds of in-depth hour-long interviews with twenty 
participants, using a semi-structured, open-ended format so that participants could express their reactions 
and beliefs, regardless of whether they are accurate, in order to assess the reasoning of a sampling of 
investors regarding RILA products, and their reactions to potential RILA disclosures. See OIAD Report at 
Section 5, Qualitative Testing, Methods. 



20 

understanding of key information.28 These interviews concentrated on assessing: (1) potential 

RILA disclosure, focusing on a hypothetical KIT, for areas of confusion or misunderstanding; 

and (2) participants’ mental models regarding the way RILA products function, including 

potential benefits, drawbacks, and risks of a RILA investment. The interviews also included 

hypothetical scenarios.29 

Feedback from both rounds of qualitative interviews generally showed that the interview 

participants did not have much, if any, familiarity with RILAs. Furthermore, interviews in both 

rounds illustrated that many participants struggled to understand the details of the RILA contract 

presented in sample KIT disclosure.30  

With regard to the first round specifically, participants indicated significant confusion 

about the features and fees associated with RILAs, and often cited certain specific terminology, 

such as “index option,” “interim value adjustment,” “buffer,” and “investment term,” as 

confusing to them.31 For example, many participants mistakenly conflated “investment term” 

with the length of the entire insurance contract, leading them incorrectly to conclude that they 

could avoid any fees or charges if they liquidated their investment at the end of an initial one-

year investment period.32 Participants often did not appear to understand that there are multiple 

aspects of a typical RILA contract that could negatively affect an investor’s contract value or the 

 

28  OIAD Report at Section 1, Introduction and Executive Summary. 
29  See OIAD Report at Section 5, Qualitative Testing, Methods. 
30  Several participants in Round 2 were “significantly more sophisticated than the average investor,” with 

some having worked in a financial field or had over $1 million in retirement assets, and these participants 
also “struggled to correctly apply the concepts discussed in the KIT.” OIAD Report at Section 5, 
Qualitative Testing, Results from Round 2.  

31  See OIAD Report at Section 5, Qualitative Testing, Results from Round 1. As noted above, supra footnote 
2, to alleviate the confusion generated by “investment term,” we use the term “crediting period” in this 
release and in the proposed amendments to Form N-4.  

32  See, e.g., OIAD Report at Section 5, Qualitative Testing, Results from Round 1.21 

amounts an investor could withdraw from the contract (e.g., the fact that a withdrawal could be 

subject to a surrender charge, interim value adjustment, and tax penalty).33 Some participants 

expressed that a chart or graph would be useful to help them understand certain information 

presented about a RILA contract, such as surrender periods or how the contract’s bounded return 

structure would function.34 Additionally, some participants indicated they would need more 

specific information—besides the information in the hypothetical KIT rows shared with them—

to evaluate the appropriateness of a RILA.35   

While first-round interview participants may not have been able to understand RILA 

features and economic tradeoffs fully after reviewing sample KIT disclosure, some were able to 

identify certain potential drawbacks and explain certain aspects of RILA contracts following 

their review of this sample disclosure. This was demonstrated in participants’ responses to 

sample scenarios, where the interview facilitator presented facts about a hypothetical investor’s 

background, and participants were asked to provide their opinions about whether a RILA 

contract would be an appropriate investment option for those investors and discuss their 

reasoning. For instance, participants in the first-round interviews could generally identify that a 

RILA contract could present particular risks for individuals without a long time horizon.36 On 

the other hand, as noted above, these participants often identified only a single charge or penalty 

 

33  See OIAD at Section 5, Qualitative Testing, Results from Round 1. 
34  OIAD Report at Section 5, Qualitative Testing, Results from Round 1. 
35  OIAD Report at Section 5, Qualitative Testing, Results from Round 1. 
36  OIAD Report at Section 5, Qualitative Testing, Results from Round 1. However, OIAD’s report also notes 

that in the second round of testing, many participants did not understand that RILAs are intended as a 
retirement savings vehicle, and that there may be tax penalties for withdrawal prior to age 59 ½. See id., 
Results from Round 2. Similarly, only 12.6% of participants in the quantitative testing correctly identified 
that RILAs are investing vehicles that are intended purely as retirement savings vehicles. Id., Section 6, 
Quantitative Testing, Results, Summary of Quantitative Testing. 



22 

that would apply even in scenarios where, for example, a surrender charge, early withdrawal tax 

penalty, and interim value adjustment might all apply.37 Some participants were able to identify 

that a RILA contract could be appropriate for an individual in light of factors such as desire to 

protect against losses in the stock market, taking into account considerations such as age, 

investment time horizon, and other sources of liquid funds.38 Some interview participants also 

demonstrated that they could use the KIT disclosure to discern quickly that they would not be 

interested in purchasing a RILA contract, for example because of liquidity needs or relatively 

short investment time horizons.39 

Commission staff used this feedback to update sample KIT disclosure in between 

qualitative interview rounds. In particular, in the second round, sample KITs were modified to 

include: (1) the phrase “investment term” rather than “term,” (2) a table to show how investment 

term interacts with contract length, (3) graphics to provide more information about RILA loss 

limitation features such as floors and buffers, and (4) expanded links to additional information to 

indicate that more information could be available.40 Following these changes, participants 

demonstrated modestly improved comprehension in certain limited areas. For example, the 

sample KIT disclosure used in the second-round of qualitative testing emphasized that contract 

adjustments can substantially reduce the value of an investment if investors withdraw money 

before the end of an investment term. Participants who viewed this modified disclosure had 

greater success in identifying the potential financial impact of this feature, with some expressing 

 

37  OIAD Report at Section 5, Qualitative Testing, Results from Round 1. 
38  OIAD Report at Section 5, Qualitative Testing, Results from Round 1. 
39  OIAD Report at Section 5, Qualitative Testing, Results from Round 1.  
40  See OIAD Report at Section 5, Qualitative Testing, Results from Round 1, and Appendix C. 



23 

concern about the potential magnitude of the contract adjustment.41 Additionally, some second-

round participants who viewed the KIT contract adjustment disclosure also asked for more 

specific information about how the adjustment is calculated, which suggests that layered 

disclosure might be useful for these concepts.42 Even though these participants were unable to 

define certain terms relevant to contract adjustments (e.g., interim value adjustment), most 

second-round participants seemed to understand that RILAs are not a short-term investment and 

should only be used if an investor will not need to make early withdrawals.43  

The second round of testing also introduced a table in the sample KIT disclosure that 

attempted to help illustrate how fees were charged over the surrender period of the contract, the 

difference between the investment term (i.e., the crediting period) and the contract length, and 

how the surrender charge and potential contract adjustments could vary over different time 

frames.44 Nonetheless, participants in the second round of testing still had difficulty 

distinguishing between surrender charges and contract adjustments or understanding that both 

can apply cumulatively to reduce an investor’s contract value in cases of early withdrawal.45 

Most participants in the second round of testing also continued to struggle with the mechanics of 

“buffers,” despite the inclusion of graphics in the hypothetical KITs designed to illustrate how 

buffers work.46 There were a number of areas where participants wanted information that was 

not part of the KIT rows being tested, such as the specific index-linked options available under 

 

41  See OIAD Report at Section 5, Qualitative Testing, Results from Round 2. 
42  See OIAD Report at Section 5, Qualitative Testing, Results from Round 2. 
43  See OIAD Report at Section 5, Qualitative Testing, Results from Round 2. 
44  See OIAD Report at Section 5, Qualitative Testing, Results from Round 1, and Results from Round 2. 
45  See OIAD Report at Section 5, Qualitative Testing, Results from Round 2. 
46  See OIAD Report at Section 5, Qualitative Testing, Results from Round 2. 



24 

the contract, and some participants with more investing experience wanted information about 

past returns on the RILA, as well as additional information on fees and charges—particularly 

regarding caps on gains and other bounded return features—in order to understand the ways in 

which insurance companies profit from RILAs.47  

Following the qualitative interviews, OIAD conducted quantitative testing designed to 

assess comprehension of key concepts about RILAs and the extent to which the organization of 

disclosures affected participants’ comprehension of the disclosed information.48 Approximately 

2,500 participants completed OIAD’s quantitative testing study, which was fielded over an eight-

day period and targeted groups who were more likely to have some experience with financial 

products.49 Participants received focused portions of a hypothetical KIT to test disclosures. For 

example, participants were randomly assigned to one of two formats for the sample KIT 

disclosure, one with a Q&A format and one with a statement-based format.50 Overall, the results 

of OIAD’s quantitative testing suggest that most investors experience challenges in 

understanding RILAs.51 This round of testing reviewed overall comprehension of participants as 

well as whether participants were able to assess four sub-scores: (1) appropriateness of RILAs 

for investors based on their characteristics, (2) how a RILA works, (3) how the charges and 

penalties associated with RILAs affect liquidity, and (4) the insurance protections offered by 

RILAs.52 Across all participants, the average percentage of questions scored correct was 58%, 

 

47  See OIAD Report at Section 5, Qualitative Testing, Results from Round 2. 
48  OIAD Report at Section 6, Quantitative Testing. 
49  OIAD Report at Section 6, Quantitative Testing, Methods. 
50  OIAD Report at Section 6, Quantitative Testing, Study Design and Overview. 
51  OIAD Report at Section 6, Quantitative Testing, Summary of Quantitative Testing. 
52  OIAD Report at Section 6, Quantitative Testing, Comprehension Measures. 



25 

which, while higher than the expected score for people randomly guessing (50%), was lower 

relative to what might be considered a well-informed purchaser of a RILA product.53 However, 

the results of the sub-scores varied, specifically 57% for appropriateness, 49% for how a RILA 

works, 57% for insurance, and 62% for liquidity.54 Comprehension varied depending on the 

particular concept tested. For example, 80.7% of participants were able to correctly identify that 

RILA investors cannot access their money whenever they need it at no cost, suggesting that the 

tested disclosures were sufficient to put participants on notice to the potential for contract 

adjustments and surrender charges.55 Conversely, only 12.6% of participants correctly identified 

that RILAs are intended purely as retirement savings vehicles, rather than a product appropriate 

for other, shorter-term investing goals (e.g., education and home purchasing), suggesting 

continued investor confusion on this topic.56 Additionally, participants in the quantitative testing 

were classified into three groups based on their experience with investing. Not surprisingly, 

increased investment experience correlated with greater overall comprehension, with non-

investors (those with no existing investments) averaging slightly less than 50% correct, 11.7 

percentage points lower than the average for the group with the most investment experience.57 

The Q&A KIT format demonstrated a statistically significant, albeit quantitatively small, 

improvement over the non-Q&A KIT format, particularly with regard to the non-investor group, 

 

53  OIAD Report at Section 6, Quantitative Testing, Results. 
54  OIAD Report at Section 6, Quantitative Testing, Results, Table 6. 
55  OIAD Report at Section 6, Quantitative Testing, Results. 
56  OIAD Report at Section 6, Quantitative Testing, Results. 
57  See OAID Report at Section 6, Quantitative Testing, Results, Subgroup Analysis, Investor Status. 



26 

who saw a 5.7 percentage points increase in comprehension in connection with the Q&A format 

with regard to overall comprehension.58 

Overall, investor testing successfully identified a range of barriers to investor 

understanding of RILAs and associated disclosures. However, with the few exceptions noted 

above, variations in disclosures did not result in significant improvements in investor 

comprehension in the investor testing. Accordingly, while OIAD’s investor testing has been 

successful in identifying specific areas of investor confusion regarding RILAs, those results were 

largely inconclusive in terms of determining specific disclosures that are relatively more 

successful in addressing the identified confusion.  

We have incorporated those results in our design of the proposed Form N-4 amendments, 

endeavoring to give particular attention to areas of identified investor confusion while leveraging 

existing disclosure requirements. Because investor testing did not, for the most part, provide 

persuasive evidence of superior disclosures, we are proposing to largely utilize the existing Form 

N-4 disclosures which have been developed over time, and with which staff, investors, and RILA 

issuers are already familiar. Building upon these existing disclosures has additional benefits, 

because combination contracts offering both variable and index-linked options will be required 

to comply with Form N-4, making it more efficient to build on the form’s requirements for both 

types of investment options. We seek comment throughout this release on specific areas for 

improvement that can aid investor comprehension. Further, we are requesting specific input from 

the retail investor community, through a short Feedback Flyer, relating to their experiences with 

annuities generally and RILAs specifically.59  

 

58  See OIAD Report at Section 6, Quantitative Testing, Results, Subgroup Analysis, Investor Status. 
59  See infra section II.K; Appendix D. 



27 

Further, in addition to investor testing focused specifically on sample RILA disclosure, 

our proposal—and the current disclosure requirements in Form N-4 that we are building upon—

also draw on the Commission’s past investor testing efforts, outreach, and other empirical 

research concerning investors’ preferences. This includes, for example, information about 

summary content and layered disclosure approaches.60 The Commission has historically received 

feedback showing that investors generally prefer concise, layered disclosure.61 Investors 

participating in certain past quantitative and qualitative investor testing initiatives on the 

Commission’s behalf have also expressed preferences for, wherever possible, the use of a 

summary containing key information about an investment product or service written in clear, 

concise, and understandable language and presented in an accessible format.62 Each of these 

sources of evidence of investor preferences, understanding, and behaviors in response to 

disclosures specific to RILAs and other investment products more generally has provided 

important context and support for our proposal’s approach to RILA disclosure.  

 

60  See Updated Disclosure Requirements and Summary Prospectus for Variable Annuity and Variable Life 
Insurance Contracts, Investment Company Act Release No. 33286 (Oct. 30, 2018) [83 FR 61730 (Nov. 30, 
2018)] (VASP Proposing Release) at paragraphs accompanying nn.38-43. 

61  See, e.g., Request for Comment on Fund Retail Investor Experience and Disclosure, Investment Company 
Act Release No. 33113 (June 5, 2018) [83 FR 26891] (June 11, 2018] (“Investor Experience RFC”). 
Feedback in comment letters generally showed that retail investors prefer concise, layered disclosure and 
feel overwhelmed by the volume of information they currently receive. Multiple comment letters reflected 
a preference for shorter summary disclosures, with additional information available online or upon request. 
See, e.g., Comment Letter of C. Scott (July 26, 2018) (expressing preference for shorter summary 
disclosures, and suggesting disclosures “trim the fat and replace the text-heavy disclosures with something 
that is clear, succinct, and transparent”); Comment Letter of Helena Krus (July 29, 2018) (noting a 
preference to receive shorter summary disclosures, with additional information available online or upon 
request, and suggesting that the option should be available for all documents over 5 pages). 

62  See supra footnote 61; see also, e.g., SEC Staff, Study Regarding Financial Literacy Among Investors 
(Aug. 2012). The key information that investors found useful and relevant before purchasing an investment 
product includes information on fees and expenses, investment performance, principal risks, and 
investment objectives. With respect to the presentation of disclosure, the study indicates that investors 
preferred disclosures being “written in clear, concise, understandable language, using bullet points, tables, 
charts, and/or graphs.” Materials relating to this study, including the staff’s report, are available at 
http://www.investor.gov/publications-research-studies/sec-research.  

http://www.investor.gov/publications-research-studies/sec-research


28 

D. Overview of Proposal 

We are proposing to modernize and enhance the registration and disclosure framework 

for RILAs by adapting the existing registration and disclosure framework that is familiar to 

investors and issuers for variable annuity separate accounts to accommodate RILAs.  

• Use of Form N-4. We are proposing to amend Form N-4 so that issuers seeking to 

register the offering of RILAs must use that form. To accommodate this, we are also 

proposing amendments to that form that specifically address the features and risks of 

RILAs. For example, we are proposing amendments to the form’s “Key Information 

Table” that highlight key features of RILAs that should be disclosed so that investors 

may determine whether a RILA is an appropriate investment for them. In particular, the 

KIT highlights key features of a RILA contract that may be substantially different from 

the features of investment products investors may be more familiar with, and that investor 

testing suggests may not be readily apparent to investors. Further, because the insurance 

company would register the offering of a RILA on Form N-4 under the proposal, it would 

be subject to the requirements in the form related to financial statements, including the 

form instruction that currently permits variable annuity issuers to file insurance company 

SAP financial statements in certain circumstances. 

• Form N-4 Amendments for All Issuers. In addition to adding RILAs to Form N-4, we are 

also proposing amendments to the form that would be applicable to offerings of variable 

annuities. These proposed amendments are informed by the staff’s historical experience 

in administering the form and respond to observations from investor testing relevant to 

variable annuity offerings. For example, one takeaway from investor testing was that the 

complicated jargon of RILA contracts was a consistent impediment to investor 



29 

comprehension of KIT disclosures.63 To address this confusion, we are proposing to 

switch the order of the Key Information Table and Overview of the Contract items to 

introduce investors earlier to the terminology and concepts underlying annuity contracts, 

in the hopes that this context will improve investor comprehension of KIT disclosures. 

Because variable annuities are also complicated investment products, we are proposing to 

switch the order for these products as well, so that variable annuity investors also have 

the benefit of this additional context. 

• Summary Prospectus. Consistent with the inclusion of RILAs on Form N-4, we are 

proposing to permit RILA issuers to make use of the summary prospectus framework 

available to variable annuity registrants on Form N-4. 

• Updates to the Filing Rules. To accommodate RILA registrations on Form N-4, we are 

proposing to require RILA issuers to pay fees in arrears on Form 24F-2 and we are 

proposing amendments to address RILAs in the rules that variable annuities use to file 

post-effective amendments and to update prospectuses. 

• Materially Misleading Statements in Sales Literature. The proposed amendments would 

require RILA issuers to comply with rule 156, which provides guidance as to when sales 

literature is materially misleading under the Federal securities laws. 

Our proposal, if adopted, would implement the RILA Act’s mandate. 

II. DISCUSSION 

A. Use of Form N-4 

 

63  See OIAD Report at Section 6, Quantitative Testing, Summary of Quantitative Testing. 



30 

We propose to require insurance companies to use Form N-4 to register the offering of 

RILAs, as well as amendments to the form to require disclosures specific for these securities.64 

As discussed above, the registration forms currently used by RILA issuers do not include line-

item disclosure requirements addressing the unique aspects of RILAs, like limits on gains or the 

application of contract adjustments. They also require information about the issuer, such as 

MD&A, that may be less important to annuity investors, given that they are not making a direct 

investment in the insurance company, and that the Commission has not determined to require for 

variable annuities. Conversely, most variable annuity issuers already use Form N-4 to register 

their securities and the form is designed to provide investors with product-specific information 

about annuity contracts.65 Requiring insurance companies to register RILA offerings on Form N-

4 therefore leverages the form’s existing insurance-product specific disclosure requirements, 

including disclosure requirements that help effectuate the relatively new summary prospectus 

layered disclosure framework the Commission adopted in 2020 for variable contracts. With the 

RILA-specific disclosures we are proposing to add to Form N-4, we intend that the form will 

provide investors with the information necessary to make informed decisions about RILAs.  

Including RILAs on Form N-4 also could provide further benefits to investors by 

facilitating not only investor comparison among RILAs, but also the comparison of index-linked 

options to variable options in the same annuity contract. For example, investors would be able to 

review summary information of all the available investment options of an annuity contract—

 

64  See proposed General Instruction B.1 of Form N-4. Form N-4, as we propose to amend it, would provide 
that Form N-4 is “to be used by insurance companies to register index-linked annuity contracts under the 
Securities Act of 1933.” Insurance companies therefore would not be permitted to register RILA offerings 
on Forms S-1 or S-3, as they do today.  

65  Variable annuities register on Form N-3 if they are issued by separate accounts that are organized as 
management investment companies. However, most variable annuities are issued by separate accounts that 
are organized as unit investment trusts and therefore use Form N-4. See supra footnote 6. 



31 

index-linked options, variable options, and fixed options—and compare these options in one 

place in the prospectus appendix required by Form N-4.66 Currently, we understand that 

approximately 44% of the RILAs offered in the marketplace are offered as index-linked options 

through combination products.67 Registering the offerings of RILAs on Form N-4, rather than a 

new or different form, also would be more efficient for insurance companies and Commission 

staff. In this regard, insurance companies would benefit from using a single form, with tailored 

disclosure requirements, to register the offerings of both RILAs and combination contracts with 

index-linked options. In addition, many of the insurance companies issuing RILAs also issue 

variable annuity contracts and therefore are familiar with the requirements of Form N-4. Using 

Form N-4 for RILAs also would be efficient for our staff because the disclosure requirements for 

variable contracts and RILAs would be consolidated in one place. Further, because Congress has 

authorized RILA issuers to use Form N-4 if the Commission fails to adopt a registration form for 

RILAs within 18 months of the RILA Act’s enactment, we believe that requiring insurance 

companies to use the form is consistent with congressional intent.  

Requiring insurance companies to register RILA offerings on Form N-4 under the 

proposal would result in changes to RILA disclosure, in that they would have to comply with the 

current Form N-4 disclosure requirements in addition to the proposed new RILA-specific 

disclosure requirements. While Form N-4 contains some of the issuer- and offering-specific 

disclosures required by Forms S-1 and S-3, it does not contain them all. Specifically, Form N-4 

does not include many of the disclosures relating to the mechanics of the offering (e.g., use of 

proceeds, dilution, etc.); offering participants other than the issuer, such as selling securities 

 

66  See infra section II.B.3(c). 
67 Based on an informal Commission staff review of RILA filings on the EDGAR system as of May 2, 2023. 



32 

holders; and certain details of the issuer (e.g., descriptions of property, executive compensation, 

etc.). These disclosures may be more useful to an investor considering an investment in the 

capital stock or debt securities of the insurance company rather than an investment in a RILA 

issued by the insurance company. Unlike an investor in the insurance company itself, a RILA 

investor’s direct investment exposure to the insurance company is limited to the insurance 

company’s claims-paying ability, which also is supported by State insurance regulations and 

supervision designed to ensure that insurance companies are able to satisfy their obligations 

under their insurance contracts. Requiring insurance companies to register RILA offerings on 

Form N-4 would leverage that form’s annuity-focused requirements to ensure that investors 

receive those disclosures that would be the most important in the RILA context. 

To accommodate the offering of RILAs on Form N-4 and to provide a consistent 

framework for all offerings registered on the form, we are proposing, as discussed in more detail 

below, changes to certain rules and requirements such that RILA issuers would be subject to the 

same process requirements as variable annuities.68  For example, similar to the current offering 

processes for issuers of variable annuities, insurance companies registering RILA offerings 

would be permitted to use a streamlined summary prospectus and required to pay fees to register 

their securities annually rather than at the time of filing a registration statement.69 These changes 

would provide efficiencies for insurance companies and Commission staff in establishing 

consistent requirements for offerings registered on Form N-4. It would, however, result in some 

trade-offs for RILA issuers. For example, insurance companies currently registering RILA 

offerings on Form S-3 would lose the ability to update their registration statement by 

 

68  See infra sections I.C and II.E. 
69  See also infra section II.E.3 (discussing proposed changes to rule 172). 



33 

incorporating by reference their annual report but would be able to update their registration 

statement annually with an immediately effective amendment. On balance, and as discussed in 

more detail throughout this release, requiring insurance companies registering RILA offerings to 

follow the offering processes proposed in this release should result in efficiencies for insurance 

companies and our staff. We anticipate that requiring RILA offerings to be registered on Form 

N-4 will also benefit investors by leveraging the form’s annuity-specific disclosure requirements 

and extending the variable annuity summary prospectus to RILAs. Having a common 

registration form also should make it easier for investors deciding between an investment in a 

RILA or a variable annuity to compare the offerings. 

We request comment on the proposed requirement to register RILA offerings on Form N-

4. 

1. As proposed, should we require RILA issuers to use Form N-4? Is another existing 

registration form more appropriate for RILAs? If so, which registration form and 

why?  

2. Given that any existing registration form would require RILA-specific 

amendments, should the Commission instead develop a new form specifically for 

RILAs? 

3. Is it appropriate to require an annuity that offers different types of investment 

options (e.g., variable options as well as index-linked options) to address these 

different types of investment options on the same registration form? Would 

requiring different registration forms for annuities offering different types of 

investment options be more or less efficient for insurance companies that offer 

variable annuities, RILAs, and combination contracts?  



34 

4. Is there any information currently required by Forms S-1 or S-3 that we should 

also require RILA issuers to disclose?  

5. Would requiring RILAs to follow the same filing and other process requirements 

as variable annuities (such as requirements for paying registration fees, and the 

ability to use a summary prospectus) be efficient for insurance companies because 

they could use the same processes to pay registration fees and update registration 

statements for variable annuities, RILAs, and combination contracts?  

6. Do commenters believe that there are any disclosures from Forms S-1 and S-3 we 

are not including in the proposed Form N-4, particularly the MD&A and executive 

compensation disclosures, that could be of material relevance to RILA investors? 

If so, please explain their relevance to RILA investors.  

7. Do commenters agree with our estimate that approximately 44% of RILA 

securities offered in the marketplace are offered as index-linked options through 

combination products? If not, what percentage do commenters think more 

accurately reflects RILA securities offered as index-linked options through 

combination products, and what is the basis for this estimate? 

8. Should Form N-4, as amended, be the only form that insurance companies could 

use to register RILA offerings? Should we permit the continued use of Forms S-1 

and S-3 in addition to the amended Form N-4? Would this be appropriate, given 

that RILA issuers can already use those forms? How would we ensure that 

investors receive the information necessary to make informed decisions through 

use of those forms, including the benefit of the proposed RILA-specific disclosure 

requirements informed by investor testing? 



35 

9. Do commenters expect that any RILA issuers will meet the conditions to operate 

as a WKSI, and if so, what is the basis for this expectation? 

10. Do commenters agree that leveraging Form N-4’s annuity specific disclosure 

requirements and summary prospectus regime would benefit investors? Would 

registering RILA offerings on Form N-4 make it easier for RILA investors to 

compare RILA offering with variable annuity offerings? Are there any other 

potential benefits or disadvantages to investors in registering RILA offerings on 

Form N-4 as compared to other forms? 

B. Contents of Form N-4 

As proposed, many items of current Form N-4 would apply to RILAs. We are also 

proposing updates to Form N-4 to include disclosures specific to RILAs. In certain 

circumstances, we propose changing the disclosures provided on the form that would apply to 

both RILAs and variable annuities. The chart in Table 1 below outlines these items and any 

substantive changes we are proposing.70 We discuss these changes in more detail in the sections 

that follow. 

Table 1: Overview of Proposed Form N-4 

Item Description Substantive Changes Discussion 

Prospectus (Part A) 
1 Front and Back Cover 

Pages 
Adding new legends and other 
standardized disclosures applicable to 
all issuers 

Section II.B.1 

2 Overview of the Contract New RILA-specific disclosures; 
moving order of appearance up 

Section II.B.3(a) 

 

70  Some proposed changes entail a non-substantive change such as a change to a defined term or specifying 
that the provision would continue to be applicable only to a registered separate account or variable option. 
These are not flagged in the following table but are instead discussed in section II.B.7 supra. 



36 

Item Description Substantive Changes Discussion 

3 Key Information New RILA-specific disclosures; 
changing to a question-and-answer 
format; moving order of appearance 
down; change discussion of 
restrictions on optional benefits to 
cover all benefits 

Section II.B.2 

4 Fee Table New contract adjustment disclosure. Section II.B.5 
5 Principal Risks of 

Investing in the Contract 
Providing more detailed disclosures 
applicable to all issuers 

Section II.B.4 

6 Description of the 
Insurance Company, 
Registered Separate 
Account, and Investment 
Options 

New RILA-specific disclosures and 
one new item regarding variable 
options 

Section II.B.3(a) 

7 Charges New disclosures related to contract 
adjustments 

Section II.B.5 

8 General Description of 
Contracts 

No substantive change Section II.B.8(b) 

9 Annuity Period No substantive change Section II.B.8(b) 
10 Benefits Available Under 

the Contract 
No substantive change Section II.B.8(b) 

11 Purchases and Contract 
Value 

No substantive change Section II.B.8(b) 

12 Surrenders and 
Withdrawals 

No substantive change Section II.B.8(b) 

13 Loans No substantive change Section II.B.8(b) 
14 Taxes No substantive change Section II.B.8(b) 
15 Legal Proceedings No substantive change Section II.B.8(c) 
16 Financial Statements No substantive change (but see Item 

26) 
Section II.D 

17 Investment Options 
Available Under the 
Contract 

New RILA-specific disclosures Section II.B.3(b) 

Statement of Additional Information (Part B) 
18 Cover Page and Table of 

Contents 
No substantive change Section II.B.8(b) 

19 General Information and 
History 

No substantive change Section II.B.8(c) 

20 Non-Principal Risks of 
Investing in the Contract 

No substantive change Section II.B.8(b) 

21 Services No substantive change Section II.B.8(b) 
22 Purchase of Securities 

Being Offered 
New disclosure of specific contract 
adjustment information 

Section II.B.5 

23 Underwriters No substantive change Section II.B.8(c) 



37 

Item Description Substantive Changes Discussion 

24 Calculation of 
Performance Data 

Clarifying only applies to variable 
options. 

Section II.B.7 

25 Annuity Payments No substantive change Section II.B.8(b) 
26 Financial Statements Providing that RILA issuers can use 

the relevant instructions and adding 
requirements relating to changes in 
and disagreements with accountants 
for RILAs 

Section II.D 

Other Information (Part C) 
27 Exhibits Adding power of attorney for all 

issuers and accountant letters for 
RILA issuers as exhibits 

Section II.B.7(d) 

28 Directors and Officers of 
the Insurance Company 

No substantive change Section II.B.8(c) 

29 Persons Controlled or 
Under Common Control 
with the Insurance 
Company or the 
Registrant 

No substantive change Section II.B.8(c) 

30 Indemnification No substantive change Section II.B.8(c) 
31 Principal Underwriters No substantive change Section II.B.8(c) 
31A Information about 

contracts with Index-
Linked Options 

New disclosure of RILA specific 
information 

Section II.B.6 

32 Location of Accounts 
and Records 

No substantive change Section II.B.7 

33 Management Services No substantive change Section II.B.8(b) 
34 Fee Representation and 

Undertakings 
Adding new RILA undertakings Section II.B.7(d) 

1. Front and Back Cover Pages (Item 1) 

We propose to require RILA issuers to include the information Form N-4 currently 

requires on the front and back cover pages of the prospectus. Currently, issuers are required to 

include on the front and back cover pages basic identifying information about the issuer and the 

contract, information on how to review the document (e.g., what the SAI is and where to find it), 

as well as certain legends, for example, one relating to the ability for an investor to cancel the 



38 

contract within 10 days.71 The table below outlines these existing disclosures that RILAs would 

be required to include if applicable. 

Table 2: Existing Information Required by Item 1 of Form N-4 (with proposed 

adjustments) 

Item 
Number Disclosure Cover 

Identifying Information 
Item 1(a)(2) Insurance company’s name Front 
Item 1(a)(3) Types of contracts offered (e.g., group, individual, etc.) Front 
Item 1(a)(4) Name and class of contract Front 
Item 1(a)(9) Date of prospectus Front 
Item 1(b)(4) EDGAR identifier number Back 

Legends 
Item 
1(a)(10) 

Statement that the Commission has not approved or disapproved of 
the securities or passed upon the accuracy or adequacy of the 
disclosure in the prospectus and that any contrary representation is a 
criminal offense (as required in 17 CFR 230.481(b)(1)). 

Front 

Item 
1(a)(11) 

Statement that additional information about the contract is available 
on Investor.gov. 

Front 

Item 
1(a)(12) 

A legend that states that if you are a new investor, you may cancel 
your contract within 10 days of receiving it with some details about 
the operation of this process. 

Front 

Other Information 
Item 1(b)(1) Statement that the SAI contains additional information, that it is 

available to investors, and how investors may obtain the SAI or 
make inquiries about their contracts. 

Back 

Item 1(b)(2) Statement about whether and from where information is 
incorporated by reference. 

Back 

In addition, we are proposing to add several new disclosures to the cover page to 

accommodate RILAs. The first proposed amendment would require the insurance company to 

 

71  One change specific to this legend would be to indicate whether the insurance company will apply a 
contract adjustment on any money returned during this period. Contract adjustments are a defining element 
of a RILA, but can apply in other circumstances. Nonetheless, given the context of this legend, we believe 
that it is important for investors to know whether they will be subject to this charge if they elect to have 
their money returned. See supra sections II.B.5 (discussing contract adjustments generally) and II.F 
(discussing that it could be materially misleading to advertise that investors can receive their money back 
during a period of time without indicating that a contract adjustment could apply). 



39 

identify the types of investment options offered under the contract and cross-reference the 

prospectus appendix that provides additional information about each option.72 Given the addition 

of investment options beyond variable options to the form, this would help investors better 

understand what investment options are available under the contract.  

The other proposed amendments to the cover page would require additional new 

disclosures that highlight RILAs’ complexities and certain associated risks. These include 

RILA’s limitation on gains and potential for loss, that they are not short-term investments, and 

that payments under the contract are subject to the insurance company’s financial strength and 

claims-paying ability. The proposed legends would require issuers to include statements on the 

front cover disclosing the following: 

(1) The contract is a complex investment and involves risks, including the potential loss 

of principal;  

(2) For contracts that include index-linked options, a prominent statement that the 

insurance company limits the amount the investor can earn, the potential for 

investment loss could be significantly greater than the potential for investment gain, 

an investor could lose a significant amount of money if the index declines in value, 

and a prominent statement disclosing as a percentage the maximum amount of loss 

from negative index performance that an investor could experience after taking into 

account the minimum guaranteed limit on index loss provided under the contract;  

(3) The contract is not a short-term investment and is not appropriate for an investor who 

needs ready access to cash, and withdrawals could result in surrender charges, 

 

72  See proposed Item 1(a)(5) of Form N-4.  



40 

negative contract adjustments, taxes, and tax penalties as applicable with a prominent 

statement of the maximum potential loss resulting from a contract adjustment, if 

applicable; and  

(4) The insurance company’s obligations under the contract are subject to its financial 

strength and claims paying ability.73  

This cover page disclosure is designed to put an investor on notice of these key considerations to 

help the investor make informed decisions.  

While these proposed additional disclosures are important for investors in RILAs, they 

are also relevant in many cases to investors in variable annuities. For example, while RILAs are 

complex investments, variable annuities are complex as well. Variable annuities, like RILAs, 

also are not short-term investments. As a result, we are proposing to apply the proposed new 

disclosures to all Form N-4 issuers to ensure that investors in both RILAs and variable annuities 

receive appropriate disclosures. 

We request comment on the requirement of RILAs to include the information in Item 1 of 

Form N-4 on their registration statement and the inclusion of new legends for all Form N-4 

filers, as applicable, on the front cover of the registration statement. 

11. Would the new legends be effective in helping investors make informed decisions 

with regards to RILAs? Do commenters agree that it is appropriate to require the 

legends for variable annuities? Are the disclosures in the Overview of the Contract, 

Key Information Table, and elsewhere in the prospectus—as discussed later in this 

release—sufficient such that these legends are not necessary? Conversely, are 

 

73  See proposed Item 1(a) of Form N-4.41 

legends effective in alerting investors to key concepts for a RILA or variable 

annuity on the cover page of the prospectus? Are there additional legends that are 

appropriate in light of the complexity of RILAs and variable annuities? For 

example, should a legend be required that specifically discloses a contract’s upside 

limitation, such as due to a participation rate or cap rate?  

12. Are there any examples or illustrations of how RILAs operate that we should 

require on the front or back cover pages? Are examples or illustrations more 

effective communication tools than legends on the cover page of the prospectus? 

Should examples or illustrations be provided in addition to legends? 

13. Is there any other information we should require on the front or back cover pages? 

2. Key Information Table (Item 3) 

RILA issuers, like variable annuities issuers currently, would be required to provide a 

Key Information Table in their registration statements under the proposal. We also are proposing 

amendments to the KIT’s disclosure requirements to address key RILA features, as well as other 

amendments that would apply to all Form N-4 issuers. 

The KIT provides summary prospectus disclosure, including a brief description of key 

facts about a variable annuity in a specific sequence and in a standardized presentation.74 

Specifically, the KIT currently includes a summary of five topic areas: (1) fees and expenses; (2) 

risks; (3) restrictions; (4) taxes; and (5) conflicts of interest. The KIT functions as an integral part 

of the layered disclosure approach in Form N-4 by identifying key considerations upfront, with 

more detail to follow later in the prospectus. The proposed amendments to the KIT, which are 

 

74  See VASP Adopting Release at section II.A.1.c.ii; see also infra section II.C. 



42 

informed by investor testing, are intended to build on this framework and highlight important 

considerations related to RILAs, including certain aspects of RILAs that our investor testing 

observed are difficult for investors to understand and thus require clear disclosure in order to 

help investors make informed investment decisions.75 

Form N-4 currently prescribes format requirements for the KIT to enhance the readability 

and comparability of the disclosure that also would apply to RILA offerings under the 

proposal.76 Specifically, RILA issuers would be required to disclose the required information in 

the tabular presentation reflected in the instructions, in the order specified, without any 

modification or substitution with alternate terminology of the title, headings, and sub-headings 

for the tabular presentation, unless otherwise provided. Consistent with the form’s current 

requirements, RILA issuers, however, would be permitted to exclude any disclosures (other than 

the title, headings, and sub-headings for this tabular presentation) in the KIT that are not 

applicable, or modify any of the statements required to be included, so long as the modified 

statement contains comparable information. RILA issuers also would be required to provide 

cross-references to the location in the statutory prospectus where the subject matter is described 

in greater detail, either accessed by direct electronic link or through equivalent methods or 

technologies, as required for variable annuity KIT disclosure. Consistent with current 

requirements, RILA issuers would include these cross-references adjacent to the relevant 

disclosure, either within the table row, or presented in an additional table column. As currently is 

 

75  See, e.g., OIAD Report at Section 5, Qualitative Testing (following two rounds of in-depth interviews to 
assess potential RILA KIT disclosure for areas of confusion or misunderstanding, qualitative interviews 
suggested confusion with RILA terms and concepts relating to, for example, contract adjustments such as 
interim value adjustments and loss limiting features such as buffers); OIAD Report at Section 6, 
Quantitative Testing, Results, Subgroup Analysis (noting 5.7 percentage point effect of the Q&A KIT 
structure on overall comprehension for “non-investors” during quantitative testing). 

76  See proposed instruction 1 to Item 3 of Form N-4. 



43 

required, all disclosures for the KIT should be short and succinct, consistent with the limitations 

of a tabular presentation. 

We are proposing three modifications that would apply to registration statements both for 

RILAs and for variable annuities. These changes are designed to provide investors with a better 

understanding of these products, and are informed in part by the results of investor testing. First, 

we are proposing to require issuers to present the information in the KIT in a question-and-

answer (“Q&A”) format.77 As a result of this change, the various line items of the KIT would be 

rephrased as questions (e.g., “Are there charges for early withdrawals?” instead of “Charges for 

Early Withdrawals”). The instructions would further require that, unless the context otherwise 

requires, issuers should begin the response with a “Yes” or “No” in bold text when answering a 

question presented in a given row of the KIT. Consistent with the directional results of the 

quantitative investor testing, we anticipate that the Q&A format may improve investor 

comprehension of RILA-specific topics. Because the effect of the Q&A KIT structure on overall 

comprehension was larger for non-investors than independent investors, this format may 

particularly improve comprehension for less-experienced investors.78 We also expect that 

rephrasing the current line items in a Q&A format would more clearly convey the importance of 

 

77  Proposed instruction 1(d) to Item 3 of Form N-4. 
78  For purposes of investor testing, participants were classified into three groups: those with no investments in 

stocks, bonds, mutual funds, or other securities (non-investors); those with investments exclusively in 
retirement savings accounts (retirement only); and those with investments outside of retirement accounts 
(independent investors). See OIAD Report at Section 6, Quantitative Testing, Subgroup Analysis, Investor 
Status. The report noted a 5.7 percentage point effect of the Q&A KIT structure on overall comprehension 
for “non-investors”. Id. 



44 

the KIT information to help RILA and variable annuity investors make informed investment 

decisions.79 

Second, we propose to change the order in which the KIT (current Item 2) appears 

relative to the Overview of the Contract (current Item 3) disclosures.80 The Overview of the 

Contract disclosures provide general information about the contract and important context about 

the information summarized in the KIT. Based on our observations of investor testing, we 

believe RILA investors may generally benefit from more context to understand the KIT 

disclosures. For example, interview participants generally found certain RILA-specific 

terminology confusing, such as “index,” “investment term,” “interim value adjustment,” and 

 

79  The Commission’s proposed Q&A format is consistent with previous rulemaking experience. See Form 
CRS Relationship Summary; Amendments to Form ADV, Investor Act Release No.5247 (June 5, 2019) [84 
FR 33492 (June 12, 2019)] (adopting question-and-answer format in response to feedback from surveys 
and studies and commenters who noted that “the question-and-answer format is a more effective design 
for consumer disclosures because it focuses on questions to which a consumer wants answers and allows a 
consumer to skim quickly and understand where to get more information.”). The proposed format is also 
supported by prior surveys and studies to help design effective disclosures to retail investors. See, e.g., 
Angela A. Hung, et al., RAND Corporation, Investor Testing of Form CRS Relationship Study (2018), 
available at https://www.sec.gov/about/offices/investorad/investor-testing-form-crs-relationship-
summary.pdf, at p. 23 (reporting that about 60% of respondents favored a question-and-answer format over 
the sample relationship summary format presented in the survey); Kleimann Communication Group, Inc., 
Report on Development and Testing of Model Client Relationship Summary, Presented to AARP and 
Certified Financial Planner Board of Standards, Inc. (Dec. 5, 2018), available at 
https://www.sec.gov/comments/s7-07-18/s70718-4729850-176771.pdf , at p. 4 (“Readers ask questions 
when they read, especially of functional documents. . . . For good design, we want to build upon this 
tendency by identifying key questions investors should or are likely to ask and featuring them prominently 
in the text, thus easing the cognitive task for readers. As a result, we used questions in the headings to 
introduce each section’s major topic.”); Susan Kleimann, Making Disclosures Work for Consumers, 
Presentation to the SEC’s Investor Advisory Committee (June 14, 2018), available at 
https://www.sec.gov/spotlight/investor-advisory-committee-2012/iac061418-slides-by-susan-kleimann.pdf 
(encouraging the use of question-and-answer format, the use of headings to make structure clear, and a 
strong design grid to organize elements, among other disclosure design principles, to promote readability), 
cited in VASP Adopting Release at n.112 and accompanying text. See also Office of Investor Education 
and Assistance, U.S. Securities and Exchange Commission, A Plain English Handbook (Aug. 1998) (“You 
can make complex information more understandable by giving your readers an example using one investor. 
This technique explains why ‘question and answer’ formats often succeed when a narrative abstraction 
fails.”). 

80  The current instructions to Form N-4 require that, notwithstanding 17 CFR 230.421(a), the KIT, Overview, 
and Fee Table must be disclosed in numerical order. General instruction C.3(a) of Form N-4. The proposal 
would change this instruction to reflect the change in order. 



45 

“buffer.”81 Further, investor testing indicated that investors had difficulty in understanding the 

basic features and concepts of RILA contracts.82 The proposed Overview of the Contract 

disclosures would require descriptions and examples to help investors understand these RILA 

features and provide a basis for better understanding the issues flagged by the KIT disclosures.83 

Thus, based on investor testing, we propose to change the location of the KIT so that it appears 

after (rather than before) the Overview of the Contract section. Placing the Overview of the 

Contract section first may similarly provide context of the issues flagged in variable annuity 

KITs. 

Third, we propose to delete Form N-4’s general instruction stating that where the 

discussion of information required by the Overview of the Contract (currently Item 3) or KIT 

(currently Item 2) also responds to the disclosure requirements in other items of the prospectus, 

registrants need not include additional disclosure in the prospectus that repeats the information 

disclosed in the Overview of the Contract or the KIT.84 In administering Form N-4, we have 

observed that this instruction has led to confusion on the part of registrants. For example, while 

both the KIT and Item 5 require disclosures about principal risks, the KIT expressly 

contemplates that more detailed information will be repeated later in the prospectus, specifically 

requiring registrants to provide cross-references to the more detailed prospectus discussion.85 

Item 5 requires registrants to summarize the principal risks of the contract in one place, and was 

 

81  See, e.g., OIAD Report at Section 5, Qualitative Testing, Results from Round 1, Summary of Qualitative 
Testing, Section 6, Quantitative Testing, Summary of Quantitative Testing. 

82  See, e.g., OIAD Report at Section 5, Qualitative Testing, Summary of Qualitative Testing, Section 6 and 7 
Quantitative Testing, Summary of Quantitative Testing, Section 7, Conclusions, Summary of Findings. 

83  See, e.g., proposed Item 2(b)(2) of Form N-4. 
84  General Instruction C.3.(a) of Form N-4. 
85  See instruction 1(b) to Item 2 of Form N-4. 



46 

not intended to permit an insurance company to omit principal risks from that section if  those 

risks were also disclosed in the KIT.86 Moreover, the layered disclosure framework requires a 

degree of repetition to ensure both that the KIT contains key disclosures and that the detailed 

sections that follow contain all of the key information about the given topic. We believe this is 

particularly important for RILAs in light of the challenges our investor testing suggests investors 

have in understanding these products. This way, investors will see the key risks regardless of 

whether they review targeted sections of the prospectus.  

The proposed overall format of the KIT is depicted below:  

Table 3: Proposed Key Information Table 

FEES AND EXPENSES 

Are There Charges for Early Withdrawals?  

Are There Transaction Charges?  

Are There Ongoing Fees and Expenses?  

RISKS 

Is There a Risk of Loss From Poor 
Performance? 

 

Is this a Short-Term Investment?  

What are the Risks Associated with the 
Investment Options?  

  

Is There Any Chance the Insurance 
Company Won’t Pay Amounts Due to Me 
Under the Contract?  

 

 

86  See Item 5 of Form N-4; VASP Adopting Release at text following n.689 (“The principal risks section is 
designed to provide a consolidated presentation of principal risks which can be cross-referenced by 
registrants to reduce repetition that might otherwise occur if the same principal risks are repeated in 
different sections of the prospectus.”). 



47 

RESTRICTIONS 

Are There Restrictions on the Investment 
Options?  

 

Are there any Restrictions on Contract 
Benefits?  

 

TAXES 

What are the Contract’s Tax Implications?  

CONFLICTS OF INTEREST 

How are Investment Professionals 
Compensated?  

 

Should I Exchange My Contract?  

 
a) Fees and Expenses 

RILA contracts typically have implicit fees, expenses, and charges for early or mid-term 

withdrawals that can be confusing or surprising to investors, as observed in our investor 

testing.87 We anticipate that investors would benefit from tailored disclosure about certain 

unique features of a RILA contract’s fee and expense structure as described below to help them 

make informed decisions.  

Early Withdrawal Charges. As RILAs may have surrender charges, we propose to 

require RILA issuers to provide the existing KIT surrender charge disclosure in this first line 

item under the “Fees and Expenses” heading so that RILA investors understand how surrender 

charges are assessed (e.g., that if they make a withdrawal within a specified period after their last 

 

87  See, e.g., OIAD Report at Section 5, Qualitative Testing, Results from Round 1, Results from Round 2. 



48 

premium payment, they may pay a significant surrender charge that will reduce the value of their 

investment).88 This disclosure must include the maximum surrender charge, the maximum 

number of years that a surrender charge may be assessed, and an example of the maximum 

surrender charge an investor could pay in dollars based on a $100,000 investment. In a change to 

the current form requirements, we also are proposing to require that offerings of both variable 

annuities and RILAs disclose that this loss will be greater if there is a negative contract 

adjustment, taxes, or tax penalties, to make clear that an investor may lose more than just the 

surrender charge upon an early withdrawal. 

We also are proposing to require specific disclosure on contract adjustments, which can 

result in investor losses if the investor withdraws money from an index-linked option, or 

withdraws money from the RILA entirely before the end of a specified period.89 Specifically, if 

the contract includes contract adjustments, the insurance company would be required to include a 

statement that if all or a portion of account value is removed from an index-linked option or from 

the contract before the expiration of a specified period, the insurance company will apply a 

contract adjustment, which may be negative. Similar to the disclosures relating to surrender 

charges, this statement would include the maximum potential loss (as a percentage of the 

investment) resulting from a negative adjustment (e.g., “[y]ou could lose up to XX% of your 

investment due to the contract adjustment”). The insurance company also would be required to 

provide an example of the maximum negative adjustment that could be applied (in dollars) 

 

88  Proposed instruction 2(a) to Item 3 of Form N-4. 
89  As noted above, contract adjustments include adjustments made when amounts are removed prematurely 

from an index-linked option, often referred to as interim value adjustments, as well as adjustments made 
when amounts are removed prematurely from the contract, often referred to as market value adjustments. 
Thus, a specified period would include index-linked option crediting periods (which again, are typically 
referred to by insurance companies as “investment terms” or “terms”), as well as any specified period 
relating to a market value adjustment.  



49 

assuming a $100,000 investment (e.g., “[i]f you allocate $100,000 to an investment option with a 

3-year crediting period and later withdraw the entire amount before the 3 years have ended, you 

could lose up to $90,000 of your investment. This loss will be greater if you also have to pay a 

surrender charge, taxes, and tax penalties.”). We also propose to require the insurance company 

to provide a brief narrative description of the contract transactions subject to a contract 

adjustment (e.g., withdrawals, surrender, annuitization, etc.) as part of the response to this item 

to make clear to investors the range of transactions that could result in a contract adjustment. 

Transaction Charges. The second line item in the “Fees and Expenses” section of the 

proposed amended KIT, “Are there transaction charges?,” would require registrants to disclose 

that the investor may also be charged for other transactions in addition to surrender charges (and 

now contract adjustments), along with a brief narrative description of the types of such charges 

(e.g., front loads, charges for transferring cash value between investment options, etc.).90 This 

line item is designed to provide a simple narrative description to alert investors that surrender 

charges and contract adjustments are not the only transaction charges they could pay. We are 

proposing to require RILA issuers to provide this disclosure. 

Ongoing Fees and Expenses. The third line item in the “Fees and Expenses” section, 

“Are there ongoing fees and expenses?,” is designed to alert investors that they also will bear 

recurring fees on an annual basis. This item currently requires the insurance company to disclose 

(1) a minimum and maximum annual fee table and (2) a lowest and highest annual cost table, 

both along with applicable legends.91 The minimum and maximum annual fee table is designed 

 

90  Proposed instruction 2(b) to Item 3 of Form N-4. 
91  See instruction 2(c) to Item 2 of Form N-4. The minimum and maximum annual fee table requires a tabular 

description of the fees and expenses that an investor may pay each year, depending on the investment 
options chosen. This includes minimum and maximum percentages for: base contract fees; portfolio 
 



50 

to consolidate the more detailed information in the Fee Table that appears later in the prospectus, 

in order to minimize the need for investors to perform complex calculations to understand the 

fees they will pay.92 The lowest and highest annual cost table is designed to provide investors 

with a high-level cost illustration that will give investors a tool to understand the basic cost 

framework of the contract.93 We are proposing to require RILA issuers to provide this 

disclosure.94 

We also are proposing to require that where a contract imposes limits on gains on the 

amount an investor can earn on an index-linked option, insurance companies disclose that they 

impose these limits on gains and that they serve as an implicit ongoing fee.95 In other words, as a 

result of limits on gains imposed under a contract, an investor is sacrificing the potential for 

investment gains that exceed the cap or other limit on upside performance. Specifically, 

insurance companies would prominently state that they impose an implicit ongoing fee on index-

linked options by limiting, through the use of a cap, participation rate, or some other rate or 

measure, the amount an investor can earn on an index-linked option. Further, insurance 

companies would state that imposing this limit helps the insurance company make a profit on the 

index-linked option, and that, in return for accepting this limit on index gains, an investor will 

receive some protection from index losses. This disclosure would be required to precede the 

 

company fees and expenses; and optional benefits available for an additional charge. The lowest and 
highest annual cost table requires a tabular description of the lowest and highest cost an investor could pay 
each year, based on current charges and a set of standardized assumptions (e.g., $100,000 investment and 
5% annual appreciation).   

92 See VASP Adopting Release at section II.A.1.c.ii.(i), n.144 and accompanying text; see also Item 4 of 
Form N-4. 

93 See VASP Adopting Release at section II.A.1.c.ii.(i), n.147 and accompanying text. 
94  See proposed instruction 2(c) to Item 3 of Form N-4.  
95  See proposed instruction 2(c)(i)(G) to Item 3 of Form N-4. 



51 

minimum and maximum annual fee table. If the contract offers an index-linked option subject to 

limits on gains but does not impose any explicit ongoing fees or expenses under the contract, and 

thus there would be no need to include the minimum and maximum annual fee and lowest and 

highest cost tables, the insurance company would include this disclosure in lieu of such tables.96 

Where there are no explicit ongoing fees, minimum and maximum annual fee and cost tables 

showing zero fees could mislead investors because an index-linked option imposing limits on 

gains has implicit fees inherent in limiting upside index participation. 

Lastly in this line item, we propose to revise the last sentence in the required legend in 

the lowest and highest annual cost table to include the underlined language: “This estimate 

assumes that you do not take withdrawals from the Contract, which could add surrender 

charges and negative Contract Adjustments that substantially increase costs.”97 This would 

further alert investors to the cost impact of a contract adjustment if they withdraw money early. 

b) Risks  

Risk of Loss. Under the first line item in the amended KIT under the heading “Risks,” “Is 

there a risk of loss from poor performance?,” we would, as required by an existing instruction in 

the form, require RILA issuers to state that an investor can lose money by investing in the 

contract. RILAs, like variable annuities, are subject to the risk of investment loss. We also are 

proposing to amend this instruction to provide that, if an annuity contract offers an index-linked 

option, the insurance company must disclose, as a percentage, the maximum amount of loss an 

investor could experience from negative index performance, after taking into account the 

 

96  Proposed instruction 2(c)(iii) to Item 3 of Form N-4. 
97  See proposed Instruction 2(c)(ii)(A) to Item 3 of Form N-4. Currently, this legend only refers to surrender 

charges, not negative contract adjustments. 



52 

minimum guaranteed limit on index loss provided under the contract.98 For example, with a 

guaranteed buffer of -10%, a registrant would disclose that investors could lose up to 90% of 

their investment in an index-linked option due to poor index performance even with the loss 

limitation feature. This amendment is designed to make clear to investors investing in an index-

linked option that they can still lose money even though index-linked options typically include 

features designed to limit investment loss. 

Short-Term Investment. The second line item under the Risks heading, “Is this a short-

term investment?,” currently requires a statement that the contract is not a short-term investment 

and is not appropriate for an investor who needs ready access to cash along with a brief 

explanation. This statement and an accompanying brief explanation is equally applicable to 

RILAs and we therefore would require RILA issuers to make the same disclosure.99 We also are 

proposing to amend this item to require issuers of RILAs and variable annuities to state that (1) 

amounts withdrawn from the contract may result in surrender charges, taxes, and tax penalties; 

and (2) if applicable, that amounts removed from an index-linked option or the contract before a 

specified period may also result in a negative contract adjustment and loss of positive index 

performance. These disclosures are designed to make clear to investors some of the key reasons 

why these investments are not short-term investments. These disclosures are particularly 

important for an investor considering a RILA in light of the potential negative consequences if 

the investor withdraws money early from a particular index-linked option or the contract. We are 

not limiting these disclosures to contracts with index-linked options, however, because these 

disclosures may be equally material for a variable annuity. To further illustrate that index-linked 

 

98  See proposed Instruction 3(a) to Item 3 of Form N-4. 
99  See proposed instruction 3(b) to Item 3 of Form N-4. 



53 

options are not short-term investments even though they may have a short crediting period, we 

also propose new risk disclosure for index-linked options that would require issuers offering 

such investment options to state that contract value will be reallocated at the end of the crediting 

period according to the investor’s instructions, and to disclose the default reallocation in the 

absence of such instructions. 

Risks Associated with Investment Options. The third line item under the Risk heading, 

“What are the risks associated with the investment options?,” is intended to focus on the general 

risk of poor investment performance.100 Currently, the KIT therefore requires the insurance 

company to state that: (1) an investment in the contract is subject to the risk of poor investment 

performance and can vary depending on the performance of the investment options available 

under the contract; (2) each investment option will have unique risks; and (3) the investor should 

review these investment options before making an investment decision. We are proposing 

conforming changes to the required statement to refer to index-linked options now that RILAs 

are included on Form N-4.101 

We also are proposing to require the insurance company to provide additional 

information about any index-linked options offered under the contract to highlight how the 

insurance company limits the investor’s participation in gains and losses of the index. For the 

risk of limited upside, the insurance company would be required to (1) state that the cap, 

participation rate, or some other rate or measure, as applicable, will limit positive index returns 

(e.g., limited upside), (2) provide an example for each type of limit imposed under the contract 

(e.g., if the index return is 12% and the cap rate is 4%, the insurance company will credit the 

 

100  VASP Adopting Release at the text accompanying n.170. 
101  See proposed instruction 3(c) to Item 3 of Form N-4. 



54 

investor 4% in interest at the end of the term), and (3) prominently state that this may result in 

the investor earning less than the index’s return.102  

For the risk of limited protection in the case of market decline, the insurance company 

would be required to (1) state that the floor, buffer, or some other rate or measure, as applicable, 

will limit negative index returns (e.g., limited protection in the case of market decline), (2) 

provide an example for each type of limit imposed under the contract (e.g., “if the Index return is 

-25% and the buffer rate is -10%, we will credit -15% (the amount that exceeds the buffer rate) at 

the end of the crediting period”), and (3) prominently state that even after limiting a negative 

index return, investors could still lose up to XX% of their investment.103 The disclosure in this 

row of the KIT is designed to highlight that each investment option, including an index-linked 

option, will have unique risks. The proposed disclosure on index-linked options would highlight 

one of the central economic tradeoffs index-linked options present: that an investor will sacrifice 

the potential for returns if the index goes up in exchange for some protection from loss if the 

index goes down.  

Insurance Company Risks. The fourth line item under the Risk heading, “Is there any 

chance the insurance company won’t pay amounts due to me under the contract?,” is meant to 

alert investors that any obligations, guarantees, or benefits under the contract that may be subject 

to the claims-paying ability of the insurance company will depend on the financial solvency of 

the insurance company.104 Form N-4 therefore currently requires the insurance company to 

 

102  See proposed instruction 3(c)(A) to Item 3 of Form N-4. 
103  See proposed instruction 3(c)(B) to Item 3 of Form N-4. 
104  See VASP Adopting Release at section II.A.1.c.ii.(ii); see also proposed Instruction 3(d) to Item 2 of Form 

N-4 (“State that an investment in the Contract is subject to the risks related to the Insurance Company, 
including that any obligations (including under any Fixed Options and Index-Linked Options), guarantees, 
or benefits are subject to the claims-paying ability of the Insurance Company.”).  



55 

include a statement to this effect in this row of the KIT and either to provide the insurance 

company’s financial strength ratings or state, if applicable, that they are available upon request. 

We propose to require a RILA issuer to provide the same statement, with a conforming change to 

include index-linked options as an obligation of the insurance company.105  

c) Restrictions 

Investments. We propose to require RILA issuers to include the disclosure required by the 

first line item under the heading “Restrictions,” “Are there limits on the Investment Options?” 

This current item would be modified to require the insurance company to state whether there are 

any restrictions that may limit the investment options that an investor may choose, as well as any 

limitations on the transfer of contract value among investment options.106 As these limitations 

can exist for RILAs, we propose to require RILA issuers to make this disclosure so that investors 

can assess that disclosure in determining whether the RILA is an appropriate investment for 

them. 

Currently, the form also generally requires the insurance company to state that it reserves 

the right to remove or substitute portfolio companies as investment options, if applicable. 

Insurance companies typically reserve the right to change the index-linked options that are 

available under a contract as well as key features of available index-linked options. To alert 

investors that the available index-linked options and key terms of those index-linked options may 

 

105  See proposed instruction 3(d); see also infra section II.B.7(b) (discussing changes of Form N-4’s defined 
terms, including replacing “depositor” with “insurance company,” to facilitate inclusion of RILAs on the 
form). 

106  See proposed instruction 4(a) to Item 3 of Form N-4. The current item requires the insurance company to 
state whether there are any restrictions that may limit the investments that an investor may choose, as well 
as any limitations on the transfer of contract value among portfolio companies. Consistent with the 
corresponding changes made to defined terms, we would also clarify that this item applies to any 
investment option, not just the portfolio companies available as investment options under a variable option. 
See infra section II.B.7. 



56 

change in the future we are proposing to require the insurance company to state any reservation 

of its rights under the contract, including, if applicable, the right to (1) add or remove index-

linked options, (2) change the features of an index-linked option from one crediting period to the 

next, including the changes to the index and the current limits on gains and limits on index losses 

(subject to contractual minimum guarantees), and (3) substitute the index of an index-linked 

option during its crediting period. We are also proposing to require that insurance companies 

disclose any right to stop accepting additional purchase payments, which may be significant to 

investors given the impact this reservation can have on investors’ ability to accumulate contract 

value for retirement, grow the death benefit, and increase optional benefit values. 

Contract Benefits. The second line item under “Restrictions,” “Are there any restrictions 

on contract benefits?” requires a statement about whether there are any restrictions or limitations 

relating to benefits offered under the contract, and/or whether a benefit may be modified or 

terminated by the insurance company. It also requires a statement that withdrawals that exceed 

limits specified by the terms of a contract benefit may affect the availability of the benefit by 

reducing the benefit by an amount greater than the value withdrawn and/or could terminate the 

benefit. We are proposing that this item be broadened to include disclosure on restrictions or 

limitations relating to any benefit under the contract, not just optional benefits (as currently 

required). While a benefit under the contract might be characterized as standard, it could have 

restrictions that should be disclosed in the KIT because of the benefit’s importance to the 

investor’s rights under the contract, such as a proportionate withdrawal calculation under a 



57 

standard death benefit.107 We propose to require RILA issuers to include this disclosure, as such 

disclosure is equally applicable to RILAs as it is to variable annuities. 

d) Taxes 

We also propose to require RILA issuers to include the line item under the heading 

“Taxes,” “What are the Contract’s tax implications?”108 This line item is designed to alert 

investors to the tax implications of variable contracts and, as we propose to amend this item, of 

RILAs. It currently requires a statement that an investor should consult with a tax professional to 

determine the tax implications of an investment in, and purchase payments received under, the 

contract. The insurance company must also state that there is no additional tax benefit to the 

investor if the contract is purchased through a tax-qualified plan or individual retirement account 

(“IRA”), and that withdrawals will be subject to ordinary income tax and may be subject to tax 

penalties. We propose to subject RILAs to this requirement because the same tax considerations 

apply. 

e) Conflicts of Interest 

Investment Professional Compensation. We propose to require RILA issuers to include 

the first line item under the heading “Conflicts of Interest,” “How are investment professionals 

compensated?”109 This current line item for variable contracts is designed to alert investors to the 

existence of compensation arrangements for investment professionals and the potential conflicts 

of interest arising from these arrangements.110 It requires issuers to disclose that an investment 

 

107  See proposed instruction 4(b) to Item 3 of Form N-4. Similarly, we are proposing a change to the 
discussion in the overview of the contract item about contract features that would broaden that discussion 
to cover both optional and standard contract benefits. See proposed Item 2(c) of Form N-4. 

108  See proposed instruction 5 to Item 3 of Form N-4. 
109  See proposed instruction 6(a) to Item 3 of Form N-4. 
110 See VASP Adopting Release at section II.A.1.c.ii.(v). 



58 

professional may be paid for selling the contract to investors. An issuer must describe the basis 

upon which such compensation is typically paid (e.g., commissions, revenue sharing, 

compensation from affiliates and third parties). An issuer providing the required disclosure also 

must state that investment professionals may have a financial incentive to offer or recommend 

the contract over another investment. The same compensation arrangements and potential 

conflicts are relevant for RILAs, and we therefore are proposing to require an insurance 

company registering a RILA to provide the same disclosure. 

Exchanges. We propose to require RILA issuers to include the second line item under the 

heading “Conflicts of Interest,” “Should I exchange my Contract?,” with conforming changes.111 

This current line item for variable contracts is designed to alert investors to potential conflicts of 

interest that may arise from contract sales that stem from exchanges.112 It requires issuers to state 

that some investment professionals may have a financial incentive to offer a new contract in 

place of the one owned by the investor. An issuer must further state that investors should only 

exchange their contract if they determine, after comparing the features, fees, and risks of both 

contracts, that it is preferable to purchase the new contract rather than continue to own the 

existing contract. These same considerations apply to an investor considering an exchange 

involving a RILA. In a change that would apply to variable annuities and RILAs, and to put 

investors on notice that there may also be costs or charges associated with terminating an 

existing contract, we are also proposing that issuers disclose in this legend that investors should 

consider any fees or penalties to terminate the existing contract in considering whether to 

exchange a contract.  

 

111  See proposed instruction 6(b) to Item 3 of Form N-4; see also infra section II.B.7. 
112 See VASP Adopting Release at section II.A.1.c.ii.(v).  



59 

f) Requests for Comment on Key Information Table 

We request comment generally on the proposed amendments to the KIT, and specifically 

on the following issues. 

14. Should we require all issuers to provide the “Overview of the Contract” disclosure 

before the KIT, as proposed? Would this provide relevant context for an investor 

to help understand the KIT disclosure or, conversely, would it detract from the 

KIT’s efficacy in conveying key information about the contract up front in a 

consistent format? Are there other reasons to precede the KIT disclosure with the 

current “Overview of the Contract” disclosure? Alternatively, should we allow 

issuers to maintain the current order of disclosure and include new rows in the KIT 

to provide contract overview disclosure to investors? Would this be a more 

effective way to provide context for investor to understand the KIT, or would it 

lead to disclosure that is too lengthy for the KIT format and potentially duplicate 

disclosure in the Overview of the Contract section of the prospectus? 

Alternatively, should we require the Overview of the Contract to precede the KIT 

only in prospectuses offering annuity contracts with index-linked options, rather 

than for all issuers? 

15. Should we add disclosure to the KIT regarding whether index-linked options 

offered under the contract are based on a price return index (i.e., an index that only 

reflects price movements of the security) or a total return index (i.e., one that 

includes additionally factors like dividends), so that, where appropriate, investors 

understand whether or not they can expect their account value to increase as a 

result of dividends?  



60 

16. Should we add any additional headings and sub-headings to the KIT, for example, 

a new heading “Contract Overview,” with related line items or sub-headings 

“What is the purpose of the contract?,” “What is the time period for measuring 

growth (or loss) on my contract value?,” and/or “Who may the contract be 

appropriate for?”? Would this information be helpful to an investor in providing 

context for the KIT disclosure or, conversely, would these requirements lead to 

lengthy disclosure that makes the KIT less investor friendly?  

17. Would rephrasing the topics of the KIT line items in a question format and 

requiring the descriptions in the right-hand column of the KIT to be presented in 

an answer format, as proposed, be helpful for investors making an initial purchase 

of an annuity contract? Should we make the Q&A format mandatory for all issuers 

that use Form N-4? Or should we instead require that issuers state the line items in 

the left-hand column as brief descriptions of the topics to be detailed in the right-

hand column of the KIT, as is currently required? Should any of the required line 

items or sub-headings be worded in a different way, or using different 

terminology, than the proposal would require?  

18. Should we allow issuers to change the wording of the line item questions in 

circumstances where the changes would not impede investor comprehension and 

clear, consistent disclosure? Could this undermine standardized disclosures and 

investors’ ability to make comparisons of certain disclosure topics among RILA 

and variable annuity prospectuses, or would issuers’ ability to customize the 

disclosure lead to more informed investor decisions about that particular RILA?61 

19. Should we require issuers to add a new column in the KIT labeled “Location in the 

Prospectus” or similar caption, and place it next to the relevant disclosure 

presented in the table to provide hyperlinked cross-references directly to the 

location in the statutory prospectus where the investor can find more detailed 

information about the subject matter or should we, as proposed, continue to permit 

issuers to provide cross-references either within the table row or presented as an 

additional column? Are there any particular sub-headings or captions that would 

help investors identify where to find information?  

20. Should we mandate particular examples or illustrations in the KIT? For example, 

should we require a chart of historical index performance with the guaranteed 

minimum cap overlaid? Should we require a table showing examples of the dollar 

amounts of losses and gains, without fees, an investor would face in a variable 

annuity as compared to RILAs with various floors, buffers, and caps over a four-

year period assuming various index movements?113 Are there other useful 

examples or illustrations currently provided by RILAs that help to illustrate their 

structure effectively to investors that we should include in the KIT? For example, 

should we require a graphic in the KIT to illustrate surrender charges and contract 

adjustments during different time periods of the contract? If so, what should the 

requirements for these graphics or illustrations be? Should we require illustrations 

in the KIT showing how caps, floors, and/or buffers could affect an investor’s 

returns across different market scenarios? If so, what should these scenarios be? As 

 

113  See N.Y. Comp. Codes R. & Regs. tit. 11, App. 28.8 (2023). 



62 

another example, we request comment below on requiring insurance companies to 

disclose the difference between a hypothetical $100,000 investment in an index-

linked option and the value, or the cost to assemble, the economic components 

underlying the index-linked option.114 Should that disclosure be required in the 

KIT?  

21.  We have proposed that insurance companies include disclosures in the KIT 

regarding any limits on gains the RILA imposes, including an illustrative example 

demonstrating the operation of those limits. Would this disclosure be improved by 

requiring that the example conform to any specific parameters? Would other 

examples be helpful? For example, should we require that the example use the 

most common limit on gains offered under the RILA for the previous year? Should 

we require that the example disclose the amount of gains an investor would have 

given up due to the limit over the prior ten years, based on the index’s performance 

during that time and assuming the limit on gains discussed in the example applied 

during each of those ten years?  Should we require that the example use only round 

numbers? 

22. Should we allow or require issuers to provide cross-references to charts or other 

graphics designed to facilitate investor understanding of RILAs, including, e.g., 

educational resources designed by the Commission staff? Should we require 

issuers to provide these hyperlinked cross-references in the current right-hand 

column of the KIT directly after the relevant sentence of disclosure? Would the 

 

114  See Section II.B.3.b. 



63 

KIT be more succinct and easier to read if the hyperlinked cross-references were 

placed on the cover page of the prospectus instead of the KIT? Would requiring 

the registrant to state “More information can be found at:” before or after these 

cross-references help investors easily find the information they may need to make 

an informed investment decision? Should we require cross-references to other 

prospectus sections to include a specific page number in the prospectus where an 

investor could find the information? 

23. Besides hyperlinks, are there other technological tools that would help an investor 

find information that is cross-referenced in the KIT or on the cover page of the 

prospectus, such as QR codes or other technological tools? 

24. Is the level of detail of the disclosure that we propose in each line item of the KIT 

appropriate? Does it strike the right balance between providing enough 

information to alert an investor to the most salient facts (including ongoing 

implicit fees, expenses, risks, and conflicts) of the RILA contract, but not too 

much, or too detailed information? If not, how should we modify the table and/or 

the instructions? Are there other key features of RILA contracts that RILA issuers 

should disclose in the KIT to help investors make an informed investment 

decision? 

25. RILAs are frequently marketed as a way to protect against investment losses 

through loss-limiting features such as buffers and floors. Should we require RILA 

issuers to provide more detailed disclosures about how these loss-limiting features 

have affected RILA investors historically? For example, would investors be better 

positioned to make informed decisions if we were to require RILA issuers to 



64 

disclose: (a) the total number of investor crediting periods (across all investors and 

index-linked options) that utilized a loss-limiting feature for a certain historical 

period (e.g., the past five years); (b) the percentage of those investor crediting 

periods where an investor’s contract value benefited from a loss-limiting feature 

(because the feature eliminated or reduced a negative credit resulting from the 

performance of the index-linked option); and (c) the percentage of those investor 

crediting periods where an investor’s contract value was not impacted by a loss-

limiting feature. Should a RILA issuer have experience with a certain minimum 

number of crediting periods in order to be subject to this disclosure? What should a 

RILA issuer disclose if their experience with loss-limiting features does not meet 

the minimum threshold? Where in the prospectus would be the appropriate 

location for this information? For example, if we require this disclosure, do 

commenters feel it would be best positioned as part of the KIT, in Item 6 (in the 

Limits on Index Losses section), or in the Contract Overview? Are there other 

disclosures that commenters would recommend in the alternative as a way to 

increase investor knowledge about the utility of loss-limiting features and their 

ability to positively affect investors’ contract values? Whether or not we require 

more detailed disclosures about the historical effects of loss-limiting features, 

should we require similar disclosure about the historical effects of limits on gains 

(i.e., upper limits on an investor’s ability to participate in an index-linked option’s 

upside performance)? Should we require disclosure comparing the economic 

effects of the limits on gains to the limits on losses? For example, should we 

require disclosure of the number of periods in which each limit would have 



65 

actually limited an investor’s losses or capped an investor’s gains? Should we 

require disclosure of the dollar value of losses an investor would be protected 

against compared to gains an investor would give up over a prescribed period of 

time, such as the past 10 years? 

26. Are there any particular legends that should be included in the KIT, e.g., “We will 

not return your money at the end of the crediting period unless you tell us to,” 

“The contract adjustment applies in addition to any surrender charge,” “You may 

earn less than the index’s return,” and/or “You may lose up to [X]% of your 

investment if you withdraw your money before the end of a crediting period. This 

loss can be greater if there is a surrender charge, taxes, and/or tax penalties”? If so, 

what legends and why? 

27. Is the process of what happens at the end of the crediting period adequately 

highlighted in the proposed KIT? Should insurance companies be required to 

provide more specific details, either in the KIT or elsewhere in the prospectus, 

about how investors can choose an investment option at the end of the crediting 

period and the limitations on those choices? 

28. Would the disclosure that a RILA issuer would provide in response to the proposed 

“Fees and Expenses” line items convey the appropriate amount of information to 

investors and concisely alert investors to the most important fees, charges, 

penalties, and expenses associated with the RILA contract?  

29. Should the proposed “Fees and Expenses” line item, “Are there charges for early 

withdrawals?,” include disclosure both about the surrender charges and contract 

adjustments, as proposed? Would this disclosure sufficiently alert investors to the 



66 

typical contract adjustment of a contract and its impact in reducing contract value 

(in addition to any surrender charge) if the investor withdraws money before the 

expiration of a specified period? Alternatively, should we sub-divide this line item 

into two line items, with the one focused on surrender charges and the other titled 

(for example) “Are there penalties for mid-term withdrawals?,” focused on 

contract adjustments? Would this help an investor to understand both concepts 

better? Or would sub-dividing the line item cause confusion, for example by 

making it seem as if a surrender charge and a contract adjustment could not apply 

simultaneously? If so, should we require an explicit disclosure that they could 

apply simultaneously? 

30. Would the Minimum and Maximum Annual Fee and Lowest and Highest Cost 

tables assist investors in understanding the costs of their investment and help them 

compare the costs of different investment options and optional benefits in the 

RILA context? Should we modify the proposed disclosure or require other 

additional information to accompany the tables? 

31. Would the proposed disclosure that an issuer would provide about contracts that do 

not impose ongoing fees and expenses adequately convey the implicit ongoing fees 

of contracts with index-linked options that have features that limit positive index 

return? If not, should we modify the proposed disclosure or require additional 

information from issuers? 

32. Would the disclosure that a RILA issuer would provide in response to the proposed 

“Risks” line items adequately convey an overview of the risks of investing in a 

contract with an index-linked option? Are there other risks of investing in these 



67 

contracts that we should require a registrant to disclose in the proposed KIT? For 

example, should we require RILA issuers to state that an investor can lose money 

by investing in these contracts including a loss of principal? Alternatively, should 

we require all issuers to state this, not just RILA issuers?  

33. Would the disclosure that a RILA issuer would provide in response to the proposed 

“Restrictions” line items convey the appropriate amount of information about 

certain restrictions that various contract options may entail, in light of the goals of 

the proposed KIT and the unique nature of a RILA? Should an issuer be required 

to disclose information about restrictions in the KIT other than those associated 

with the contract’s investment options and benefits? If so, what? Instead, should 

we provide flexibility by permitting issuers to disclose other restrictions at their 

discretion? Do commenters agree that our proposal to require disclosure about 

restrictions on contract benefits generally (as opposed to the current requirement 

which is limited to optional benefits) is appropriate? 

34. Is the disclosure that a RILA issuer (along with other issuers that use Form N-4) 

would be required to provide in response to the proposed “Taxes” line item 

appropriate, in light of the goals of the proposed KIT? Given that some investors in 

these products may not have the means or ability to consult a tax professional, 

should we require additional disclosures in addition to the required statement that 

investors should consult a tax professional? For example, should a RILA issuer be 

required to consider which tax consequences are most likely be faced by retail 

investors and to provide general information regarding those consequences? For 

example, should an issuer be required to emphasize more prominently that 



68 

withdrawals will be subject to ordinary income tax, and not the capital gains rates? 

Should the line item require disclosure of the specific tax penalties and 

requirements that investors in annuity contracts may incur (e.g., penalties for 

withdrawal before age 59½, or that purchases through a tax-qualified plan may be 

subject to required minimum distribution each year beginning at age 70½)? 

35. Are the disclosures that a RILA issuer (along with other issuers that use Form N-4) 

would be required to provide in response to the proposed “Conflicts of Interest” 

line items appropriate, in light of the goals of the proposed KIT? Would these 

disclosures adequately apprise investors of the potential conflicts that arise when 

their investment professional is compensated for recommending an investment into 

a new, or an exchange from, an existing RILA contract or variable annuity 

contract? Should we revise these proposed disclosure requirements, and if so, 

how?  

36. Do the instructions associated with each of the proposed line items clearly explain 

what an issuer would be required to disclose? In keeping with the structured format 

of a tabular presentation, we sought to promote concise disclosure by largely 

directing issuers to state, rather than to explain, certain information in response to 

the required line items. Should the instructions prescribe specific language or 

should issuers have flexibility in drafting their responses? Are there any particular 

instructions that we should include or modify in any way, for clarity or for any 

other reason? 

37. Should we require particular terms in the KIT (e.g., those that are defined in a 

related glossary or list of definitions that the insurance company chooses to 



69 

include) to be formatted in a way that will emphasize them, or indicate that they 

are defined elsewhere in the prospectus, for example by using bold and/or italic 

font? 

38. Should we apply the structural changes we are proposing to the KIT in other 

variable insurance contract registration forms, that is, Forms N-3 and N-6? The 

principles we outlined above regarding the potential efficacy of these changes 

could be just as applicable in the context of those forms as in the context of Form 

N-4. For example, should we apply the proposed requirements for Forms N-3 and 

N-6 issuers to present all disclosures in the KIT in a Q&A format and to begin 

each response with a “yes” or “no” in bold text when answering a question 

presented in a given row of the KIT, unless the context otherwise requires? 

Similarly, should we require in those forms that issuers include in their required 

legends on contract exchanges that investors consider any fees or penalties to 

terminate the existing contract before exchanging their contracts?  

3. Principal Disclosure Regarding RILAs (Items 2, 6, and 17) 

We are proposing amendments to Form N-4 to provide investors with the principal 

disclosures regarding RILAs and the index-linked options available under the contract in three 

items of the form. First, investors would receive a concise description of the basic information 

about any index-linked option available under the contract as well as any contract adjustments in 

Item 2 (Overview of the Contract), which, as discussed above, would appear before the KIT.115 

Second, investors would be provided with detailed information about the index-linked options 

 

115  Because we propose to require the KIT to appear before the Overview of the Contract, current Item 3 
(Overview of the Contract) would be renumbered as Item 2. 



70 

available under the contract in Item 6 (Description of the Insurance Company, Registered 

Separate Account, and Investment Options). Lastly, investors would be provided with a 

summary information table, with legends highlighting risks, that outlines the available index-

linked options in Item 17 (Investment Options Available Under the Contract). These 

amendments build on the existing disclosure requirements in each item to help ensure that 

investors have key information about the annuity contract and available investment options, 

regardless of whether the contract is a variable annuity, a RILA, or combination contract offering 

both variable and index-linked options. 

a) Overview of the Contract (Item 2) 

We are proposing to amend Item 2 (Overview of the Contract) to include information 

about RILAs generally and require the insurance company to provide an overview of certain key 

elements of any index-linked options offered under the contract and to highlight any contract 

adjustments. This item is designed to describe certain basic and introductory information about 

the contract and its benefits.116 It currently requires a concise description of the contract. This 

description must include information about (1) the contract’s purpose (e.g., to help the investor 

accumulate assets through an investment portfolio), (2) the phases of the contract (the 

accumulation (savings) and annuity (income) phases) including a discussion of the investment 

options available under the contract, and (3) the primary features of the contract (such as death 

benefits).  

We would require insurance companies to provide this existing disclosure when 

registering RILA offerings, adjusted to account for the specifics of RILAs, because it is equally 

 

116  See VASP Adopting Release at text accompanying n.207. 



71 

relevant for these types of annuity contracts. In particular, in addition to the general information 

about the contract already required by Form N-4, the following information would be required 

with respect to any index-linked option offered under the contract: 

• A statement that the insurance company will credit positive or negative interest at 

the end of a crediting period to amounts allocated to an index-linked option based, 

in part, on the performance of the index; 

• A statement that an investor could lose a significant amount of money if the index 

declines in value and prominent disclosure of the maximum amount of loss (as a 

percentage) an investor could experience from negative index performance, after 

taking into account the minimum guaranteed limit on index loss provided under 

the contract; and 

• An explanation that the insurance company limits the negative or positive index 

returns used in calculating interest credited to an index-linked option at the end of 

its crediting period, accompanied by a brief description of the manner in which 

such returns may be limited, along with an example and disclosure of the 

minimum limit on index losses guaranteed for the life of the contract for any 

index-linked option.117 

We also are proposing to require the insurance company to state, if applicable, that an 

investor could lose a significant amount of money due to the contract adjustment if amounts are 

removed from an index-linked option or from the contract prior to the end of a specified 

period.118 The issuer would also provide a brief description of the transactions subject to a 

 

117  See proposed Item 2(b)(2)(i) through(iv) of Form N-4. 
118  See proposed Item 2(d) of Form N-4. 



72 

contract adjustment. We would require a prominent statement, as a percentage, of the maximum 

amount of loss an investor could experience from a negative contract adjustment and that this 

loss could be greater due to surrender charges and tax consequences. 

These disclosures, together, are designed to highlight upfront some of the key elements of 

a RILA. The required disclosure about any index-linked option offered under the contract would 

highlight for investors the key features of these investment options in general: that returns are 

based in part on an index, that investors could still lose a significant amount of money under the 

contract, and that there are limits on both positive and negative index performance. The required 

disclosure on contract adjustments would highlight a separate but important consideration for an 

investor considering investing in a RILA: that in addition to any losses from poor index 

performance, the investor also can lose a significant amount of money if the investor takes 

money out of an index-linked option or the contract early. These disclosures collectively also 

would provide context for the KIT, which immediately follows this item under the proposal, as 

well as context for more detailed disclosures that would appear elsewhere in the prospectus. 

In addition to these items that are specific to RILAs, we also are proposing to expand the 

current requirements for disclosures regarding optional benefits in Form N-4. Currently, when 

summarizing a contract’s primary features, the form requires a discussion of any optional 

benefits.119 A benefit under the contract, such as a non-optional guaranteed living benefit, might 

be characterized as a standard (i.e., not optional) benefit but nonetheless be a key feature of the 

contract that should be highlighted for investors in the overview section of the prospectus. We 

are therefore proposing to require that the discussion of benefits cover all of the primary contract 

 

119  See current Item 3(c) of Form N-4. 



73 

benefits, not just optional benefits.120 This requirement would apply to all contracts registered on 

the form. 

We request comment on the proposed summary disclosures contained in Item 2. 

39. Is the proposed information on index-linked options and contract adjustments 

appropriate? Is there other or different information we should require? For 

example, we are proposing to require RILA issuers to include examples of how 

limits on gains and downside protection operate but do not mandate a form of 

presentation. Should we require these examples be provided in a graphical 

presentation, or require only a narrative example? Should we require the examples 

be converted into a dollar amount? Would investors understand the examples more 

readily if we did this? As another example, should we require RILA issuers to 

briefly summarize the index crediting methodologies available under the contract?  

40. Should we require the proposed disclosures for index-linked options and contract 

adjustments in Item 2, including the existing disclosure to be provided in the 

context of a RILA? Is this information necessary for investors to understand the 

other disclosures in the prospectus? 

41. Should we, as proposed, broaden the current discussion of the primary contract 

features to include a discussion of contract benefits generally, not just optional 

benefits (the current focus of the disclosure requirement)? 

b) Description of Insurance Company, Registered Separate 

Account, and Investment Options (Item 6) 

 

120  See proposed Item 2(c) of Form N-4; see also supra footnote 107 and accompanying text. 



74 

We propose to amend Item 6 of Form N-4 to modify certain existing disclosure 

requirements and to expand the item to include new disclosures for RILAs. Proposed Item 6(d), 

discussed further below, would set forth most of the substantive new disclosure requirements for 

contracts that include index-linked options. We would also include new disclosures for any fixed 

options provided as part of the contract. The information that would be required by the proposed 

amendments is designed to convey key aspects of each index-linked option offered under the 

contract to investors. 

As an initial matter, the proposed amendments to Item 6 would largely retain the existing 

requirement to provide a concise discussion about the insurance company, registered separate 

account, and variable options, subject to certain modifications in nomenclature to implement 

definitional changes and minor restructuring to accommodate the addition of RILAs to the 

form.121 Specifically, these changes would incorporate the proposed changes to certain defined 

terms and revise existing disclosures to clarify the entities that should be associated with certain 

disclosures (e.g., because the insurance company would be obligated to pay all amounts 

promised to investors under the contracts subject to its financial strength and claims-paying 

ability, we would require disclosure about this topic to be framed in terms of the insurance 

company, not the registered separate account, as the requirement is currently worded).122 

We are proposing to require one new disclosure item for contracts that offer variable 

options, which would be similar to a proposed disclosure for index-linked options, discussed 

 

121  See proposed Item 6(a) through (c) of Form N-4. 
122  We also propose to add an instruction requiring the insurance company to indicate whether it is relying 

upon the exemption provided by 17 CFR 240.12h-7 (“rule 12h-7”), consistent with the requirements of that 
rule. See proposed Instruction to Item 6(a) of Form N-4; see also rule 12h-7(f) (requiring issuers of 
securities subject to insurance regulation that rely on the exemption from the duty to file section 13(a) 
reports with respect to securities registered under the Securities Act to provide a statement indicating that 
fact in the relevant prospectus). 



75 

below. Specifically, the prospectus for such contracts would be required to include a statement 

indicating that “contract value allocated to a Variable Option will vary based on the investment 

experience of the corresponding Portfolio Company in which the Variable Option invests,” and 

“there is a risk of loss of the entire amount invested.”123 The risk of loss inherent in a variable 

annuity is currently disclosed in the form’s “Key Information Table,” and we are proposing to 

mandate this disclosure in Item 6 as well to warn that an investor can lose the entire amount 

invested in a variable option. In addition to informing investors about investment risks in a 

variable option generally, where an annuity contract offers both variable and index-linked 

options, this disclosure also would help to explain the different nature of the investment risks 

posed by each kind of investment option. In that case the prospectus would disclose the 

maximum loss associated with the index-linked options while also disclosing that, for the 

variable options, the investor could lose the entire amount invested.  

Description of Index-Linked Options 

We are proposing to require the insurance company to disclose information about the key 

features of the index-linked options currently offered under the contract.124 These proposed 

disclosures are designed to complement other proposed disclosures in the prospectus about 

index-linked options generally by providing investors specific information about each index-

linked option’s features and risks, akin to the information that is currently available to investors 

about variable options in the prospectuses for the mutual funds underlying those options. 

Specifically, the insurance company would be required to describe the index-linked options 

currently offered under the contract as well as information about how interest is calculated and 

 

123  See proposed Item 6(c)(1) of Form N-4. 
124  See proposed Item 6(d) of Form N-4. 



76 

credited for each index-linked option, specifically: (1) limits on index losses; (2) limits on index 

gains; (3) crediting period; (4) crediting methodology and examples; (5) relevant indexes; (6) 

maturity; and (7) other material features of the index-linked option. These disclosures are 

intended in part to address points that investors found to be confusing in investor testing.125 

Further, some investors in the qualitative interviews indicated that they would prefer more 

information about these points relative to the KIT disclosures.126 

Description of the Index-Linked Options Currently Offered 

Under the proposed amendments, RILA issuers would be required to describe the index-

linked options currently offered under the contract, including statements indicating that the 

insurance company will credit positive or negative interest at the end of a crediting period to 

amounts allocated to an index-linked option based, in part, on the performance of the index.127 

To dispel potential investor confusion relating to the reference to an index, we are proposing to 

require RILA issuers to state that an investment in an index-linked option is not an investment in 

the index or in any index fund. 

Other cautionary statements regarding the index-linked options offered would include 

that the potential for investment loss could be significantly greater than the potential for 

investment gain, and that an investor could lose a significant amount of money if the index 

declines in value. To illustrate the potential scope of such a loss, RILA issuers would have to 

prominently state (as a percentage) the maximum amount of loss an investor could experience 

from negative index performance over a crediting period, after taking into account the minimum 

 

125  See OIAD Study at Section 7, Conclusions, Summary of Findings and Discussion. 
126  See OIAD Study at Section 5, Qualitative Testing, Summary of Qualitative Testing. 
127  See proposed Item 6(d)(1) of Form N-4. 



77 

guaranteed limit on index loss provided under the contract. Because index-linked options are 

often marketed as a way to limit investment losses, this disclosure is designed to convey to 

investors that they could still lose a significant amount on an index-linked option, despite having 

a floor or buffer. 

To emphasize the substantial risks associated with an early withdrawal from an index-

linked option, RILA issuers would be required to state that an investor could lose a significant 

amount of money due to the contract adjustment if amounts are removed from an index-linked 

option prior to the end of its crediting period. To further underscore the risk, RILA issuers would 

also prominently state (as a percentage) the maximum amount of loss an investor could 

experience from a negative contract adjustment, and that this loss could be greater due to 

surrender charges and tax consequences.  

To inform investors of the possibility that their investment options could be unilaterally 

changed without action on their part, the insurance company would be required to state, if 

applicable, that it can add or remove index-linked options and change the features of an index-

linked options from one crediting period to the next, including the index and current limits on 

gains and limits on index losses, subject to contractual minimum guarantees. 

Similar to the current requirement for prospectuses for contracts that offer variable 

options, the insurance company would be required to state that certain information regarding the 

features of each currently offered index-linked option is available in an appendix to the 

prospectus,128 and to provide a cross-reference to that appendix. An instruction would permit this 

statement to be modified if needed to conform to the corresponding table in the appendix.129 As 

 

128  See proposed Item 17 of Form N-4. 
129  See infra footnote 164 and accompanying text. 



78 

described further below, the appendix would also be amended to include a table listing the index-

linked options currently available under the contract.130 

How Interest is Calculated and Credited 

To aid investors in making informed investment decisions, we propose to require RILA 

issuers to describe how interest is calculated and credited for each index-linked option.131 As part 

of this description, the insurance company would be required to disclose any limits on index 

losses and/or index gains, the crediting periods available under the contract (e.g., 1, 3, and 6 

years), a description of an index-linked option’s index crediting methodology, information about 

each index, what happens when an index-linked option matures, and any other material features 

associated with index-linked options. We discuss each of these requirements in turn.  

How Interest is Calculated and Credited – Limits on Index Losses and Gains 

We are proposing to require the insurance company to describe, as a primary element of a 

RILA contract, the limits on index losses and gains for each index-linked option.132 In each case, 

and as applicable, the insurance company would be required to state that such limits apply and 

describe how index losses and gains would be limited (for example, through the use of a floor or 

buffer to limit losses, or a cap or participation rate to limit gains). We also are proposing to 

require the insurance company to provide examples to help investors understand how these limits 

work in practice. To illustrate the limits on index losses, the prospectus would include an 

example showing how the limit on index losses could operate to limit a negative return (e.g., if 

the index return is -25% and the buffer is -10%, the insurance company will credit -15% (the 

 

130  See infra at section II.B.3(b) (describing proposed amendments to Item 17 (Portfolio Companies Available 
Under the Contract) to include parallel provisions for RILAs). 

131  See proposed Item 6(d)(2) of Form N-4. 
132  See proposed Item 6(d)(2)(i) and (ii) of Form N-4. 



79 

amount that exceeds the buffer) at the end of the term, meaning the investor’s contract value will 

decrease by 15%). The prospectus similarly would include an example of how the limit on gains 

could operate to limit a positive return (e.g., if the index return is 12% and the cap rate is 4%, the 

insurance company will credit 4% in interest at the end of the term, meaning the investor’s 

contract value will increase by 4%). 

We also propose to require the insurance company to disclose, for each index-linked 

option, current limits on index losses and gains, as well as the minimum limits on losses and 

gains that are guaranteed for the life of the contract.133 The guaranteed minimum limits tend to 

be lower than those currently provided for in the contract but will not change for the life of the 

contract, whereas the actual limits for an index-linked option will vary from crediting period to 

crediting period. However, at no point will these limits be lower than the guaranteed minimums. 

Both pieces of information are important to understanding the potential returns of an index-

linked option because one of the central economic tradeoffs a RILA presents is an investor’s 

consideration of whether to sacrifice potential gains in exchange for protection against potential 

losses. An investor therefore will not only need to consider the guaranteed limits, but also 

understand that the actual limits can vary over the life of the contract.134 We also propose to 

require the insurance company to state that current limits on gains and limits on index losses will 

not change during the index-linked option’s crediting period. This would help investors 

 

133  Proposed Items 6(d)(2)(i)(B) and 6(d)(2)(ii)(B) of Form N-4. 
134  This information about minimum guaranteed index gain limits is also set forth in the appendix, which is 

part of the summary prospectus. See proposed Instruction 7 to Item 17(b); proposed rule 498A(b)(5)(ix). 
We are also proposing to require RILAs to publish online limits on gains. See infra section II.B.3.c. 
Although changes to an index-linked option, including current limits on gains, are material, we recognize 
that these limits in particular can change from time to time. Therefore, insurance companies may update 
current limits on gains using a prospectus supplement filed pursuant to rule 497 under the Securities Act. 
See infra section II.E.2. 



80 

understand that although the current limits on gains and limits on losses—unlike the minimum 

guaranteed limits—can change from crediting period to crediting period, they will not change 

during any given crediting period.  

Because an insurer can generally set rates at its discretion and may take into account a 

number of factors in setting those rates, we are proposing that the insurance company explain 

how it selects rates for limiting index losses and gains to help investors understand how the 

features of a particular index-linked option will impact that option’s risk/return profile. In 

particular, we are proposing to require the insurance company to describe the factors it considers 

in determining the current limits on losses and gains for an index-linked option (e.g., long-term 

interest rates, market volatility, the cost of option contracts supporting the index-linked option 

guarantees, etc.),135 and how that choice may impact other features of the option set by the 

insurance company.  

Giving investors information about the factors the insurer considers in determining 

current limits—which are key features of an index-linked option—may help manage their 

expectations regarding how the product operates. If an investor sees that last year’s cap on an 

index-linked option was 22% and this year the cap is 17%, the proposed disclosure may help 

them understand why the insurer’s rates have changed.136 If an insurer discloses that it takes 

various specified factors into consideration, but ultimately sets rates at its own discretion, the 

investor should know that as well.  

 

135  Similar disclosure has been required in other contexts. See, e.g., Item 9(a) of Form N-4 (requiring 
disclosure of material factors that determine the level of annuity benefits); see also Instruction 2 to Item 
7(a) of Form N-6 (requiring the identification of factors that determine the applicable cost of insurance 
rate). 

136  For example, an insurer might disclose that caps and participation rates may vary depending on factors such 
as market volatility, hedging strategies and investment performance, the investor’s index effective date, or 
interest rates, among others.81 

The proposed disclosure about how the current limits on index gains or losses may 

impact other aspects of the index-linked option is designed to explain the inverse relationship 

between various features of the index-linked option. For example, the insurance company could 

include an explanation regarding how the limit on index losses for an index-linked option could 

impact the current limit on index gains. This could help an investor understand, for example, that 

if the insurance company determines to increase the extent to which the index-linked option will 

protect against loss, the insurance company may then reduce the amount of upside index 

participation the investor could receive. The prospectus would also require an explanation of the 

factors an investor should consider regarding limits on index losses or gains before selecting an 

index-linked option for investment. This disclosure should assist an investor in choosing among 

the index-linked options available under the contract, such as by explaining the difference 

between a floor and a buffer, or by highlighting index-linked options with features that assume 

more risk in return for higher potential return, or vice versa. 

How Interest is Calculated and Credited – Crediting Period 

We are proposing to require the insurance company to generally describe the crediting 

periods of the index-linked options available under the contract (e.g., 1, 3, and 6 years), along 

with the factors an investor should consider regarding different crediting period lengths before 

selecting an index-linked option.137 An example of one such factor an insurance company could 

include as part of this disclosure would be that crediting periods introduce timing risk that forces 

investors to take losses at the end of a crediting period, and shorter crediting periods might 

 

137  See proposed Item 6(d)(2)(iii) of Form N-4. 



82 

increase this risk.138 The insurance company also would be required to prominently state that 

amounts must remain in an index-linked option until the end of its crediting period to be credited 

with all or partial interest, as applicable, and to avoid a possible contract adjustment in addition 

to potential surrender charges and tax consequences. This discussion would also include a 

description of the transactions subject to a contract adjustment (e.g., living benefits), with 

appropriate cross-references to related disclosures in the prospectus. These disclosures 

collectively are designed to help an investor make an informed investment decision when 

selecting an index-linked option, taking into account that withdrawing money before the end of 

the applicable crediting period can have adverse consequences.  

How Interest is Calculated and Credited – Methodology and Examples 

Each index-linked option has an “index crediting methodology” that explains how 

interest is calculated and credited to the contract. For example, one index crediting methodology 

is “point-to-point,” that is, the amount credited to the contract is based upon a comparison of the 

index’s performance at two points in time (such as at the beginning and end of the crediting 

period). We- propose to require insurance companies to explain the index crediting 

methodologies used in the index-linked options available under the RILA contract, along with 

numerical examples about how these methodologies work. We further propose to require 

insurance companies to provide a bar chart that illustrates the annual total return of each index 

 

138  See OIAD Report at Section 2, RILAs: Structure of Contracts and Investment Options, Investment Terms 
(“The role of [crediting periods] also creates a situation that may be unique for RILA purchasers relative to 
other investments they hold. In particular, RILA investors periodically realize gains or losses at the end of 
each [crediting period]. In contrast, a mutual fund investor (for example) could wait to sell the fund during 
down markets, avoiding realizing those losses. Thus, the [crediting period] feature adds a ’timing risk‘ for 
RILA investors relative to certain other investments.”). 



83 

along with hypothetical examples of index return after applying standardized limitations on 

index gains and losses. 

Specifically, insurance companies would be required to describe, for each index crediting 

methodology,139 how interest is calculated and credited at the end of a crediting period based on 

the interest crediting formula or performance measure.140 Form N-4, as we propose to amend it, 

would provide examples of common crediting methods that the insurance company would 

describe if applicable, such as point-to-point, step-up calculations, and enhanced performance.141 

To help investors understand how these crediting methods work, we also are proposing to require 

the insurance company to include a numeric example to illustrate the mechanics of each index 

crediting methodology.142 The examples would be required to show, in a clear, concise, and 

understandable manner, how each crediting method functions when the index has positive 

returns as well as negative returns to help investors understand how the crediting method 

functions in both circumstances. 

Specifically, we would require numeric examples that reflect a positive return above the 

limit on index gains, and a negative return below the limit on index losses for each methodology. 

The examples also would be required to assume hypothetical returns and limits that are 

 

139  We understand that many index-linked options use the same crediting methodology. If all index-linked 
options offered by a RILA contract use the same crediting methodology, the prospectus would only include 
one example of that crediting methodology. If, however, the index-linked options in a RILA contract offer 
more than one crediting method, or if different index-linked options in a RILA contract offer different 
crediting methods, this would affect the number of examples to be provided. The number of examples to be 
provided depends on the number of crediting methodologies, not the number of index-linked options. 

140  See proposed Item 6(d)(2)(iv)(A) of Form N-4. 
141  As noted above, a point-to-point crediting methodology compares the index’s performance at two points in 

time (such as at the beginning and end of the crediting period). Step-up calculations guarantee a given rate 
if the index’s returns are positive, regardless of the index’s actual performance, subject to certain 
conditions. “Enhanced performance” increases a positive index return, such as by offering a participation 
rate of more than 100%. 

142  See proposed Item 6(d)(2)(iv)(C) of Form N-4. 



84 

reasonable based on current and anticipated market conditions and sales of the contract, and to 

reflect any charges subtracted from interest credited to or deducted from contract value in the 

index-linked option to allow investors to understand the impact of these charges on their return. 

Additional examples, charts, graphs, or other presentations would be permitted if they are clear, 

concise, understandable. Any additional presentations that assume hypothetical returns and limits 

also should assume hypothetical returns and limits that are reasonable based on current and 

anticipated market conditions and sales of the contract. We would also require insurance 

companies to include a legend, in the format specified in the form, that (1) these examples 

illustrate how the insurance company calculates and credits interest under each index crediting 

methodology assuming hypothetical index returns and hypothetical limits on index gains and 

losses and (2) the examples assume no withdrawals. 

We also are proposing to require a bar chart for each index available under the currently-

offered index-linked options showing the index’s annual return for the last 10 calendar years (or 

for the life of the index, if less than 10 years), with the corresponding numerical performance 

adjacent to each bar.143 Further, insurance companies would be required to provide a 

hypothetical example alongside each index return that reflects the return after applying a 5% cap 

and a -10% buffer. If there are no caps or buffers offered under the contract (if, for example, the 

contract includes a floor rather than a buffer), insurance companies would be permitted to reflect 

a rate or measure used to limit index gains or losses under the contract that is comparable. 

Insurance companies would not be permitted to include additional performance presentations, or 

historical index performance that precedes the inception of the index. Further, insurance 

 

143  See proposed Item 6(d)(2)(iv)(B) of Form N-4. 



85 

companies would be required to provide two footnotes to this table, if applicable, that disclose 

(1) that the index return does not reflect dividends paid on the assets in the index, and (2) that the 

index provider deducts fees and costs when calculating index return. 

These bar charts would also be accompanied by the following legend in the format 

specified in the form: 

The bar chart shown below provides the Index’s annual returns for the last 10 
calendar years (or for the life of the Index if less than 10 years), as well as the 
Index returns after applying a hypothetical 5% cap and a hypothetical -10% 
buffer. The chart illustrates the variability of the returns from year to year and 
shows how hypothetical limits on Index gains and losses may affect these 
returns. Past performance is not necessarily an indication of future 
performance. 
 
The performance below is NOT the performance of any Index-Linked Option. 
Your performance under the Contract will differ, perhaps significantly. The 
performance below may reflect a different return calculation, time period, and 
limit on Index gains and losses than the Index-Linked Options, and does not 
reflect Contract fees and charges, including surrender charges and the Contract 
Adjustment, which reduce performance. 

This information is intended to provide context for the index-linked options that the 

RILA contract offers and would better inform an investor when deciding whether to invest in a 

RILA. For example, if an index-linked option provides that the investor will experience at least 

5% of the upside performance of an index, investors may view the tradeoffs of this investment 

differently if the index historically has returned, for example, 10% per year (thus capping gains 

at 5% during those past periods) or 1% per year. Similarly, if an index-linked option offers a -

10% buffer, the investor could compare that against the index performance in the bar chart and 

assess the extent to which the buffer would have provided downside protection against market 

losses in negative return years.  



86 

We appreciate, however, that historical index presentation alone, without the addition of 

hypothetical caps and buffers, may mislead investors into thinking that these historical rates of 

index performance are what investors would have received under the contract if they invested in 

a particular index-linked option. As we discuss in more detail below, we are concerned that 

presenting historical RILA performance without additional context can be potentially misleading 

given that investors cannot access the same RILA terms as were available historically. Relatedly, 

we are concerned that statements in RILA advertisements are being made without sufficient 

context so that investors can understand the qualifications to those statements.144 As an example 

of how historical index performance could confuse investors, consider an investor who has 

selected an index-linked option with performance based on the performance of XYZ Index and a 

one-year crediting period, and this investor has allocated contract value to that index-linked 

option over 10 consecutive crediting periods. This investor’s RILA contract value after 10 years 

likely will differ from the XYZ Index’s 10-year performance. Reasons for this likely difference 

include, for example, that the index-linked option only provides a portion of the performance of 

the index because of a cap rate, buffer, or floor. 

Accordingly, we are proposing to require insurance companies to provide historical index 

information to investors, but with important qualifications so that investors will not confuse this 

index information for the historical performance of the RILA itself. In particular, the overlay of 

hypothetical caps and buffers is designed to help investors understand better how those limits can 

cause RILA performance to differ from that of the index. Further, the legends we are proposing 

 

144  See also infra section II.F. 



87 

also are designed to put investors on notice that the presented performance is not the RILA’s 

performance. 

The proposed bar chart, including the proposed 10-calendar-year period, is modeled on 

the risk/return bar chart in Item 4(b)(2) of Form N-1A. Form N-4 also currently requires variable 

annuity issuers to show 10-years of performance in the portfolio company appendix. We 

preliminarily believe that 10 calendar years is an appropriate time to illustrate the performance of 

the index over the long term to help guide investors. We are proposing to require a 5% cap rate 

and -10% buffer rate to help investors understand how caps and buffers affect the index return, 

but without using values that are so high or so low that they will bear no resemblance to the level 

of gains and losses that is being offered. The illustrative rates are designed to achieve this effect 

because they are higher than typical guaranteed levels of caps and floors, but lower than typical 

currently offered levels. 

How Interest is Calculated and Credited – Indexes 

The index underlying an index-linked option is a central feature of the investment, as the 

investor’s return will be based on the index’s performance, subject to applicable limits on gains 

and losses. We therefore are proposing to require the insurance company to provide for each 

index a brief description of the types of investments that compose the index and where the 

investor can find more information about the index.145 Where there is more than one version of 

an index (for example a total return version and a price return version), the disclosure would 

clearly state which version of the index relates to the index-linked option. If the index is an 

exchange-traded fund (“ETF”), the disclosure would have to clarify whether the index’s 

 

145  See proposed Item 6(d)(2)(v)(A) of Form N-4. 



88 

performance for purposes of determining the amounts credited in the index-linked option is 

based on the ETF’s net asset or closing value and, if the performance is based on the ETF’s share 

price, the impact of using the share price as opposed to total return. These disclosures 

collectively are designed to help ensure that investors understand the applicable indexes. The 

disclosure would also state, if applicable, that the index does not reflect dividends paid on its 

underlying securities, or that the index deducts fees and costs when calculating index 

performance, which will reduce index performance. This is important disclosure because an 

index that does not reflect dividends paid on underlying securities, or that deducts fees and costs, 

will have a lower return, all else equal, than an index that includes dividends and does not deduct 

fees and costs. 

We also propose to require the insurance company to state that it reserves the right to 

substitute an index prior to the end of the crediting period.146 This would put investors on notice 

that the index associated with a particular index-linked option—which is a key driver of the 

investor’s return—could change in the middle of a crediting period. The insurance company also 

would be required to disclose all circumstances that could necessitate a substitution, how the 

insurance company would choose a replacement index, when and how investors would be 

notified of this change, how index return will be calculated at the end of the crediting period, and 

what would happen if a suitable replacement index were not found, including whether the index-

linked option will be discontinued prior to the end of the crediting period. This information 

would allow an investor to better understand the likelihood of the insurance company making a 

substitution and its potential effects.  

 

146  See proposed Item 6(d)(2)(v)(B) of Form N-4. Insurers generally reserve the right to change the index in 
the middle of the crediting period if the index is discontinued or there is a substantial change in the 
calculation of the index. Based on staff experience, such changes are exceedingly rare. 



89 

How Interest is Calculated and Credited – Maturity and Other Material Features 

To help investors anticipate what may happen at the end of an index-linked option’s 

crediting period, the insurance company also would be required to state whether an investor 

would receive advanced notice of a maturing index-linked option, how an investor might provide 

instructions regarding the reallocation of the contract value rate at the end of the crediting period, 

and any automatic default allocation in the absence of such instructions.147 In describing these 

matters, the prospectus must also explain how investors will be informed of the index-linked 

option available for allocation at the end of a crediting period, including any changes to the 

currently-offered index-linked options and the discontinuance or addition of index-linked 

options. 

Finally, we propose to require the insurance company to describe any other material 

aspects of the index-linked option to ensure that any other item not discussed above that could 

affect an investment decision is disclosed.148 This would include disclosure related to limitations 

on transfers to or from index-linked options, rate holds, “bail-out” provisions, start dates, and 

holding accounts.149 We would also require a brief description of how charges may impact the 

index-linked option’s value if applicable as part of this discussion. 

 

147  See proposed Item 6(d)(2)(vi) of Form N-4. 
148  See proposed Item 6(d)(2)(vii) of Form N-4. 
149  A “rate hold” locks in interest at the current cap (or other rate limiting index gains) for the period between 

which the insurance company receives the investor’s annuity application and the time the investor’s 
premium payment is allocated to the index-linked option. A bail-out provision is a contract provision that 
provides if a current cap (or other rate limiting index gains) is set below a specified value, the investor may 
withdraw value from that index-linked option or RILA without a contract adjustment (and in some cases 
without a surrender charge) during a specified period after the start of the crediting period. A holding 
account is typically a conservative investment option (typically a money market fund or a fixed option) 
where amounts allocated to the index-linked option are held until the next index-linked option start date. 
This is used for index-linked options that start on a particular day each month (e.g., the 15th of the month). 



90 

Fixed Options 

In addition to variable options and index-linked options, annuity contracts commonly 

include fixed investment options, such as traditional, unregistered fixed options and unregistered 

index options.150 In the variable annuity context, a fixed option provides an alternative for 

investors who wish to avoid the market risk of investing in a variable option. A fixed option can 

also serve as the holding account for amounts that are pending allocation to a particular 

investment option. In addition, a fixed option may be the default allocation vehicle at the end of 

an index-linked option’s crediting period.  

Form N-4 generally requires registrants to describe the fundamental features and risks of 

an annuity contract, including those, like fixed options, that are distinct from the variable options 

offered through the registered separate account.151 The form also currently requires specific 

disclosure about fixed options in the KIT and the Contract Overview.152 Because we are 

proposing to include disclosures relating to index-linked options in Item 6, we are also proposing 

to require disclosures on this other type of investment option available to annuity contract 

investors so that they have a complete understanding of what they may invest in through that 

contract, either actively, or by default. This approach is designed to increase investor 

 

150  See proposed Item 6(e) of Form N-4. Interests in fixed account options are exempt securities under Section 
3(a)(8) of the Securities Act. 

151  General Instruction C.1.(a) of Form N-4 (stating that “[a] Registrant’s prospectus should clearly disclose 
the fundamental features and risks of the [Contracts], using concise, straightforward, and easy to 
understand language.”). 

152  Items 2 and 3 of Form N-4. 



91 

comprehension by ensuring that substantive information about all of the available investment 

options is presented in the same location in the prospectus. 

The proposed disclosures for fixed options would be similar to those provided for index-

linked options, tailored for the specifics of a fixed option. Specifically, registrants would be 

required to describe the fixed options currently offered under the contract and state that 

information regarding the features of each currently-offered fixed option, including its name, 

term, and minimum guaranteed interest rate is available in an appendix with cross-references.153 

Further, registrants would be required to describe how interest is calculated and when it is 

credited for each fixed option as well as the length of the term and minimum guaranteed interest 

rate (stated as a numeric rate, rather than referring to any minimums permitted under State law). 

As with index-linked options, the registrant also would be required to state whether an investor 

would receive advance notice of a maturing fixed option, including what steps an investor might 

take to provide instructions regarding the reallocation of contract value at the end of the term, 

and any automatic default allocation in the absence of such instructions. In describing these 

matters, the registrant must also explain how investors will be informed of the fixed options 

available for allocation at the end of a term, including any changes to the currently offered fixed 

options and the discontinuance or addition of fixed options. Also as with index-linked options, 

we would require disclosure of any other material aspect of the fixed options, including 

limitations on transfers to or from the fixed options, rate holds, start dates and holding accounts. 

Request for Comment 

 

153  As discussed below, we are also proposing to require disclosure relating to any fixed options currently 
offered under the contract in the Item 17 appendix. 



92 

We request comment generally on the proposed amendments to Item 6 of Form N-4, and 

specifically on the following issues: 

42. Should we require each of the specific disclosures (e.g., disclosures relating to 

limits on index losses and gains, crediting period, etc.) relating to the RILAs and 

index-linked options as proposed? Would all of these proposed amendments 

provide information that would be important to investors? Should we modify or 

expand any of these proposed disclosure requirements? 

43. Should we make any other changes to the required prospectus disclosures 

addressing index-linked options? For example, we are proposing to require 

numeric examples, charts, graphs, or other presentations, as appropriate, to 

illustrate the mechanics of each type of index crediting methodology.154 Would the 

proposed requirement be likely to provide useful information for investors? If not, 

why not? Would the inclusion of such examples, charts, and graphs be likely to 

confuse investors about how index-linked options work? Is there a concern that 

insurance companies would utilize these examples to over-emphasize the benefits 

of RILAs relative to their risks? If so, how could this be remedied? Should such 

examples be included in the prospectus in response to Item 6, or would they be 

better located elsewhere in the prospectus, for example, in Items 3 or 17? Given 

the potential length of such examples, should they be included in an appendix to 

the prospectus?  

 

154  Proposed Item 6(d)(2)(iv) of Form N-4. 



93 

44. Should the current limits on gains and losses be required in the statutory 

prospectus, as proposed? If not, where should such disclosure be located? Should 

insurance companies update current limits on gains as they change from time to 

time by filing a rule 497 prospectus supplement, or should a rule 485 post-effective 

amendment be required?  

45. Should we require the proposed disclosures relating to the risks of investing in 

variable options?  

46. Should we require that the historical performance of indexes be disclosed as 

proposed? Is the proposed bar chart an effective or appropriate presentation 

approach, or should we instead require another presentation approach, such as a 

line graph or the 1-, 5-, and 10 year table required in the Form N-1A? If so, why? 

Are there any concerns that investors would confuse the inclusion of historical 

index information with the performance of the index-linked option itself? If so, are 

our proposed requirements to provide a hypothetical example of a 5% cap and -

10% buffer and a legend sufficient to make clear that the performance illustrated 

by the bar chart does not show or suggest how an investment in the contract will 

perform for the investor? Are the 5% cap and -10% buffer appropriate limits to use 

in the hypothetical examples? Instead of prescribing a specific cap and buffer, 

should we require or permit issuers to include the current and/or guaranteed limits 

as an overlay to the bar chart, or would this provide too much visual clutter for 

investors, or be misleading in any way? Is 10 calendar years of index performance 

the right amount of time to present? 



94 

47. Should we require discussion of fixed investment options currently offered under 

the contract? Are the proposed disclosure items appropriate for these types of 

investment options?  

48. Is there other information we should require insurance companies to disclose to 

help investors better understand the economic tradeoffs associated with an index-

linked option? For example, issuers of structured notes that offer bounded returns 

similar to RILAs disclose the issuer’s valuation of the note, based on the value of 

(1) the embedded derivatives; and (2) a fixed-income bond. This disclosure allows 

investors to understand the difference between the issuer’s valuation and the 

original issue price that they are paying for the structured note. Would a similar 

disclosure for RILAs, provided with respect to each permutation of an index-

linked option, be helpful to investors? Would the difference between a 

hypothetical $100,000 investment in an index-linked option and the value, or the 

cost to assemble, the economic components underlying the index-linked option be 

informative to investors? Would it appropriately reflect the implied cost the 

investor is paying when investing in that index-linked option? If we were to 

require this disclosure, should it be expressed in dollars, as a percentage of a 

hypothetical $100,000 investment, or both? Should we require the insurance 

company to annualize the costs over a stated period of time to express the cost as 

more akin to an annual expense? Recognizing that RILAs are intended to be long-

term investments, what would be an appropriate period of time (e.g., 10, 20, or 30 

years)?  



95 

49. If we were to require insurance companies to provide the disclosure described in 

request for comment 48, should we require the insurance company to compare a 

hypothetical $100,000 investment in the index-linked option to the value, or cost, 

of the following components: derivatives that would provide the index-linked 

option’s investment exposure; a fixed-income component; and the standard 

insurance features offered with the index-linked option?  

50. If we were to require insurance companies to provide the disclosure described in 

request for comment 48, should we require that the insurance company value or 

price the derivatives using exchange-listed derivatives, such as exchange-traded 

options, and based on prices on the exchange, except in cases where exchange-

listed derivatives could not efficiently provide the index-linked option’s 

investment exposure? Would that approach provide for consistent and reliable 

pricing? In practice are insurance companies typically constructing and hedging 

index-linked options’ investment exposure using exchange-listed options or other 

derivatives where feasible?  

51. If we were to require insurance companies to provide the disclosure described in 

request for comment 48, in determining the value of the derivatives underlying an 

index-linked option, should we require insurance companies to use a collection of 

hypothetical index options with an expiration equal to the crediting period, 

consistent with our analysis in section III.B.3?155  

52. If we were to require insurance companies to provide the disclosure described in 

request for comment 48, what calculation would be appropriate for the fixed-

 

155  See infra footnote 429 and accompanying text. 



96 

income component of an index-linked option? Should we, for example, provide 

that the insurance company should use the $100,000 hypothetical investment 

discounted by the rate of interest the insurance company is crediting, or would 

credit, on fixed annuities with a term equal to the duration of the crediting periods 

of the index-linked option? Conversely, should we require the insurance company 

to use the value of a risk-free zero-coupon bond with a time to maturity equal to 

the crediting period of the index-linked option, consistent with our analysis in 

section III.B.3?  

53. If we were to require insurance companies to provide the disclosure described in 

request for comment 48, how should the insurance company value, or determine 

the cost of purchasing separately, the standard insurance features? Do insurance 

companies maintain internal pricing information that could be used for this 

purpose where those features are not offered separately rather than in connection 

with annuities or other financial products sold by the insurance company? Should 

the cost or value of insurance be based on amounts insurance companies are 

required to reserve in connection with those insurance obligations? Should we 

require additional disclosure related to early withdrawal charges, fees, or penalties? 

For example, should we require more prominent placement of these features on 

marketing or other materials, or should we require a comparison of these features 

to potential benefits of the RILA to clarify for investors possible trade-offs? 

54. If we were to require insurance companies to provide the disclosure described in 

request for comment 48, should we, in addition to requiring the disclosure of this 



97 

cost figure, also require the insurance company separately to disclose the costs or 

values associated with each component underlying the index-linked option?  

55. If we were to require insurance companies to provide the disclosure described in 

request for comment 48, where should insurance companies place it in the 

registration statement? Would this information be most helpful to investors if it 

were included in the disclosure required by Item 6, which provides more detailed 

information on each index-linked option, or in the summary prospectus appendix 

identifying the RILA’s investment options? Alternatively, should it be disclosed 

the KIT as a range based on the available index-linked options? If this information 

were in the summary prospectus, would it change frequently and result in a high 

number of prospectus supplements delivered to investors? If we were to further 

require the disclosure of the underlying components and pricing assumptions used 

to determine the cost to investors disclosure, would the SAI be an appropriate 

place for that disclosure? Should these disclosures be structured using inline 

XBRL as proposed for other additional disclosures? 

c) Appendix: Investment Options Available Under the Contract 

(Item 17) 

We propose to amend Item 17 to include a discussion of the index-linked options and 

fixed options available under the contract. This item currently requires a variable annuity issuer 

to include in an appendix to the prospectus a table that consolidates certain summary information 

about each portfolio company offered under the contract. The current appendix is designed to 

provide investors with an overview of variable options available under the contract in a uniform, 

tabular presentation that promotes comparison, because the investment experience of an investor 



98 

in a variable annuity will largely depend on the underlying investments available under the 

contract.156 Similarly, we anticipate that an overview of the index-linked options available to 

investors in a RILA, as well as any fixed option currently available under the contract, would 

help investors understand and compare the various investment options offered under the contract. 

Consolidating this summary information about the contract’s investment options—equivalent to 

what is currently provided for variable options—into a concise, easy to read tabular presentation 

should enhance the ability of investors to understand, evaluate, and compare all the investment 

options available under the contract. 

To reflect the expanded scope of the appendix, we would amend the current heading to 

“Investment Options Available Under the Contract.”157 We would provide a new instruction that 

explains that issuers may modify this new heading as appropriate under the contract. For 

example, if there are only variable options offered under the contract, an issuer could change the 

heading to “Portfolio Companies Available Under the Contract,” consistent with the current 

requirements of the form. Because variable options, fixed options, and index-linked options can 

vary by benefit offered under the contract, we also propose to move the restrictions table 

currently required for variable annuities by instruction 1(f) of Item 17 to be a separate 

requirement for all investment options, with no other changes.158 

Index-Linked Options 

 

156  VASP Adopting Release at n.267 and accompanying text. 
157  “Investment options” are defined as any variable option, index-linked option, or fixed option available 

under the contract. See infra section II.B.7(b). 
158  Proposed Item 17(d) of Form N-4. 



99 

To accommodate the inclusion of index-linked options in the appendix, we propose to 

add a new table titled “Index-Linked Options.”159 As part of our approach to layered disclosure, 

the information to be supplied in the table for index-linked options would summarize certain 

prospectus disclosures required elsewhere in the prospectus.160  

Legends 

Similar to the requirements for variable annuities, the table for index-linked options 

would be prefaced with a legend. Specifically, the legend would state that the table lists index-

linked options currently available under the contract. Further, because insurance companies 

typically change the index-linked options available over time, we would require the legend to 

specify that the insurance company may change the features of the index-linked options in the 

table (including the index and the current limits on gains and limits on losses), offer new index-

linked options, or terminate existing index-linked options, and that the insurance company will 

provide the investor with written notice before making any of these changes. 

As discussed above, current limits on index gains for index-linked options would be 

disclosed in the prospectus in response to Item 6, and changes to current limits on index gains 

would be disclosed in prospectus supplements.161 However, to avoid frequent updates to the 

summary prospectus, insurance companies would not be required to include current limits on 

index gains for index-linked options in the appendix as those limits can change frequently.162 

Instead, and in addition to the disclosure in Item 6, to ensure that investors have convenient 

 

159  See proposed Item 17(b) of Form N-4. 
160  See, e.g., proposed Item 6(d) of Form N-4. 
161  See proposed Item 6(d)(2)(i)(B) of Form N-4 and supra footnote 134. 
162  As discussed below, the proposed appendix would appear in the summary prospectus, but Item 6 would 

not. See infra section II.C; see also infra section II.E.1 (discussing proposal to amend rules 485 and 497 for 
RILAs). 



100 

access to changes in current limits on index gains, which can significantly affect an investor’s 

returns on an index-linked option, the proposed legend would require insurance companies to 

state that current limits on gains are available at a website address.163 This website address must 

be specific enough to lead investors directly to current rates, rather than to the home page or 

other section of the website on which the rates are posted. Requiring RILA issuers separately to 

include information about current limits on gains on their websites would benefit investors by 

making this information easier to find and understand. Furthermore, because websites may be 

updated quickly, website disclosure would be efficient for compiling index-linked options’ 

current limits on gains, given our understanding that these rates can change often and that 

insurance companies currently disclose current rates on their websites. 

Lastly, set off from the rest of the legend and with emphasis, we would require a notation 

that if amounts are withdrawn from an index-linked option before the end of its crediting period, 

the insurance company may apply a contract adjustment and that this may result in a significant 

reduction in the investor’s contract value that could exceed any protection from the index’s loss 

that would be in place if an investor held the option until the end of the term. We are proposing 

this notation given the potential impact on an investor’s returns if amounts are withdrawn prior 

to the end of a crediting period. 

We propose to require the legend to include appropriate cross-references to the section(s) 

of the prospectus that describe the features of the index-linked options as well as the contract 

 

163  Consistent with the current instructions to the form, any website address, including this one, that is included 
in an electronic version of the statutory prospectus would be required to include an active hyperlink or 
other means of facilitating access that leads directly to the relevant website address. However, this 
requirement would not apply to an electronic summary prospectus that is filed on EDGAR. See proposed 
General Instruction C.3.i of Form N-4.101 

adjustment. This approach is designed to help investors that are interested in more detail about 

key aspects of the index-linked options to locate that information quickly. 

Table 

The legend would be followed by a table that lists and highlights key elements of each 

index-linked option available under the contract. Specifically, the table would require, in 

sequential columns, the identification of (1) each index by name; (2) type of index; (3) crediting 

period, indicating the duration of the index-linked option in years; (4) index crediting 

methodology; (5) limits on index loss if held to the end of the crediting period; and (6) 

guaranteed minimum limit on index gain.  

The description of the type of index would be a brief statement of which type of index it 

is (e.g., market index, exchange-traded fund, etc.), or a brief statement describing the assets that 

the index seeks to track (e.g., U.S. large-cap equities). The column indicating the type of index 

crediting methodology used for each index-linked option would only be required if the RILA 

utilizes multiple index crediting methodologies under the contract (e.g., point-to-point, step-up, 

enhanced upside, etc.).164 The disclosures regarding limits on index loss would require an issuer 

to state the current percentage used in the insurance company’s interest credit methodology to 

limit the amount of negative index return credited to the index-linked option and to identify in 

the table whether this limit is a buffer, floor, or some other rate or measure.165 In the last column, 

issuers would be required to state the guaranteed minimum percentage that may be used to limit 

 

164  If all index-linked options offered by a RILA contract used the same crediting methodology, the table 
would not include the column. See, e.g., supra footnote 139. 

165  In contrast to current limits on index gain, we understand that the current limits on index loss typically do 
not change frequently. 



102 

the amount of positive index return credited to the index-linked option and to identify in the table 

whether this limit is a cap, participation rate, or some other rate or measure.166 

To ensure investors only receive disclosure relevant to them, RILAs would only be 

permitted to include in the table those index-linked options that are available under the contract. 

Further, to promote disclosure in a consistent format to facilitate comparisons, issuers would be 

allowed to add, modify, or exclude table headings only as necessary to describe the material 

features of an index-linked option. Insurance companies would also be required to indicate if any 

of the index-linked options are restricted (e.g., because of a “hard” or “soft” close), consistent 

with the current disclosure requirements for variable options. The proposed instructions also 

would state that if an index provider calculates the index’s return in a manner that does not 

reflect the full investment performance of the assets tracked by the index (e.g., the return does 

not reflect dividends paid on the assets composing the index, the return reflects a fee or cost, 

etc.), a footnote to the table must, if applicable, be included stating that the index’s return does 

not reflect the full investment performance of the assets it tracks, which will reduce the index’s 

performance. An investor evaluating index-linked options may be more familiar with a version 

of a given index that reflects the full performance of the index constituents, and this disclosure 

would alert investors that the index associated with a particular index-linked option will have 

relatively lower returns.  

Fixed Options 

Consistent with our proposed approach to the Item 6 disclosure requirements, we are 

proposing to require in the appendix summary information about fixed options currently 

 

166  As discussed above, instead of also requiring a column for current limits on index gains (in addition to the 
column for guaranteed minimum limit on index gains), the legend would state that information about 
current limits on index gains is available at a specified website address. 



103 

available under the contract. These disclosure requirements would be similar to the legend and 

table for index-linked options discussed above, adjusted to reflect fixed option details. The fixed 

option legend, in addition to identifying that what follows is a list of fixed options currently 

available under the contract, would indicate that the insurance company (1) may change the 

features of the fixed options identified, offer new ones, and terminate existing ones and (2) will 

provide the investor written notice before doing so. The fixed option table would include 

columns identifying (1) the name of the fixed option, (2) the term, and (3) the minimum 

guaranteed interest rate.167 Insurance companies would be instructed to include appropriate 

cross-references in the legend to the sections of the prospectus that describe the features of fixed 

options. As with index-linked options, insurance companies could add, modify, or exclude table 

heading only as necessary to describe material features of a fixed option. 

Request for Comment 

We request comment generally on the proposed inclusion of index-linked option 

summary information in the appendix, and specifically on the following issues: 

56. Should we require these new disclosures to be included in the appendix? Are the 

proposed appendix disclosures for index-linked options appropriate? Would they 

help investors to compare information among index-linked options and generally 

understand the index-linked options available? Is this information likely to be 

relevant and useful to investors? Is there more or different information that we 

should require? Should any of the information not be included? For example, 

should we require current limits on gains to be disclosed in the appendix, rather 

 

167  Consistent with the approach in Item 6, the minimum guaranteed interest rate would be required to be 
stated as a numeric rate rather than referring to any minimums permitted under State law. 



104 

than requiring the appendix to include a website address where information about 

current limits is available (as well as requiring this information in the statutory 

prospectus)? Would investors find it useful to have online access to information 

about current limits on gains? Will investors find current limits on index loss in the 

summary prospectus useful even if the current limits on index gains are not 

included? 

57. We are proposing to require in the statutory prospectus numeric examples, charts, 

graphs or other presentations to illustrate the mechanics of each type of index 

crediting methodology.168 Should we permit or require some or all of these 

examples for index-linked options to be included in the appendix? Would the 

inclusion of these examples add undue length or complexity to the appendix, or 

overwhelm the disclosure for other investment options? Could these concerns be 

ameliorated by only permitting or requiring a limited number of examples (e.g., no 

more than 4), or by placing certain other limitations on the inclusion of such 

examples? If so, how? If we were to require examples for index-linked options to 

be included in the appendix, should we also require the examples to be included in 

the Item 6 disclosures, or should such disclosures only be required in a single 

location (and if so, which one)? 

58. Should we include the proposed disclosure in the appendix relating to fixed 

options currently available under the contract? Are there any changes we should 

make to the specific proposed disclosure requirements? 

 

168  Proposed Item 6(d)(2)(iv) (Methodology and Examples) of Form N-4. We are proposing to permit this 
information to be included in an appendix. See supra section II.B.3(a). 



105 

4. Principal Risks of Investing in the Contract (Item 5) 

An investment in a contract offering index-linked options exposes investors to unique 

risks that may be different from those that are common to other investment products, including 

contracts that solely offer variable options. We propose to amend Item 5 to address certain 

principal risks that are particularly relevant to investors in RILAs. In addition to restructuring the 

current item to incorporate the proposed risk disclosure requirements addressing index-linked 

options, we propose certain structural changes that are designed to clarify existing requirements 

but are not anticipated to result in substantively different disclosure requirements for contracts 

offering variable options. These proposed changes also would consolidate certain risk disclosures 

insurance companies currently provide for variable annuities in other sections of the prospectus. 

We are proposing to require these disclosures in a single location to more consistently and 

effectively communicate risks to investors. As the Commission has previously explained, the 

principal risk disclosure in the prospectus is designed to provide a consolidated presentation of 

principal risks, which registrants can cross-reference to reduce repetition that might otherwise 

occur if the same principal risks were repeated in different sections of the prospectus.169 

The principal risk disclosure item of Form N-4 currently consists of a single paragraph 

requiring a registrant to summarize in the prospectus the principal risks of purchasing a contract, 

including the following risks: (1) poor investment performance, (2) that contracts are unsuitable 

as short-term savings vehicles, (3) limitations on access to cash value through withdrawals, and 

(4) the possibility of adverse tax consequences. We propose to retain these substantive risk 

disclosure requirements but would restructure the current single paragraph into separate sub-

 

169  See VASP Adopting Release at n. 690 and accompanying text. 



106 

items while also making certain minor changes designed to clarify existing obligations.170 The 

proposed sub-items are designed to be non-exclusive examples of the principal risks of investing 

in the contract being registered. In addition to existing disclosure requirements, these sub-items 

would also include new risk disclosures specific to index-linked options, as applicable.171 We are 

making parallel changes to the risk disclosures most applicable to variable annuities to avoid any 

implication that risk disclosure should be provided at a different level of detail than the 

disclosures for RILAs. Most contracts offering variable options that are currently registered on 

Form N-4 likely would not need to revise their risk disclosure in response to the proposed 

amendments to the risk disclosure requirements. In our experience, it is common practice for 

these registrants currently to include the disclosures that the proposal would require in their 

prospectuses as principal risk disclosure (or elsewhere in their prospectuses). 

The proposed approach would retain the current requirement for registrants to explain the 

principal risks of purchasing a contract, but would also require an explanation of the principal 

risks of investing in an investment option, including the risks of poor investment performance.172 

Additionally, for index-linked options, a registrant would disclose the maximum potential loss 

from negative index performance over the crediting period, as a percentage. Although 

disclosures that address certain risks of index-linked options would be required in other locations 

in the prospectus, we are proposing that RILA issuers include certain risk factors, such as this 

one, in the consolidated summary of principal risks associated with the contract.173 The 

 

170  See proposed Item 5(a)-(b), (d)-f) of Form N-4. 
171  See proposed Item 5(c) of Form N-4. 
172  See proposed Item 5(a) of Form N-4.  
173  See proposed Item 1(a)(6) (Outside Front Cover Page) (“Prominently disclose as a percentage the 

maximum amount of loss from negative Index performance that an investor could experience after taking 
 



107 

maximum potential loss resulting from negative index performance is a salient way to quantify 

potential returns for particular investment options. For example, absent this disclosure, it may not 

be apparent to investors that an index-linked option that offers a -10% buffer still has the 

potential for 90% loss.174 This statement would help investors assess the particular risks 

associated with RILAs in the context of the other required principal risk disclosures. The 

potential risk of loss is particularly important for investors to understand because RILAs are 

often presented to investors as having the benefit of offering a balance between the opportunity 

for growth and the reduced risk of loss relative to savings alone or more conservative 

investments.175 

The next proposed sub-item, which concerns the risks of early withdrawal, would retain 

the current requirement for registrants to disclose that contracts are unsuitable as short-term 

savings vehicles and to summarize the limitations on access to cash value through withdrawals, 

including the possibility of adverse tax consequences.176 We propose to expand this disclosure 

requirement to specify that a summary of the limitations on access to cash value through 

 

into account the minimum guaranteed limit on Index loss provided under the Contract.”); proposed Item 
2(b)(ii) (Overview of the Contract) (“[P]rominently state as a percentage the maximum amount of loss an 
investor could experience from negative Index performance, after taking into account the minimum 
guaranteed limit on Index loss provided under the Contract.”); proposed Item 6(d)(1)(ii) (Investment 
Options) (“Prominently state as a percentage the maximum amount of loss an investor could experience 
from negative Index performance, after taking into account the minimum guaranteed limit on Index loss 
provided under the Contract.”). 

174  We recognize that this example may suggest to some investors that an option with a buffer is riskier than 
one with a floor. In fact, the protection offered by a buffer is more likely to be triggered than the protection 
offered by a floor. In general, a buffer protects the investor from experiencing smaller, more common 
losses on an index (as well a portion of any larger loses), while a floor protects the investor from larger, 
less-common losses (but does not protect against smaller losses). Insurers that offer both buffers and floors 
should generally make this distinction clear to investors in their Item 5 risk disclosures, as well as in 
response to proposed Items 2(b)(2) and 6(d) of Form N-4. 

175  See OIAD Report at Section 4, Review of RILA Marketing. 
176  See proposed Item 5(b) of Form N-4. 



108 

withdrawals may also include, if applicable, surrender charges, as well as negative contract 

adjustments and loss of interest. These are features of RILAs that implicate why they are not 

short-term saving vehicles. In addition, insurance companies that offer index-linked options 

would be required to state the maximum potential loss resulting from a negative contract 

adjustment, as a percentage. Although this last statement would be required to be provided in 

other locations in the prospectus, we are proposing to include this risk disclosure in the 

consolidated summary of principal risks because contract adjustments can significantly affect 

contract value.177 Also, contract adjustments are a distinctive feature of contracts with index-

linked options that we recognize (based on results of qualitative investors interviews) investors 

can find difficult to understand. Quantifying maximum potential loss resulting from a negative 

contract adjustment is intended to illustrate the possible effects of these adjustments. Further, 

unlike other types of losses, contract adjustments are typically avoidable by investors. As a 

result, we anticipate that showing the maximum loss possible would help investors evaluate 

whether to take an action that would result in a contract adjustment. It also would help investors 

understand the potentially significant risks that they could face in a RILA, regardless of a 

RILA’s bounded return structure. Therefore, this statement would assist investors in assessing 

unique risks associated with index-linked options in the context of the other required principal 

risk disclosures. 

 

177  See proposed Item 1(a)(7) (Outside Front Cover Page) (“Prominently state as a percentage the maximum 
potential loss resulting from a negative Contract Adjustment, if applicable.”); proposed Instruction 2(a) to 
Item 3 (Key Information Table) (“Include in this statement the maximum potential loss (as a percentage of 
the investment) resulting from a negative adjustment. . . .”); proposed Item 4 (Fee Table - Transaction 
Expenses) (“Contract Adjustment Maximum Potential Loss (as a percentage of Contract value at the start 
of the Crediting Period or amount withdrawn, as applicable)”); and proposed Instruction 1 to Item 7(e) 
(Contract Adjustment) (“State the maximum potential loss, as a percentage, that could result from a 
negative Contract Adjustment.”). 



109 

The next proposed sub-item, which concerns the principal risks associated with index-

linked options, would include new risk disclosure requirements tailored to address unique risks 

associated with these investment options.178 Under these proposed requirements, a registrant 

would have to describe the principal risks of investing in any index-linked options offered under 

the contract (in addition to the risks of potential loss from negative index performance, as 

discussed above). The proposed sub-item would require the prospectus to include a statement 

that an investor in an index-linked options is not invested in the index or in the securities tracked 

by the index. This reflects our concern, based on the results of qualitative investor interviews, 

that investors may be confused about whether an investment in an index-linked option is a direct 

investment in the index.  

To help ensure that RILA prospectuses address certain key risks, the proposed 

instructions to this disclosure requirement would specify that discussion of the principal risks 

related to index-linked options would be required to include the principal risks relating to, as 

applicable: (1) limiting positive index returns; (2) the possibility of losses despite limits on 

negative index returns; (3) interest crediting methodologies; (4) the impact of contract fees on the 

amount of interest credited; and (5) the reallocation of contract value at the end of an index-

linked option’s crediting period. We are also proposing instructions specifying that this 

discussion would be required to include, as applicable, principal index risks relating to: (1) the 

type of index (e.g., market risk, small-cap risk, foreign securities risk, emerging market risk, 

etc.); (2) the exclusion of dividends from index return; and (3) market volatility. These 

instructions would require RILA issuers to specify which risks relate to each index offered under 

 

178  See proposed Item 5(c) of Form N-4. 



110 

the contract, and to describe the principal risks related to the possible substitution of the index 

before the end of an index-linked option’s term. 

An additional proposed new sub-item would require a description of the principal risks 

associated with any contract benefits (e.g., death benefits, living benefits), including the impact 

of excess withdrawals, if applicable. These risks include, for example, investment restrictions 

associated with a living benefit, which may limit investment performance.179 As an additional 

example, there are risks that withdrawals may substantially reduce the benefit, that some 

guaranteed benefits are based on a contingency that may never occur (e.g., the contract value 

falling to zero), that the rates for contract benefits may change over time, and that certain 

benefits may be discontinued prior to election. Because these risks could impact the expected 

performance of the annuity, or in some cases could even terminate the annuity, we are proposing 

to require issuers to disclose them to in the prospectus. 

Another proposed new sub-item would require an explanation of the principal risks 

associated with the insurance company’s ability to meet its guarantees under the contract, 

including risks relating to its financial strength and claims-paying ability, which as described 

below may be of particular concern for investors who allocate contract value to index-linked 

options.180 We recognize that a summary of certain insurance company risks is currently required 

to be disclosed in the KIT.181 Moreover, although there is no corresponding disclosure 

requirement that mandates the inclusion of insurance-company-related risks in the principal risk 

disclosure in contract prospectuses, most Form N-4 registrants already provide this disclosure. 

 

179  See proposed Item 5(d) of Form N-4. 
180  See proposed Item 5(e) of Form N-4. 
181  See current Instruction 3(d) to Item 2 of Form N-4. 



111 

We therefore do not expect that current Form N-4 registrants likely would have to modify their 

disclosures to comply with the proposed requirement. Nevertheless, we propose to require this 

disclosure to be included in the consolidated principal risks section of the prospectus for 

completeness, and to help ensure that a prospectus for a contract that offers fixed options and 

index-linked options discloses the insurance company’s claims-paying ability with regard to its 

contractual guarantees. In contrast to variable options, where amounts invested are held in a 

separate account insulated from the insurance company’s general account and protected from 

general account creditors, assets invested in an index-linked option are subject to the insurance 

company’s claims-paying ability for most RILAs.  

Lastly, we propose a final new sub-item, which would require a description of the 

principal risks relating to any material reservation of rights under the contract, including if 

applicable, (1) the right to remove or substitute portfolio companies; (2) add or remove index-

linked options and change the features of an index-linked option from one crediting period to the 

next; (3) stop accepting additional purchase payments; and (4) impose investment restrictions or 

limitations on transfers.182 We propose to require this disclosure because the ability to 

discontinue contract features, alter an investor’s ability to participate in an index’s upside 

performance, and otherwise change features is important information for investors when making 

an investment decision. 

We request comment generally on the proposed amendments to Item 5 of Form N-4, and 

specifically on the following issues: 

 

182  See proposed Item 5(f) of Form N-4. 



112 

59. Do the proposed amendments to Item 5 appropriately describe the types of 

principal risks that are typically associated with investing in a contract that offers 

variable options and/or index-linked options? Should different or additional 

principal risks be required to be summarized in the prospectus? 

60. Do commenters agree with the proposed approach of amending Item 5 to 

restructure the current item into separate sub-items? For contracts offering variable 

options, do commenters agree that the proposed changes would clarify existing 

requirements, but would not generally result in substantively different principal 

risk disclosure requirements? Would the proposed changes to Item 5 require 

contracts offering variable options that are currently registered on Form N-4 to 

revise their current risk disclosure, or could they continue to use their existing 

disclosures? Why or why not? To the extent that Form N-4 registrants are currently 

disclosing risks on topics that the proposed changes address in other parts of the 

prospectus, would this current risk disclosure be considered to be “principal” risk 

disclosure?  

61. Although we are proposing to require disclosure of specified index-linked option -

related principal risks to be provided in response to the Item 5 disclosure 

requirements, we also propose to require aspects of these risks to be disclosed in 

response to certain other prospectus disclosure requirements, facilitating a layered 

disclosure approach. Is this appropriate? What “layers” of risk disclosure are 

appropriate for the summary prospectus, statutory prospectus, and SAI? 

62. Are the proposed additions to the current principal risk disclosures appropriate? If 

not, why not? Should we, for example, require a registrant specifically to disclose 



113 

principal risks associated with index-linked options, contract benefits, the 

insurance company, and any material reservation of rights under the contract, as 

proposed? If not, why not? Is an insurer’s ability to discontinue contract features, 

reduce index limits on gains and otherwise change features likely to be 

inconsistent with an investor’s reasonable expectations, as we state above? Should 

we modify any of the aspects of these proposed principal risk disclosure 

requirements?  

5. Addition of Contract Adjustments and Other Amendments to Fee and 

Expense Disclosures (Items 4, 7, and 22) 

We are proposing amendments to Form N-4 to require specific disclosures regarding 

contract adjustments and other implicit RILA-specific costs that can result in a significant 

erosion of investment principal. The proposed disclosures are designed to provide investors with 

a better understanding of the mechanics of these costs and the associated potential for loss. 

Under the proposed approach, these disclosure requirements would be set forth in Items 4, 7, and 

22(d) of Form N-4. We are also proposing revisions to the existing provisions of these Items, 

applicable to all Form N-4 issuers, to clarify certain terminology.  

a) Amendments to Fee Table Disclosure Requirements (Item 4) 

We propose amending Item 4 to require specific disclosures regarding contract 

adjustments and other costs specific to RILAs. Item 4 currently requires variable annuity 

registrants to provide comprehensive information on the fees and expenses investors will pay 

when buying, owning, and surrendering or making withdrawals from a contract, as well as 

expenses paid each year during the time the investor owns the contract. While RILAs typically 

do not charge the explicit ongoing fees and expenses common to variable annuities, investors do 

experience an implicit ongoing fee to the extent the insurer limits, through the use of a cap, 



114 

participation rate, or some other rate or measure, index gains. Moreover, RILA issuers typically 

utilize contract adjustments, which can result in a significant charge to investors who make 

withdrawals from an index-linked option or from the contract before the end of a specified 

period. Further, investor testing suggested that most participants struggled to fully comprehend 

the costs to investors of these products.183 These costs include contract adjustments because they 

can negatively affect an investor’s contract value or the amounts an investor could withdraw 

from the contract.184 Accordingly, we are proposing to include a detailed description of contract 

adjustments in the prospectus, and that this disclosure be proximate and similar to other 

disclosures regarding fees and expenses. Thus, we are proposing several amendments to 

incorporate the concept of contract adjustments as well as implicit ongoing fees and expenses 

into the current Item 4 disclosure requirements. We propose generally expanding the tabular 

disclosures that Item 4 requires to address contract adjustment costs that investors will pay when 

buying, owning, and surrendering or making withdrawals from an investment option, and as 

noted below, requiring disclosures about the maximum potential loss that an investor could 

experience in connection with a contract adjustment. We are also proposing to expand the tabular 

disclosures with respect to annual contract expenses, to alert investors to the implicit ongoing 

costs associated with limiting positive index returns. In addition, we are proposing certain non-

substantive changes to the fee table disclosures and instructions that would be applicable to all 

issuers.185 Particularized changes we propose to the fee table disclosures are discussed below.  

 

183  See OIAD Report at Section 6, Quantitative Testing, Testing Impacts, Table 9 (noting that 16.2 percent of 
participants understood that a participation rate reduces potential gains from the market and 52.1 percent of 
participants understood that a cap reduces potential gains from the market). 

184  See, e.g., OIAD Report at Section 5, Qualitative Testing, Results From Round 2.  
185  In order to eliminate unnecessary information in the prospectus, we propose amending the general 

instructions to clarify that registrants may omit a narrative explanation that is not applicable under the 
 



115 

Transaction Expenses Table 

Form N-4 issuers currently must include a transaction expenses table in their 

prospectuses, describing fees and expenses investors must pay when buying, owning, and 

surrendering or making withdrawals in connection with a contract. This requires a description of 

the sales load imposed on purchases (as a percentage of purchase payments), the deferred sales 

load (as a percentage of purchase payments or amount surrendered, as applicable), and transfer 

fees. To provide proximate and similar disclosure for RILA-specific costs, we propose to require 

that insurance companies additionally include the maximum negative contract adjustment that 

may be imposed, to be expressed as a percentage of contract value at the start of the crediting 

period or the amount withdrawn, as applicable. To provide investors notice of the circumstances 

where they might be subject to this cost, we also propose that insurance companies include a 

footnote describing all transactions potentially subject to a contract adjustment.186  

Currently this table also requires registrants to describe the maximum exchange fee that 

investors could incur for any exchange or transfer of contract value from the registrant to another 

investment company, or between sub-accounts or to the insurance company’s general account. In 

a change relevant to all Form N-4 issuers, we are proposing a terminology change, replacing the 

term “exchange fee” with “transfer fee,” as this term better reflects our experience, namely that 

 

contract. See proposed instruction 1 to Item 4 of Form N-4. We also are proposing an amendment to 
general instruction 5 regarding the preparation of the Transaction Expenses and Annual Contract Expenses 
tables, clarifying that the instruction to disclose the maximum guaranteed charge as a single number where 
a fee is calculated based on a benchmark does not apply to a contract adjustment. See proposed instruction 
5 to Item 4 of Form N-4.  

186  See proposed instruction 11 to Item 4 of Form N-4. 



116 

the vast majority of such fees are those imposed on transfers of account value among investment 

options under the contract.187 

Annual Contract Expenses 

Form N-4 issuers currently must include an annual contract expenses table in their 

prospectuses, detailing the fees and expenses that investors pay each year in administrative 

expenses, base contract expenses, and optional benefit expenses. Currently, base contract 

expenses must be expressed as a percentage of average account value. In a change relevant to all 

Form N-4 issuers, we propose an amendment that would also allow base contract expenses to be 

expressed as a percentage of average account value or contract value. We do not expect that this 

change will substantively affect variable annuities’ existing disclosure.  We are proposing this 

expansion to describe expenses deducted where index-linked options or fixed options are 

implicated, as those options do not generally use the concept of average account value.188 

Additionally, to place investors on notice of the unique and ongoing trade-off costs associated 

 

187  See proposed Instruction 10 to Item 4 of Form N-4. Under the proposed definition, “transfer fee” would 
encompass both the maximum fee charged for any exchange or transfer of contract value between 
investment options as well as the maximum fee charged for any exchange or transfer of contract value from 
the registered separate account to another investment company or from the registered separate account to 
the insurance company’s general account. Thus, the proposed amendments regarding the definition and 
terminology surrounding transfer fees would not result in any substantive change for existing Form N-4 
issuers. 

188  We are also proposing two related, non-substantive amendments to the instructions relating to annual 
contract expenses relevant to all issuers. These changes are to broaden terminology given the expanded 
scope of issuers that under the proposal could file on Form N-4. Currently the instruction for describing 
administrative expenses references “any Contract, account, or similar fee on all Investor Accounts;” 
however, as noted below, we propose deleting the term “Investor Account,” and accordingly also propose 
amending this instruction to conform to that change. Relatedly we are proposing to amend the instruction 
regarding base contract expenses to remove a reference to fees and expenses deducted “from separate 
account assets or charged to all Investor Accounts,” replacing it with an instruction to consider fees and 
expenses “charged to any Investment Option.” 



117 

with RILAs that may not be captured by this table, we are proposing to require registrants to 

include the following statement in the table: 

In addition to the fees described above, we limit the amount you can earn on 
an Index-Linked Option. Imposing this limit helps us make a profit on the Index-
Linked Option. In return for accepting this limit on Index gains, you will receive 
some protection from Index losses. 
 
Annual Portfolio Company Expenses 

Form N-4 currently requires issuers to include in the prospectus an annual portfolio 

company expenses table, disclosing the minimum and maximum total operating expenses 

charged by the portfolio companies offered by variable annuity contracts that may be 

periodically charged to investors during the time they own the contract. This includes costs 

incurred by portfolio companies directly and, if the portfolio company invests in other mutual 

funds, the fees and expenses the portfolio company indirectly incurs from these investments. In a 

change that also would apply to variable annuities prospectuses, we are proposing that registrants 

disclose that expenses shown in this table may change over time and may be higher or lower in 

future. We propose this change for two reasons. First, this modification would help to ensure that 

investors understand that these charges may increase over time, notwithstanding that these 

charges are described as maximum expenses. Second, given that we are proposing similar 

disclosures with regard to features of RILA offerings that are subject to change, we propose to 

require a similar level of disclosure with regard to variable annuity offerings where appropriate. 

Example 

Form N-4 issuers currently must provide an example in their prospectuses that is 

designed to allow variable annuity investors to compare the cost of investing in the contract with 

the cost of investing in other variable annuity contracts. We propose amending the example 

requirements to clarify, for variable annuity and RILA issuers, that the example is designed to 



118 

permit investors to compare costs of investing solely in variable options under the contract with 

costs associated with variable options offered under other annuity contracts. Under the proposal, 

the example would be preceded with a legend specifically stating that: the example assumes that 

all contract value is allocated to variable options; the example does not reflect contract 

adjustments; and costs would likely differ if an investor selects index-linked options or fixed 

options. 

b) Charges (Item 7) 

Currently, Item 7 requires registrants to provide a brief description in their prospectuses 

of all current charges deducted from purchase payments, investor accounts, or assets of the 

registrant. Consistent with the proposed changes to Item 4, we also are proposing a change in 

terminology that would affect all Form N-4 issuers, replacing references in Item 7 to “investor 

accounts” and the assets of “registrants” with the terms “contract value” and “investment option” 

assets, respectively. Therefore, in responding to Item 7, variable annuity and RILA issuers would 

describe charges deducted from purchase payments, contract value, or investment option 

assets.189 

For the reasons described above and given the potentially significant economic 

consequences contract adjustments can have on RILA investors, we are also proposing additional 

specific requirements to incorporate contract adjustments into the prospectus’s disclosure of 

 

189  Additionally, we are proposing two non-substantive terminology changes in Instruction 3 to Item 7(a) 
regarding how registrants must describe the sources that will be used to cover shortfalls where proceeds 
from sales load will not cover expected costs. First, we propose replacing the term “depositor” with the 
term “insurance company.” Second, where shortfalls are to be made from an insurance company’s general 
account, this instruction requires a disclosure that amounts paid by the insurance company may consist of 
proceeds derived from base contract expenses deducted from the registered separate account. We propose 
striking this italicized language referring to assets of the registered separate account because it is 
superfluous given the definition of “base contract expenses” in proposed Instruction 14 to Item 5, discussed 
above. 



119 

charges, which would entail detailed descriptions of any contract adjustments under the contract. 

These disclosures are designed to be comparable in scope and proximate to existing disclosures 

about contract charges applicable to variable annuities.190  

Specifically, we are proposing that insurance companies would have to: (1) disclose (as a 

percentage) the maximum potential loss that could result from a negative contract adjustment; 

(2) define the period during which any contract adjustment would apply; and (3) describe all 

transactions subject to a contract adjustment.191 Insurance companies also would have to include 

a description of how the contract adjustment will affect the contract value, surrender value, death 

benefit, and any living benefits, and disclose that a negative adjustment could reduce the value 

under the contract in an amount greater than the value withdrawn.192 They would also need to 

describe, in simple terms, how the contract adjustment is determined under the contract, and the 

relationship between the contract adjustment and any other charges or fees applied under the 

contract, including, for example, the sequence in which charges and adjustments are applied.193 

The required disclosure would also require the issuer to briefly describe the purpose of the 

 

190  See instructions (a) through (d) to Item 7 of Form N-4. 
191  See proposed instructions (e)(1) through (e)(3) to Item 7 of Form N-4. In describing the transactions subject 

to a contract adjustment, the insurance company would need to describe, for example, whether adjustments 
apply if amounts are transferred or withdrawn from an index-linked option or from the contract due to a 
partial withdrawal, surrender, election of an annuity option, or payment of death benefit proceeds, or where 
a particular optional benefit (e.g., a withdrawal under a guaranteed living benefit) is utilized, and to 
describe any circumstances under which the adjustment will be waived. 

192  See proposed instruction (e)(5) to Item 7 of Form N-4. If applicable, the insurance company would also be 
required to state the impact of the contract adjustment on interest to be credited to an index-linked option at 
the end of its crediting period. 

193  See proposed instructions (e)(4) and (e)(6) to Item 7 of Form N-4. The description of how the contract 
adjustment is determined would have to provide a meaningful explanation of all the material features of the 
contract adjustment’s application, including: (1) information about any formula applied (e.g., a change in 
value of hypothetical derivative instruments); (2) the factors that may cause an adjustment (e.g., timing of 
withdrawal, index volatility, increase in external interest rates); (3) a description of any proportionate 
withdrawal calculations; and (4) how adjustments are applied (e.g., allocated among the investment 
options, applied to a withdrawal amount). 



120 

contract adjustment, including, for example, that the contract adjustment transfers risk from the 

insurance company to the investor to protect the insurance company from losses on its own 

investments supporting contract guarantees if amounts are withdrawn prematurely.194 Finally, 

issuers would be required to disclose how an investor can obtain information about the current 

value of the contract adjustment, while stating that this value can fluctuate daily, and that the 

quoted value may differ from the actual value at the time of adjustment.195  

These proposed disclosures are intended to provide investors with the necessary scope 

and level of detail of the contract adjustments that could negatively affect an investor’s contract 

value or the amounts an investor could withdraw from the contract. These disclosures are further 

justified given the RILA Act’s requirement that the Commission use the results of investor 

testing in designing a registration form for RILAs. That mandated investor testing showed that 

participants were confused about contract adjustments, their purpose, the situations in which they 

could arise, their potential magnitude, and their relationship to other fees and charges (e.g., 

surrender fees).196 These disclosures are designed to address these areas of identified confusion.  

To simplify this disclosure, we propose specifying that detailed disclosure on the method 

of calculating the contract adjustment appear in the SAI, as opposed to the prospectus.197 We 

also propose requiring that Item 7(e) include a cross-reference to Item 22 of Form N-4, which 

would require more-detailed disclosure on the contract adjustment’s calculation (including 

illustrative examples as to adjustment’s operation) to appear in the SAI. The more detailed SAI 

 

194  See proposed instruction (e)(7) to Item 7 of Form N-4. 
195  See proposed instruction (e)(8) to Item 7 of Form N-4. 
196  See, e.g., OIAD Report at Section 5, Qualitative Testing, Results From Round 2 and Section 7, 

Conclusions. 
197  See proposed instruction (e)(4) to Item 7 of Form N-4.121 

discussion is not, however, a substitute for the Item 7 requirements. Thus, for example, an 

insurance company could not include the formula underlying the contract adjustment calculation 

in the SAI in lieu of the required discussion of the formula in the prospectus. Rather, in addition 

to stating the formula in the SAI, the insurance company would need to include in the prospectus 

a brief description, in simple terms, of the manner in which contract adjustment is determined. 

Further, while the proposed disclosures are tailored to the mechanics of contract 

adjustments, they are also designed to be, where possible, consistent with existing requirements 

regarding disclosure of current charges deducted from purchase payments, investor accounts, or 

assets of the registrant. For example, Form N-4 currently requires disclosure of current fees and 

charges, which are typically expressed as a percentage. Because the value of a given contract 

adjustment can change daily, we are proposing that insurance companies disclose the maximum 

potential loss, as a percentage, that could result from a negative contract adjustment (rather than 

mandate a disclosure of a current contract adjustment value that could quickly become 

outdated).198  

c) Purchase of Securities Being Offered (Item 22) 

We are proposing to amend Item 22, which addresses the purchase of securities being 

offered, to require specific, detailed contract adjustment disclosures to appear in RILA issuers’ 

SAIs. As discussed above, issuers would be required to provide a simple explanation of the 

underlying mechanics of contract adjustments in their prospectuses, while noting that further 

detail is available in the SAI and providing a cross reference to that information. Under the 

proposal, in addition to the discussion required in the prospectus by Item 7, Item 22 would 

 

198  See proposed instruction (e)(1) to Item 7 of Form N-4. 



122 

require issuers to explain fully the operation of any contract adjustment that can be applied under 

the contract. This more detailed explanation would not take the place of the prospectus 

discussion and would need to address all the material features of the adjustment and include an 

explanation of any formulas used to calculate the adjustment, and at least one numeric example 

to illustrate the application of the contract adjustment. This numeric example would have to 

include a negative adjustment, reflect surrender charges (if applicable), and disclose the 

percentage change in contract value as a result of the adjustment.  

The mechanics of contract adjustments under a RILA contract are typically complex, 

often implicating the application of factors or formulas that can be difficult for many investors to 

understand. Because the application of a negative contract adjustment can substantially affect an 

investor’s contract value, however, we propose to require the inclusion of information on 

negative contract adjustment in the SAI, so that investors who wish to learn more about the 

calculation may do so.  In addition to promoting transparency generally, this proposed disclosure 

would ensure that liability attaches under section 11 of the Securities Act for any material 

misrepresentations regarding the application of a contract adjustment. 

We are also proposing to make applicable to RILA issuers certain existing SAI disclosure 

requirements about the purchase of securities being offered. Specifically, we are proposing 

revisions to the instructions to the existing requirement to describe the manner in which the 

securities are offered to the public, which would instruct RILA issuers to respond by addressing 

any exchange privileges between investment options.199 Additionally, we propose to make the 

existing requirement to describe the method used to determine the sales load applicable to RILA 

 

199  See proposed Item 22(a) of Form N-4. 



123 

issuers.200 We do not propose applying the existing disclosure requirement dealing with frequent 

transfer arrangements to RILA issuers, as its provisions are relevant only to variable annuity 

contracts.201 

d) Request for Comment 

We request comment on these proposed amendments. 

63. Do commenters agree that it is appropriate to include a discussion of contract 

adjustments in Items 4, 7, and 22 as proposed? If not, how would commenters 

suggest issuers disclose contract adjustments to ensure that investors have 

sufficient information to make an informed investment decision regarding RILAs? 

64. Is it appropriate to require the disclosure of the contract adjustment maximum 

potential loss in the transaction expense table? Do commenters agree that is 

appropriate to require that issuers express the contract adjustment maximum 

potential loss as a percentage? If not, what alternative measure would commenters 

suggest? 

65. Do commenters agree that the proposal strikes the proper balance in the location of 

the proposed contract adjustment disclosures? Are there any contract adjustment 

disclosures we propose including in the SAI that commenters believe would be 

more appropriately located in the prospectus? Are there any contract adjustment 

disclosures we propose including in the prospectus that commenters believe would 

be better situated in the SAI? 

 

200  See proposed Item 22(b) of Form N-4. 
201  See proposed Item 22(c) of Form N-4. 



124 

66. Do commenters agree with our proposal that issuers be required to include, in the 

annual contract expenses table, a statement disclosing that, in addition to the 

expenses described in the table, investors will be subject to limits on the amounts 

they can earn in connection with index-linked options? Do commenters agree that 

it is appropriate to include a statement addressing current limits on gains in 

conjunction with the annual contract expenses table? Do commenters agree the 

proposed statement captures the most salient concerns to investors of these kinds 

of limits on gains? Do commenters have any suggestions for alternate wording or 

placement of the statement?  

67. Do commenters have any suggestions about additional or alternative disclosures 

that would address the areas of confusion regarding contract adjustments that this 

release describes as being identified in investor testing? 

68. Are there any concerns with our proposal to use the term “contract adjustment” 

when referring to MVAs (market value adjustments) and IVAs (interim value 

adjustments)? Is there an alternative term that we should use to describe these 

kinds of adjustments?  

69. Does our proposal to replace the term “exchange fee” with “transfer fee” in Item 4 

raise any concerns? 

70. With regard to the numeric examples we propose requiring in the SAI, should 

there be any additional requirements for what those examples would need to 

include? For example, should we require that the example utilize the average 

negative contract adjustment in operation for the preceding year, or the negative 

contract adjustment expected over the next year? Should we also (or instead) 



125 

require an example of a contract adjustment in the prospectus? If so, why, and 

what particular assumptions should we require in the example?  

71. Do commenters agree with our recommendation to place the more detailed 

disclosures associated with the mechanics of contract adjustments (such as 

applicable formulas) in the SAI as opposed to the prospectus? Why or why not?  

72. In addition to the contract adjustment disclosures we have proposed, should we 

also require issuers to provide a graphic illustrating the operation of a contract 

adjustment? If so, where should we require that graphic illustration be presented, 

and what particular circumstances should it illustrate? For example, would it be 

helpful to require issuers to include a graphic illustration demonstrating how a 

contract adjustment works when investors withdraw amounts from their contract 

prior to the end of a crediting period? Should we require illustrations that 

demonstrate the operation of a contract adjustment for investors in circumstances 

where they change to a different index-linked option before the end of a crediting 

period, and demonstrating how they can change investment options to minimize 

the financial impact to their contract value? 

6. Information about Contracts with Index-Linked Options (Item 31A) 

We are proposing new Item 31A of Form N-4 to require census-type information 

regarding RILAs offered in connection with the applicable registration statement. Specifically, 

under proposed Item 31A, an insurance company would be required to provide the following 

information regarding any RILA offered through the registration statement, as of the most recent 

calendar year-end: (1) the name of each contract; (2) the number of contracts outstanding; (3) the 

total value of investor allocations attributable to index-linked options; (4) the number of 

contracts sold during the prior calendar year; (5) the gross premiums received during the prior 



126 

calendar year; (6) the amount of contract value redeemed during the prior calendar year; and (7) 

whether the contract is a “combination contract,” that is, a contract that offers variable options in 

addition to index-linked options. This information would be required as of the most recent 

calendar year-end and, accordingly, would generally be updated through a post-effective 

amendment to a registration statement on Form N-4.202 

This information is census-type data that would provide contract-level disclosures 

designed to assist the Commission and staff in identifying trends in insurance companies’ 

offerings of RILAs. This information would also provide improved transparency to investors by 

supplementing the information available about the marketplace for the contracts offered in 

connection with a registration statement. These items are relatively limited in scope and 

primarily consist of information that should generally be readily available to issuers. The 

particular data required is similar to that provided by registered separate accounts that likewise 

assist the Commission and staff in identifying trends in variable annuities.203  

We are proposing to require information to be presented as of the most recent calendar 

year-end to provide the Commission and its staff with information that will be updated with an 

annual frequency for offerings of RILAs. We anticipate that this information would typically be 

updated as part of an issuer’s annual update to its registration statements for such contracts.204 

This approach would result in information provided as of a uniform date for all offerings of 

 

202  See proposed Item 31A of Form N-4. An issuer transitioning from an existing registration statement on 
Form S-1 or S-3 to Form N-4 through a post-effective amendment would be required to report this 
information as of the most recently completed calendar year in its first post-effective amendment 
transitioning onto Form N-4.  

203  See Item F.14 of Form N-CEN; see also Investment Company Reporting Modernization, Investment 
Company Act Release No. 32314 (Oct. 13, 2016) [81 FR 81870 (Nov. 18, 2016)] at the sentences 
following n.1142. 

204  See 15 U.S.C. 77j(a)(3). 



127 

RILAs, regardless of the issuer’s filing date, and, in turn, would provide for increased 

comparability across issuers and contracts.205 Requiring this information to be updated annually 

is intended to achieve an appropriate balance between providing the Commission and its staff 

with current information while avoiding overburdening issuers. An annual snapshot should be 

sufficient for the census-type nature of the information and would provide Commission staff 

with appropriate intervals of data points over time in which to identify trends in insurance 

companies’ offerings of RILAs. Requiring these issuers to report such census information semi-

annually or more frequently would place an increased burden on issuers that may not be justified 

by a commensurate increase in the value of the information received by the Commission. 

This reporting would provide the Commission with additional transparency into the 

RILA market segment, which would in turn improve the effectiveness of the Commission’s 

oversight of offerings on Form N-4. Requiring this high-level reporting would permit the 

Commission to identify trends occurring in this market segment over time and assist with 

allocating the Commission’s resources in administering the form. This reported information on 

index-linked options would complement parallel census-type information that is currently 

required to be reported annually on Form N-CEN by registered unit investment trusts offering 

variable annuities.206 The new census-type information therefore would help provide the 

Commission with a more complete picture of the marketplace for insurance products offered 

 

205  We understand that insurance companies offering RILAs have a December 31 fiscal year end which, in 
practice, means a distinction between calendar year and fiscal year would result in limited effect on the 
reporting. 

206  Issuers registering combination contracts on Form N-4 would be required to exclude amounts allocated to a 
variable option when providing information in response to Item 31A as these allocations would be 
separately reported by registered separate accounts on Form N-CEN. 



128 

through registration statements on Form N-4. In addition, this information may benefit the public 

in supplementing the information available about RILAs. 

We request comment on these proposed amendments. 

73.  Are the required reporting elements in Item 31A of proposed Form N-4 

appropriate and clear? If not, what elements require additional instruction? 

74. Do commenters agree that it is appropriate to require reporting under Item 31A to 

be provided as of calendar year-end? Do commenters agree that there is limited 

practical difference between requiring a fiscal year-end and calendar year-end 

requirement in light of investment company practices?  

75. Should we require additional or different reporting of census-type reporting 

regarding RILAs? If so, should we also amend the requirements of Form N-CEN 

to ensure parallel reporting by registered unit investment trusts offering variable 

annuities registered on Form N-4? 

76. Would RILA issuers face any significant challenges in providing the required 

reporting elements? If so, why? 

77. Do commenters agree that it would be appropriate for issuers with existing 

contracts to report information required by proposed Item 31A for the calendar 

year prior to the calendar year the issuer first transitions its registration statement 

onto Form N-4?  

7. Other Amendments and Provisions 

Our proposed amendments also include certain other amendments to Form N-4 and 

related rules designed to accommodate the inclusion of RILA issuers on that form. These include 

amendments to Form N-4’s facing sheet, definitions, exhibit list, and required representations, as 



129 

well as amendments to certain Securities Act rules that help to implement the proposal. These 

proposed amendments are discussed below. 

a) Facing Sheet  

We are proposing amendments to include a new checkbox section on the facing sheet. 

Specifically, an issuer would be required to identify in this new section: (1) if it is a new 

registrant, defined as, as applicable, a registered separate account or insurance company that has 

not filed a Securities Act registration statement or amendment thereto within 3 years preceding 

this filing;207 (2) if it is an emerging growth company (“EGC”), as defined by Rule 12b-2 under 

the Exchange Act; (3) if it is an EGC, whether it has elected not to use the extended transition 

period for complying with any new or revised financial accounting standards provided pursuant 

to Section 7(a)(2)(B) of the Securities Act; and (4) if it is relying on an exemption from 

Exchange Act reporting requirements in reliance on rule 12h-7.208 These changes would help the 

Commission better understand the types of registration statements being filed on Form N-4 and, 

in the case of the EGC information, mirrors similar facing sheet requirements found in Form S-1. 

In addition, we are proposing amendments to the description of the types of entities that use 

Form N-4 to include insurance companies that offer index-linked options, either as stand-alone 

or combination products.209  

 

207  For example, a variable annuity separate account that has not previously filed a Securities Act registration 
statement would identify itself as a new registrant, regardless of whether the sponsoring insurance company 
has filed a recent Securities Act registration statement or amendment thereto as the proposed requirements 
request information on the registrant. In the same manner, an insurance company filing on Form N-4 would 
determine whether it is a new registrant solely with respect to its own Securities Act registration statement 
filings. 

208  In addition to this checkbox, we are proposing an instruction that implements the requirements of rule 12h-
7 to indicate that the insurance company is relying upon the exemption provided by that rule in the relevant 
prospectus. See supra section II.B.3.b. 

209  See supra section II.A. 



130 

b) Definitions (General Instruction A) 

We are proposing amendments to General Instruction A to update the existing definitions 

in Form N-4, add new definitions to accommodate the inclusion of RILAs on Form N-4, and 

implement these proposed definitions throughout the form. However, unless otherwise stated, the 

proposed amendments to the definitions in General Instruction A would not alter the existing 

obligations under Form N-4 for current issuers on Form N-4. These changes should provide a 

standard set of definitions to convey form provisions in a consistent and efficient manner without 

the need for lengthy descriptions in each instance and clarify which form provisions apply to 

which categories of issuers and investment products.210 

Specifically, we propose to add a new definition for “index-linked option.” The proposed 

definition covers RILAs and index-linked options offered in combination contracts, as an 

investment option offered under any contract, pursuant to which the value of the contract, either 

during an accumulation period or after annuitization, or both, will earn positive or negative 

interest based, in part, on the performance of a specified index.211 This is a functional definition 

focused on the key features of a RILA and would cover RILAs as defined in the RILA Act. We 

also propose to define “fixed option” as an investment option under the contract pursuant to 

which the value of the contract, either during an accumulation period or after annuitization, or 

both, will earn interest at a rate specified by the insurance company, subject to a minimum 

guaranteed rate under the contract. Further, we would change the existing definition of “variable 

annuity contract” to “variable option” and move the parts of that definition that refer to annuity 

 

210  We are also proposing to amend Form N-4 throughout to use the gender-neutral reference of “investor” 
where appropriate. See, e.g., proposed Instruction 6 to Item 2 of Form N-4. 

211  Because RILA returns may not be one for one with the index, we propose to indicate that positive or 
negative interest is only based “in part” on the index’s performance. 



131 

contracts generally to a new definition for “contract.” In connection with the addition of other 

types of investment options on Form N-4, we are proposing to amend “portfolio company” to 

clarify that this term relates to the investment companies offered as investment options in 

contracts containing variable options. We also propose to add a new defined term “investment 

option” to refer collectively to any index-linked, variable, or fixed option. We propose to add 

these items to help clarify which provisions of amended Form N-4 apply to which types of 

annuities or investment options.  

Because an insurance company issuing a RILA is not acting as a depositor, we propose to 

change the definition of “depositor” to “insurance company.” The proposed definition refers to 

the insurance company that issues the contract, which company is subject to state supervision, 

and that the insurance company may also be the depositor or sponsor for a variable annuity 

separate account. We would also add a new definition of “registered separate account” defined as 

the separate account in which the contract participates with regard to any variable option offered 

under the contract, and refine the definition of “registrant” to mean either the registered separate 

account or insurance company, as applicable. These changes further help to clarify which 

provisions of the form apply to variable annuities and RILAs. 



132 

We also propose to add definitions of “index,”212 “contract adjustment,”213 and “crediting 

period”214 to refer to these RILA-centric concepts in the form and, in the case of “contract 

adjustment” and “crediting period,” help clarify when the relevant disclosures would be required. 

Lastly, we propose to eliminate the currently defined term “investor account.” Insurance 

companies typically do not use this term in their disclosure, and the more generalized concept of 

contract value, which also is designed to address the value of an investor’s investment, is 

intended to convey the characteristics of the broader scope of annuities that insurance companies 

could register on Form N-4 under the proposal. 

We also are proposing related amendments throughout Form N-4 to help implement the 

proposed new definitions. For example, we are proposing to clarify the applicability of certain 

variable annuity or Investment Company Act-specific disclosure to limit those requirements to 

“registered separate accounts” or “variable options” when appropriate.215 As another example, 

the form requires disclosure of the procedures to purchase an annuity contract including certain 

particularized information.216 We would apply this provision generally to all annuities including 

 

212  As proposed, “index” means any index, rate, or benchmark (such as a registered exchange-traded fund that 
tracks an index) used in the calculation of positive or negative interest credited to an index-linked option. 
See proposed General Instruction A to Form N-4. 

213  As proposed, “contract adjustment” means a positive or negative adjustment made to the value of the 
contract by the insurance company if amounts are withdrawn from an index-linked option or from the 
contract before the end of a specified period. This adjustment may be based on calculations using a 
predetermined formula, or a change in interest rates, or some other factor or benchmark. See id.  

214  As proposed, “crediting period” means the period of time over which an index’s performance is measured, 
subject to applicable limits on index gains and losses, to determine the amount of positive or negative 
interest that will be credited to an index-linked option at the end of the period. 

215  See, e.g., proposed Items 3, 7, 8, 24, 32, and 34(a) of Form N-4; see also proposed definitions for “class” 
(clarifying applies to all contracts) and “platform charge” (clarifying only applies if there is a variable 
option). 

216  See Item 11 of Form N-4. 



133 

RILAs, but are only requiring certain disclosures relating to the operation of accumulation units 

and sub-accounts to contracts with variable options as those elements are not utilized by RILAs. 

c) Rules 405, 480, 481, 483, and 484 

We are proposing amendments to rule 405 under the Securities Act to add the new 

defined terms “Form available solely to investment companies registered under the Investment 

Company Act of 1940” and “registered index-linked annuity” for purposes of Securities Act 

rules.  

Certain Securities Act rules apply only to registration statements that are prepared on a 

form available solely to a registered investment company or a business development company. 

These rules are 17 CFR 230.480 (“rule 480”), 17 CFR 230.481 (“rule 481”), 17 CFR 230.483 

(“rule 483”), and 17 CFR 230.484 (“rule 484”) under the Securities Act, and include forms such 

as Forms N-1A, N-2, N-3, N-4, N-5, and N-6. These rules prescribe requirements relating to: 

information given with the title of securities; information contained in registration statements; 

exhibits filed as part of the registration statement; and undertakings required with respect to 

requests for acceleration. 

By virtue of moving RILAs, which are not issued by a registered investment company, 

onto Form N-4, Form N-4 would be outside the scope of this description absent the proposed 

amendments. As such, the proposed new defined term “form available solely to investment 

companies registered under the Investment Company Act of 1940” would specify that these rules 

would continue to apply to registration statements filed on Form N-4. Specifically, we are 

proposing to amend rule 405 to state that “a form available solely to investment companies 

registered under the Investment Company Act of 1940” includes the form used to register the 

offering of securities of a registered index-linked annuity for purposes of the Securities Act of 

1933. By operation of this new term, RILA registration statements on Form N-4 would be 



134 

subject to rules 480, 481, 483, and 484.217 We propose to subject RILA registration statements to 

these rules to help facilitate a consistent application of Form N-4 requirements.  

We are also proposing to add a definition of “registered index-linked annuity” to rule 

405, which provides consistent definitions for select terms used throughout the Securities Act 

rules, to simplify references to RILAs in the proposed Securities Act rule amendments. 

Specifically, we would define “registered index-linked annuity” as an annuity or an option 

available under an annuity (1) that is deemed a security; (2) that is offered or sold in a registered 

offering; (3) that is issued by an insurance company that is the subject to the supervision of either 

the insurance commissioner or bank commissioner of any state or any agency or officer 

performing like functions as such commissioner; (4) that is not issued by an investment 

company; and (5) whose value, either during the accumulation period or after annuitization or 

both, will earn positive or negative interest based, in part, on the performance of any index, rate, 

or benchmark.  

Under the RILA Act, 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, (C) that is issued by an insurance company that is subject to the 

supervision of the insurance commissioner or bank commissioner of any State or any agency or 

officer performing like functions as such commission, (D) that is not issued by an investment 

company, and (E) the returns of which are based on the performance of a specified benchmark 

 

217  These rules currently apply to registration statements on Form N-4. Rule 480 prescribes requirements 
relating to information given with the title of securities. Rule 481 prescribes certain information to be 
required in the registration statement (e.g., certain legends to appear on the front and back cover pages of 
prospectuses). Rule 483 prescribes certain requirements relating to exhibits filed as part of the registration 
statement. Rule 484 prescribes certain required undertakings with respect to requests for acceleration under 
17 CFR 230.461 when certain arrangements exist with respect to indemnification of specified persons 
against liability under the Securities Act.  



135 

index or rate (or a registered exchange traded fund that seeks to track the performance of a 

specified benchmark index or rate) and 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.218 

The proposed definition in rule 405 differs in certain respects from this definition,  but covers all 

offerings that would be included in the RILA Act’s definition. These differences are intended to 

simplify the definition and use terminology that is consistent with other rules under the Securities 

Act. For example, the proposed definition clarifies that the insurance company is registering the 

offering of a RILA, rather than the RILA itself, with the Commission.219 As another example, 

the proposed definition in rule 405 does not include a reference to a “market value adjustment,” 

as the RILA Act’s definition does, because the RILA Act did not require that feature as a 

predicate for being a “RILA.”220 Since the presence of a market value adjustment does not factor 

into the assessment of whether a security is a RILA under the RILA Act’s definition, it is 

unnecessary to refer to this feature in the proposed definition in rule 405. The proposed 

definition, however, continues to encompass the full scope of the RILA Act’s definition.  

d) Exhibits and Undertakings (Items 27 and 34) 

As a function of moving RILAs onto Form N-4 and subjecting them to the requirements 

of rule 483, RILA issuers would be required to file various exhibits as part of a registration 

statement, similar to the requirements these issuers are subject to when registering RILA 

 

218  See Pub. L. 117-328; 136 Stat. 4459 (Dec. 29, 2022). 
219  This is functionally the same as the requirement of the RILA Act that the RILA “be registered with the 

Commission in accordance with section 5 of the Securities Act of 1933.” See section 101(a)(5) of Division 
AA, Title I of the Consolidated Appropriations Act, 2023. 

220  See Pub. L. 117-328; 136 Stat. 4459 (Dec. 29, 2022) (defining RILA as an annuity, among other things, the 
returns of which may be subject to a market value adjustment if amounts are withdrawn before the end of a 
period in which that market value adjustment is applied) (emphasis added). 



136 

offerings on Forms S-1 and S-3 currently.221 Further, in addition to the requirements of rule 484, 

we are proposing to amend Item 34 of Form N-4 to include certain undertakings currently 

required of RILAs as part of their Form S-1 and S-3 registration statements.222  

Item 27 - Exhibits 

RILA issuers are currently subject to the integrated disclosure requirements of Regulation 

S-K when registering their offerings, which provide requirements for exhibits that must be filed 

as part of the registration statement.223 Conversely, issuers on Form N-4 are required to file the 

exhibits required by rule 483 and Item 27 of Form N-4. To provide consistent requirements for 

Form N-4 issuers, we are proposing amendments to require RILA issuers to adhere to the same 

requirements as current issuers on Form N-4. RILA issuers and current Form N-4 issuers are 

subject to somewhat different provisions for filing exhibits to a registration statement. However, 

there are significant similarities between the types of the exhibits that each type of issuer is 

required to file, and thus we generally are not proposing to change those requirements. RILA 

registration statements will therefore continue to include the types of exhibits currently included 

in their registration statements on Forms S-1 and S-3. For example, RILA issuers filing on Form 

N-4 would continue to be required to file such exhibits as the insurance company’s certificate of 

incorporation and by-laws, forms of contracts offered in connection with the registration 

 

221  See Item 16 of Form S-1; Item 16 of Form S-3; Item 601 of Regulation S-K. 
222  The disclosure currently required in Item 34, the fee representation mandated of registered separate 

accounts under the Investment Company Act, would be retained as paragraph (a) of this item, limited in 
application to variable options, and the new undertakings added as new paragraph (b) and limited to index-
linked options. See also 15 USC 80a-26(f)(2)(A). We would also rename this item “Fee Representation and 
Undertakings.” 

223  See 17 CFR 229.601. 



137 

statement, underwriting agreements, legal opinions, and other material contracts, as 

applicable.224  

We are not, however, proposing to amend Item 27 of Form N-4 to include required 

exhibits under Regulation S-K that are generally not applicable to RILAs or would no longer be 

relevant in light of the proposed amendments.225 For example, RILA registration statements are 

currently required to include a filing fee exhibit. Under the proposed amendments, RILA issuers 

would no longer include registration fee payments as part a registration statement or post-

effective amendment filing. Therefore, the proposed amendments to Item 27 of Form N-4 omit 

this existing exhibit requirement for RILAs.226  

We are, however, proposing to amend Form N-4’s required exhibits list to add new Item 

27(p) for all issuers, which would require the filing of any power of attorney included pursuant 

to rule 483(b).227 While this exhibit is already required to be filed with a Form N-4 registration 

statement under rule 483(b), practices differ in regards to the placement of a required power of 

attorney exhibit within the exhibit list. This amendment is designed to assist the public in 

comparing these exhibits by standardizing their location in the registration statement. In addition, 

we are proposing conforming changes in Item 27 to reflect the proposed amendments to the 

definitions in Form N-4.  

 

224  See 17 CFR 229.601; proposed Item 27 of Form N-4.  
225  See 17 CFR 229.601; proposed Item 27 of Form N-4. For example, some items, like Item 601(b)(96) of 

Regulation S-K which requires a technical report summary to be filed as an exhibit to a registration 
statement on Form S-1 when a registrant discloses information concerning its mineral resources, are wholly 
inapplicable to RILAs. 

226  See 17 CFR 229.601(b)(107). 
227  RILA registration statements on Forms S-1 and S-3 similarly include a power of attorney, when applicable, 

to be filed as part of the registrations statement. See 17 CFR 229.601(b)(24). See also supra section II.D 
(discussing the addition of a new exhibit relating to changes in accountants). 



138 

Item 34 – Fee Representation and Undertakings 

We are also proposing amendments to Item 34 of Form N-4 to require RILA issuers to 

include specific undertakings in their registration statements on Form N-4. Under the proposed 

amendments, a RILA issuer would be required to furnish two undertakings as part of the 

registration statement on Form N-4. These undertakings are (1) to file, during any period in 

which offers or sales are being made, through a post-effective amendment to its registration 

statement, any prospectus required by section 10(a)(3) of the Securities Act and (2) that, for the 

purposes of determining liability under the Securities Act, each post-effective amendment shall 

be deemed to be a new registration statement relating to the securities offered therein, and the 

offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. 

These proposed undertakings are the same as two undertakings RILA issuers currently provide in 

registration statements,228 and mirror the effect of similar provisions of section 24(e) of the 

Investment Company Act, which applies to amendments to Form N-4 registration statements by 

registered separate accounts.229 We are proposing that RILA issuers continue to furnish these 

representations concerning post-effective amendments to a registration statement as, under the 

 

228  See rule 415(a)(3) and 17 CFR 229.512(a). Under the proposed amendments, RILAs would be exempt from 
the conditions of rule 415, including furnishing the required undertakings pursuant to Item 512(a) of 
Regulation S-K. See infra footnote 331. For example, RILA registration statements would no longer be 
required to include a statement that the issuer undertakes to file a post-effective amendment to reflect in the 
prospectus any facts or events arising after the effective date of the registration statement (or the most 
recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental 
change in the information set forth in the registration statement. We preliminarily believe this requirement 
is not necessary for RILA registration statements on Form N-4 in light of the other amendments we are 
making to the prospectus and registration statement filing process for RILAs. See infra section II.E 
(discussing proposed amendments to rules 485 and 497 under the Securities Act). 

229  See Section 24(e) of the Investment Company Act [15 U.S.C. 80a-24(e)]. Section 24(e) generally requires a 
registered separate account to amend its registration statement annually to update its prospectus for the 
purposes of section 10(a)(3). Section 24(e) also provides that, for the purposes of liability under Securities 
Act, the effective date of the latest amendment is deemed to be the effective date of the registration 
statement with respect to securities sold after the effectiveness of amendment. 



139 

proposed amendments, RILAs may be continuously offered on a registration statement for an 

indefinite amount of time. In that time, a RILA registration statement may be subject to a number 

of various post-effective amendments. Conversely, the proposed amendments do not include 

other undertakings which may be currently required in RILA registration statements. These 

undertakings relate to the process for conducting continuous offerings under rule 415, which 

RILAs will no longer be subject to under the proposed amendments. In addition, we are not 

including other undertakings that are unnecessary in light of the proposed amendments as a 

whole.230 For example, RILA issuers currently are required to include an undertaking to remove 

from registration any of the securities being registered that remain unsold at the termination of an 

offering through a post-effective amendment.231 However, under the proposed amendments, 

RILA issuers will be registering an indeterminate amount of securities and paying registration 

fee payments in arrears on amended Form 24F-2 for the life of an offering. Under this approach, 

a RILA issuer would only pay registration fees on the exact amount of net issuance of securities 

relating to an offering and therefore, it is unnecessary to additionally require an undertaking that 

relates to a surplus registration of securities during an offering.  

e) Request for Comment 

We request comment on these proposed amendments. 

78. Are the instructions for the proposed new section on the facing sheet appropriate? 

Should there be additional or different options for the proposed new section on the 

facing sheet? 

 

230  See 17 CFR 229.512(a).  
231  See 17 CFR 229.512(a)(3). 



140 

79. Are the definitions in Part A of the General Instructions of Form N-4 appropriate? 

If not, which definitions require additional clarity or modifications? For example, 

do commenters believe it is appropriate to use the collective term “registrant” to 

include insurance companies that may not be registered entities under the 

Securities Act? Do the definitions effectively convey which provisions apply to 

which type of annuity contract?  

80. Do commenters agree with the statement that “investor account” is not generally 

used in insurance company disclosures to investors relating to annuity contracts?  

81. Did we appropriately scope those provisions that practically only apply to variable 

options to those types of investment options? Are there any other disclosures we 

should limit to variable options? Conversely, are there provisions we limited to 

variable options that we should also apply to index-linked options? 

82. Should we add any additional definitions to Part A of the General Instructions to 

Form N-4? Should we retain the term “investor account”? 

83. Is the definition of “Index-Linked Option” appropriate? Should we revise the 

definition in any way? Does this definition encompass all potential RILAs and 

index-linked options offered in combination contracts as proposed as required by 

the RILA Act? 

84. Do commenters agree that the proposed definition of “registered index-linked 

annuity” in rule 405 is appropriate? Do commenters agree that the proposed 

definition is inclusive of the types of RILAs encompassed in the definition of 

“registered index-linked annuity” in the RILA Act?141 

85. Do commenters agree that with the proposed definition of “Form available solely 

to investment companies registered under the Investment Company Act of 1940?” 

Do commenters think this may cause confusion as RILA issuers are not investment 

companies registered under the Investment Company Act? 

86. Should we require RILA issuers to adhere to rules 480, 481, 483, and 484 when 

registering RILAs on Form N-4? 

87. Do commenters agree that the Exhibit List for proposed Form N-4 encompasses 

the types of exhibits that RILA issuers currently include in registration statements 

and is appropriate for RILAs? If not, what exhibit requirements should govern 

RILAs registered on Form N-4? Are there additional exhibits that RILA issuers 

should be required to file as part of their registration statements on Form N-4? Are 

there any exhibits that the integrated disclosure requirements of Regulation S-K 

currently include that we should require on Form N-4? 

88. Is it appropriate to require RILA issuers to furnish the undertakings in Item 34 of 

proposed Form N-4? Are there different or additional undertakings that should be 

required for these issuers?  

8. Remaining Form N-4 Items 

We propose to make applicable to RILAs the remaining requirements and disclosure 

items on the existing Form N-4 discussed below, which we do not propose to substantively 

change.232 The general instructions to the proposed form include both organizational 

requirements along with substantive requirements for the preparation of the registration 

 

232  As noted above, some of these items would be amended to account for changes in defined terms and to use 
gender-neutral terminology. See supra section II.B.7. 



142 

statement, including instructions relating to the organization, presentation, and prospectuses 

permitted to be included in a registration statement. The remaining disclosure items principally 

provide investors with information about the annuity contract and how it operates. In addition, 

these items provide basic information about the insurance company or the securities offering 

itself, consistent with some of the disclosures provided currently in Forms S-1 or S-3. 

a) General Instructions 

RILAs offerings registered on Form N-4 will need to comply with the general 

instructions of that form. These general instructions are structured to include four parts: (A) 

Definitions;233 (B) Filing and Use of Form; (C) Preparation of the Registration Statement; and 

(D) Incorporation by Reference.234 This would result in a number of substantive outcomes for 

those issuers.235 Specifically: 

• Plain English. The instructions provide a number of points to issuers on how best to 

promote effective communication between issuers and prospective investors. For 

example, issuers are directed to use document design techniques that promote 

effective communication and to respond to the items in the form as simply and 

directly as reasonably possible and avoid the use of formulas as the primary means of 

 

233  See supra section II.B.7(b) (discussing proposed amendments to the definitions used in the form). 
234  The items described in this section can generally be found in proposed General Instruction C of Form N-4. 

See also supra section II.B.[Other Amendments] (discussing definitional updates). EDGAR permits 
registrants to file required financial statements separately under a specific submission type. Thus, 
registrants may incorporate by reference into their post-effective amendment and other filings the financial 
statements filed under this EDGAR submission type. See VASP Adopting Release at n.592. 

235  We are also proposing to correct a typographical error in General Instruction B.2(b) regarding items that 
can be omitted for registration statements or amendments filed only under the Investment Company Act. 
Currently, the instructions state that issuers can omit from Part C Items 26(c), (k), (l), and (m), but those 
items do not exist in the form and Item 26 (Financial Statements) is in the SAI, not Part C. This is supposed 
to refer to Item 27 (Exhibits), which do exist, are in Part C, and are more Securities Act in nature. This 
instruction would be updated to refer instead to Item 27 as a result. 



143 

communicating certain terms or features of a contract.236 Issuers are also encouraged 

to use, as appropriate, Q&A formats beyond the KIT, tables, and other presentation 

methods in the form generally.237 

• Organization. Issuers are directed to organize information in the prospectus and SAI 

to make it easy for investors to understand, with some limitations on the order of 

presentation.238  

• Other information. Issuers are permitted to include (other than in Items 2 or 3) 

information in the prospectus or SAI not otherwise required as long as the additional 

information is not incomplete, inaccurate, or misleading and does not, because of its 

nature, quantity, or manner of presentation, obscure, or impede understanding of the 

information that is required. 239 In similar circumstances, issuers may include sales 

literature in the prospectus.240 

• Terminology. Issuers are required to define special terms used in the prospectus in 

any presentation that clearly conveys meaning to investors.241 Only these special 

terms must be defined or listed in any glossary or list of definitions elected to be 

used.242 Registrants are not required to use the same terminology as that used in the 

 

236  See proposed General Instructions C.1.(a) and (c) to Form N-4. This specific text is not intended to 
discourage use of a formula, but rather, to clarify that if a formula is used in connection with a term or 
feature, investors are first provided appropriate plain English disclosure regarding the operation of the term 
or feature. See VASP Adopting Release at n.591. 

237  See proposed General Instruction C.3.(c) to Form N-4. As discussed above, we are proposing to require 
Q&A formatted responses to the Key Information Table. See supra section II.B.2. 

238  See proposed General Instruction C.3.(b) to Form N-4. 
239  See proposed General Instruction C.3.(b) to Form N-4. 
240  See proposed General Instruction C.3.(g) to Form N-4. 
241  See proposed General Instruction C.3.(d) to Form N-4. 
242  Registrants are also permitted to define terminology only used in one section in such section.  



144 

form as long as the registrant clearly conveys the meaning of, or provides comparable 

information as, the form’s terminology. 

• Multiple Contracts. Issuers are permitted to describe multiple contracts that are 

essentially identical in a single prospectus, and the instructions discuss the 

presentation of information regarding multiple contracts in these circumstances.243 

Further, issuers are permitted to combine multiple prospectuses into a single 

registration statement where the contracts are substantially similar. 

• Timing. The instructions state that, consistent with Securities Act rules, in most 

circumstances prospectuses and SAIs used after the effective date of the registration 

statement shall be dated approximately as of such effective date, but that a revised or 

amended prospectus or SAI used thereafter need only bear the approximate date of its 

issuance. Each supplement to the prospectus or SAI shall be dated separately the 

approximate date of its first use.244 

• Provision of Websites. Any websites included in an electronic version of the 

prospectus must include active hyperlinks or other means of facilitating access that 

leads directly to the relevant website address, though this requirement does not apply 

to a prospectus filed on EDGAR.245 

• Incorporation by Reference. In addition to the general requirements of the 

Commission rules on incorporation by reference, issuers are not permitted to 

 

243  See proposed General Instruction C.3.(e) to Form N-4. The instructions state that “essentially identical” is a 
facts and circumstances-based determination but that contracts that differ in providing optional benefits or 
being group or individual contracts are not essentially identical whereas variances due only to State 
regulatory requirements would be. 

244  See proposed General Instruction C.3.(f) to Form N-4; 17 CFR 230.423. 
245  See proposed General Instruction C.3.(i) to Form N-4. 



145 

incorporate by reference information required to be in the prospectus unless otherwise 

permitted by the form, but may incorporate by reference the SAI into the prospectus 

without delivering the SAI and incorporate by reference information required to be 

included in the SAI or Part C.246 

Collectively, these general instructions are designed to require clear disclosure to 

investors about the variable annuity contracts currently registered on the form and to make clear 

how issuers must prepare and file their registration statements. Requiring RILA issuers to 

prepare their registration statements in accordance with these instructions would likewise 

facilitate the provision of clear disclosure to investors and provide clear direction to these issuers 

on how to prepare and file their registration statements. Further, applying these requirements to 

RILAs as proposed would help ensure the comparability of different annuity offerings, for 

example, by ensuring that the filings are held to the same plain English, multiple contract 

disclosure, timing, website, and incorporation by reference standards. 

b) Contract Disclosures 

The table below summarizes disclosures in the existing Form N-4 about the annuity 

contract, how it operates, and how it is serviced by the insurance company, that we propose 

making applicable to RILA issuers without substantive change.  

Table 4: Contract Disclosures 

Item Description 

Prospectus (Part A) 

 

246  Proposed General Instruction D of Form N-4. 



146 

Item Description 

General Description 
of the Contracts (Item 
8) 

A general description of the contract, including disclosure of the 
parties’ material rights under the contract; relevant contract provisions 
and limitations; contract obligations funded by the insurance 
company’s general account; class of purchasers, and material changes 
that can be made to the contract by the insurance company. 

Annuity Period (Item 
9) 

A description of the annuity options available, including a discussion 
of material factors that determine the benefits; annuity commencement 
date; frequency and duration of annuity payments; the effect of 
assumed investment return; any minimum amount necessary for an 
annuity option and the consequences of an insufficient amount; rights 
to change annuity options; and, if applicable, a disclosure that the 
investor will be unable to withdraw any contract value amounts after 
the annuity commencement date. 

Benefits Available 
Under the Contract 
(Item 10) 

A tabular summary overview of the benefits available under the 
contract (e.g., standard or optional death benefits, standard or optional 
living benefits, etc.), briefly discussing, among other things: whether 
the benefit is optional; current and maximum fees associated with the 
benefit; how the benefit amount is calculated; and any associated 
restrictions or limitations.  

Purchases and 
Contract Value (Item 
11) 

A description of the procedures for purchasing a contract, including 
concise explanations of minimum initial and subsequent purchase 
payment required, when these payments are credited, and how they 
are allocated to investment options. Also an identification of the 
principal underwriters (other than the insurance company) of the 
contracts and other information about that underwriter such as any 
affiliations. 

Surrenders and 
Withdrawals (Item 
12) 

A description of how surrenders and withdrawals can be made from a 
contract, including limits on the ability to surrender, how proceeds are 
calculated, and when surrenders and withdrawals are payable. Issuers 
must also describe potential effect of surrenders and withdrawals, 
including how they could affect a contract’s value or benefits, and 
whether any charges or contract adjustments will apply. Issuers should 
also describe any involuntary redemption provisions and any 
revocation rights, disclosing the calculation methodology and any 
associated limitations to investment options. 

Loans (Item 13) A description of the loan provisions of the contract, including, for 
example, loan availability and related restrictions, interest mechanics, 
the effect of a loan on the contract’s value and death benefit, other 
effects that a loan could have on a contract; and loan procedures. 



147 

Item Description 

Taxes (Item 14) A description of the material tax consequences to the investor and 
beneficiary of buying, holding, exchanging, or exercising rights under 
the contract. The description should include a discussion of the 
taxation of annuity payments, death benefit proceeds, periodic and 
non-periodic withdrawals, loans, and any other distribution that may 
be received under the contact, as well as the tax benefits accorded the 
contract and other material tax consequences. Issuers must identify the 
types of qualified plans for which the contracts are intended to be used 
and describe any effect of taxation on the determination of contract 
values. 

Statement of Additional Information (Part B) 
Cover Page and 
Table of Contents 
(Item 18) 

A statement of the name of the insurance company, the contract, and 
related class or classes. This item also requires a table of contents, a 
statement that the SAI is not a prospectus, information about how to 
obtain the prospectus, and a discussion of information the SAI 
incorporates by reference. 

Non-principal Risks 
of Investing in the 
Contract (Item 20) 

A summary of the non-principal risks of purchasing a contract not 
otherwise disclosed in the prospectus. 

Services (Item 21) Information on services provided to the registrant in connection with 
the contract. If not disclosed elsewhere, this requires a summary of the 
substantive provisions of certain management-related service 
contracts. The registrant must also provide the name and address of its 
independent public accountant. Where affiliates of the insurance 
company act as agents for the registrant in connection with the 
contract, issuers are required to provide specific information about the 
services performed and remuneration paid for the services. Issuers 
must also disclose if the insurance company is the principal 
underwriter of the contract. 

Annuity Payments 
(Item 25) 

A description of the method for determining the amount of annuity 
payments if not described in the prospectus and how any change in the 
amount of a payment after the first payment is determined. 

Other Information (Part C) 
Management Services 
(Item 33) 
 

A summary of the substantive provisions of any management-related 
service contracts not discussed in Parts A or B, including the last three 
years’ payment history.  

These requirements apply to existing Form N-4 issuers because these disclosures provide 

investors in these products with a concise presentation of material information about the annuity 

contract they would be purchasing, as well as other information that provides necessary context 



148 

about the contracts such as management service disclosures.247 Because disclosure of this 

information is equally fundamental to the ability of investors to make informed investment 

decisions about RILA contracts, we are proposing to apply these requirements to RILAs. For 

example, existing Form N-4 issuers are required to summarize standard and optional benefits 

available to the investor under the contract because these benefits are primary features of 

variable contracts and are also often key differentiators between competing products.248 

Insurance companies also offer these benefits in connection with RILAs.  

c) Issuer and Offering Disclosures 

In addition to disclosures about the contract, the proposed amendments to Form N-4 

would require that RILA issuers make certain disclosures relating to the issuer and offering 

consistent with the form’s current requirements. The table below summarizes these items, 

omitting items in Form N-4 that, by their terms, would not apply to RILAs. 

Table 5: Issuer and Offering Disclosures 

Item Description Similar Form S-1 
Disclosure 

Prospectus (Part A) 
Legal Proceedings 
(Item 15) 

A description of material pending legal 
proceedings to which the registered separate 
account, the principal underwriter, or the 
insurance company is a party, including similar 
information regarding any proceedings instituted 
or known to be contemplated by a governmental 
authority. 

Item 11(c) (legal 
proceedings) 

Statement of Additional Information (Part B) 

 

247  See Registration Forms for Insurance Company Separate Accounts That Offer Variable Annuity Contracts, 
Investment Company Act Release No. 14575 (June 24, 1985) [50 FR 26145 (June 25, 1985)] (“Forms N-3 
and N-4 Adopting Release”). 

248  See VASP Adopting Release at n.26 and accompanying text. 



149 

Item Description Similar Form S-1 
Disclosure 

General 
Information and 
History (Item 19) 

Basic information regarding the background and 
organization of the insurance company, including 
the jurisdiction in which it is organized and a 
description of its business. 

Item 11(a) 
(description of 
business) 

Underwriters (Item 
23) 

Identification of the principal underwriters (other 
than the insurance company), and for affiliated 
underwriters, a description of the nature of the 
affiliation. For each principal underwriter 
distributing the registrants’ contracts, the 
insurance company must provide information 
about the offering and related commissions. If the 
registrant made payments to an underwriter of or 
dealer in the contracts during its last fiscal year 
over a threshold amount, the registrant must 
disclose certain information about those 
payments. 

Item 8 (plan of 
distribution) 

Other Information (Part C) 
Directors and 
Officers of the 
Insurance 
Company (Item 28) 

A statement of the name, principal business 
address, position, and office held for each 
director or officer of the insurance company. 

Item 11(k) 
(directors and 
executive officers) 

Persons Controlled 
by or Under 
Common Control 
with the Insurance 
Company or the 
Registrant (Item 
29) 

Disclosure of persons directly or indirectly 
controlled by or under common control with the 
registrant or the sponsoring insurance company. 

Item 11(k) 
(directors and 
executive officers) 

Indemnification 
(Item 30) 

Information about the effect of relevant 
indemnification agreements, arrangements, or 
statutory provisions through which underwriters 
or affiliates are insured or indemnified against 
any liability incurred in their official capacity.  

Item 14 
(indemnification of 
directors and 
officers) 

Principal 
Underwriters (Item 
31) 

A statement of investment companies, other than 
any registered separate account related to the 
filing, each principal underwriter is also acting as 
a principal underwriter. More detailed 
information about principal underwriters 
identified in Item 23, such as recent information 
about commissions and other compensation 
received from the registrant by each principal 
underwriter. 

Item 8 (plan of 
distribution) 

 



150 

Information about the issuer and the offering process are relevant when purchasing an 

annuity contract, including in the context of a RILA.249 These items, which largely correspond to 

items currently required to be disclosed by RILAs on Forms S-1 and S-3 as detailed in the table 

above, provide the appropriate amount of information about the issuing insurance company and 

the offering of securities in a way tailored to annuity contract investors. For example, because an 

investor’s rights under RILAs are dependent on the insurance company’s claim-paying ability, 

RILA purchasers also share an interest in disclosures of material pending legal proceedings 

involving the insurance company or related parties. On the other hand, where Form S-1 

disclosures have less relevance to RILAs, we have not included those disclosures in proposed 

Form N-4. 

d) Request for Comment 

We request comment on our proposed application of these requirements and disclosures 

to RILAs.  

89. Is it appropriate to require RILA issuers to meet these general instructions of the 

form? Should we tailor any particular provision to account for the differences 

between RILAs and the variable annuities that currently use the form? For 

example, is there any reason to treat RILAs different for purposes of the 

“essentially identical” test? 

90. The investor testing results suggested that investors had significant difficulty in 

understanding certain terminology used in connection with RILAs, in particular the 

words “term” and “investment term.”250 Should we, as a result, change any 

 

249  See Forms N-3 and N-4 Adopting Release. 
250  See OIAD Report at Section 7, Conclusions, Summary of Findings. 



151 

instruction to aid in investor understanding? For example, the form currently 

provides that the prospectus disclosure requirements in Form N-4 are intended to 

elicit information for an average or typical investor who may not be sophisticated 

in legal or financial matters.251 In light of this feedback in investor testing, should 

we amend this instruction or otherwise provide that insurance companies should 

not use “term,” “investment term,” or other terminology that investors found 

confusing? Regardless of whether insurance companies use “investment term” or 

different terminology, in the glossary definition of the “investment term” (or 

another term to describe that concept) should insurance companies be required to 

specifically disclose to investors that the “investment term” is not the same as the 

life of the contract? As another example, should we require, rather than permit, the 

use of a glossary or list of definitions for the entirety of the form so that investors 

have one place to look to understand a particular term? Should we clarify what 

terms are “special terms”? What terminology in particular should be considered a 

special term in the RILA context?  

91. Should we define certain key terms that insurance companies must use in their 

registration statement to help to mitigate investor confusion and help investors 

compare one RILA to another? Which key terms should we address and how 

should they be defined?  

 

251  See Instruction C.1.b of Form N-4. 



152 

92. Is it appropriate, as proposed, to apply these exiting Form N-4 disclosure 

requirements to RILA issuers? Are any of these disclosure items inappropriate for 

including in a RILA registration? 

93. Are there other details about the RILA contract, not otherwise addressed above, 

that we should require be disclosed on amended Form N-4? Are there details 

regarding the issuer or offering that we should require? 

94. Certain of these disclosures are repeated throughout the registration statement. For 

example, similar disclosures regarding principal underwriters are contained in the 

prospectus (Item 11) and SAI (Item 23). Should we limit these items to a particular 

location in the registration statement? 

95. Under the proposal, certain information that RILA issuers currently provide on 

Forms S-1 and S-3 would still be required by Form N-4, but would be placed in the 

SAI rather than the prospectus. Should any of the information we propose to 

require in the SAI instead be provided in the prospectus? 

96. Are these items properly ordered? Should we move any of these items to greater 

prominence or move items from the prospectus, SAI, or Part C to another part of 

the registration statement?  

9. Inline XBRL 

We are proposing to require RILA issuers to tag certain of the information they would 

disclose in their prospectuses and SAIs in a structured, machine-readable data language. 

Specifically, we are proposing to require RILA issuers to tag the required information in Inline 

XBRL in accordance with Rule 405 of Regulation S-T (17 CFR 232.405) and the EDGAR Filer 



153 

Manual.252 The proposed requirements for RILA issuers would include tagging of the overview 

and more in-depth descriptions of index-linked options and contract adjustments that RILA 

issuers would have to include in their prospectuses under the proposal, the proposed disclosure 

of census-type information regarding contracts with index-linked options, and information 

disclosed about changes in and disagreements with accountants.253 RILA issuers, in addition to 

variable contracts issuers whose contracts offer fixed options, would have to tag the proposed 

descriptions of fixed options available under the contract.254 Form N-4 filers also would have to 

tag the proposed new disclosures indicating that the insurance company is relying on the 

exemption provided by rule 12h-7, and variable contract issuers would have to tag the proposed 

new statement relating to the risks of variable options.255  

In addition, RILA issuers would have to tag those prospectus disclosures that Form N-4 

currently requires to be tagged.256 These include the following disclosure items: the Key 

Information Table, Fee Table, Principal Risks of Investing in the Contract, Other Benefits 

Available Under the Contract, and Investment Options Available Under the Contract in the 

statutory prospectus. The proposed Inline XBRL requirements, like the current Inline XBRL 

 

252  This proposed tagging requirements would be implemented by amending General Instruction C.3(h) of 
Form N-4, and by revising rule 405(b) of Regulation S-T to include the proposed RILA-specific 
disclosures. Pursuant to rule 301 of Regulation S-T, the EDGAR Filer Manual is incorporated by reference 
into the Commission’s rules. In conjunction with the EDGAR Filer Manual, Regulation S-T governs the 
electronic submission of documents filed with the Commission. Rule 405 of Regulation S-T specifically 
governs the scope and manner of disclosure tagging requirements for operating companies and investment 
companies, including the requirement in rule 405(a)(3) to use Inline XBRL as the specific structured data 
language to use for tagging the disclosures. 

253  See proposed General Instruction C.3(h) of Form N-4; see also proposed Items 2(b)(2), 2(d), 6(d), 7(e), 
26(c), and 31A. 

254  See proposed General Instruction C.3(h) of Form N-4; see also proposed Item 6(e). 
255  See proposed General Instruction C.3(h) of Form N-4; see also proposed Items 6(a) (instruction) and 

6(c)(1). 
256  See rule 405(b) of Regulation S-T; proposed General Instruction C.3(h) of Form N-4; see also proposed 

Items 3, 4, 5, 10, and 17. 



154 

requirements for Form N-4 issuers, would only apply to contracts being sold to new investors. 

The result of this proposed approach would be that prospectus disclosure for contracts that are no 

longer being sold to new investors would not need to be tagged, as we believe tagging this 

disclosure would have less utility for current investors and other market participants.257 Issuers 

of variable annuities registered on Form N-4 are currently required to tag certain registration 

statement disclosure items using Inline XBRL.258 These items are those that would be most 

suited to being tagged in a structured format and be of greatest utility for investors and other data 

users that seek structured data to analyze and compare RILA contracts. This rationale is the same 

as that which the Commission articulated in originally adopting these tagging requirements in the 

context of variable annuity disclosure.259 

In addition to these existing items, requiring Inline XBRL tagging of the new disclosure 

requirements we are proposing to include in Form N-4 would benefit investors, other market 

participants, and the Commission by making the disclosures more readily available and easily 

accessible for aggregation, comparison, filtering, and other analysis.260 We chose these particular 

items in the form to structure—including those that issuers of variable annuities would newly 

have to structure—because we believe that they are the most salient to investors and benefit most 

from being structured. We believe that tagging this disclosure, along with the requirement for 

 

257  See VASP Adopting Release at paragraph accompanying n.904. 
258  See General Instruction C.3(h) of current Form N-4; see also Interactive Data to Improve Financial 

Reporting, Release No. 33-9002 (Jan. 30, 2009) [74 FR 6776], as corrected by Release No. 33-9002A (Apr. 
1, 2009) [74 FR 15666] (requiring operating companies to submit financial statements accompanying their 
registration statements and periodic and current reports in XBRL). 

259  See VASP Adopting Release at section II.E. 
260  See supra footnotes 253-255. These primarily include the proposed new disclosure items that are specific to 

RILAs, as opposed to extant Form N-4 disclosure items to which we are proposing incremental 
amendments to address RILAs along with variable annuities. 



155 

RILA issuers to tag the same other disclosure items that are currently tagged, would result in 

information being tagged that would best permit investors and other data users to analyze and 

compare RILAs. For example, this would enable automated extraction and analysis of 

descriptions of index-linked options available under the contract, information regarding the 

features of each currently offered index-linked option, and information regarding contract 

adjustments. This would allow investors and other market participants more efficiently to 

perform large-scale analysis and comparison across RILAs (including the index-linked options 

that different RILAs offer) and time periods. Similarly, the requirement to tag information about 

fixed options will permit the same type of analysis with respect to these investment options—

including comparing fixed options across contracts, as well as index-linked options, variable 

options, and fixed options offered under the same contract.  

As another example, census-type information about variable annuity contracts, which is 

parallel to the SAI disclosure we propose to require for contracts with index-linked options, is 

currently reported in structured data format.261 Requiring census-type information about 

contracts with index-linked options to be tagged in Inline XBRL would help the Commission and 

staff identify trends in insurance companies’ offerings of the contracts, similar to the tools the 

Commission and staff currently have to identify trends in the offering of variable annuity 

contracts. An Inline XBRL requirement also would facilitate other analytical benefits, such as 

more easily extracting and searching disclosures about annuities, and automatically comparing 

these disclosures against prior periods. 

 

261  See supra section II.B.I.A.6; see also Item F.14 of Form N-CEN. 



156 

We are proposing to require RILA issuers to submit Interactive Data Files as follows, 

consistent with the approach for issuers of variable annuities registered on Form N-4:  

• For most post-effective amendments, Interactive Data Files would have to be filed 

either concurrently with the filing, or in a subsequent amendment that is filed on or before the 

date that the post-effective amendment that contains the related information becomes 

effective;262 

• For initial registration statements (and post-effective amendments other than as 

described in the bullet immediately above), Interactive Data Files would have to be filed in a 

subsequent amendment on or before the date the registration statement or post-effective 

amendment that contains the related information becomes effective;263 and  

• For any form of prospectus filed pursuant to rule 497(c) or (e), Interactive Data Files 

would have to be submitted concurrently with the filing.264  

We anticipate that this approach would facilitate the timely availability of important 

information in a structured format for investors, investment professionals, and other data users 

yielding substantial benefits. For data aggregators responding to investor demand for the data, 

the availability of the required disclosures in the Inline XBRL format concurrent with filing or 

before the date of effectiveness would allow them to quickly process and share the data and 

related analysis with investors.  

 

262  See proposed General Instruction C.3(h)(i)(B) of Form N-4. This instruction relates to post-effective 
amendments filed pursuant to paragraph (b)(1)(i), (ii), (v), (vi), or (vii) of rule 485. 

263  See proposed General Instruction C.3(h)(i)(A) of Form N-4. This instruction relates to initial registration 
statements and post-effective amendments other than those filed pursuant to paragraph (b)(1)(i), (ii), (v), 
(vi), or (vii) of rule 485. 

264  See proposed General Instruction C.3(h)(ii) of Form N-4. 



157 

Like other issuers, RILA issuers could request temporary and continuing hardship 

exemptions for the inability to timely file electronically the Interactive Data File.265 

Request for Comments 

We request comment generally on the proposed amendments to require the use of Inline 

XBRL, and specifically on the following issues: 

97. Should we adopt rules that make the submission of structured data in the Inline 

XBRL format mandatory for RILA issuers? 

98. Is it appropriate that RILA issuers would have to tag the same disclosure items that 

variable annuity issuers tag? Why or why not? If RILA issuers were to be required 

to tag other disclosure items that are also applicable to variable annuities, should 

variable annuity issuers also be required to tag these same items? 

99. Is it appropriate that all Form N-4 filers would have to tag certain of the new 

disclosure items that we are proposing to add to Form N-4, in particular, proposed 

Items 2(b)(2), 2(d), 6(a) (instruction), 6(c)(1), 6(d), 6(e), 7(e), 26(c), and 31A of 

Form N-4? Should insurance companies not be required to tag any of these items, 

and if so, why not? Are there other proposed disclosure items that we should also 

require insurance companies to tag? If so, why? 

100. Is it appropriate that the approach for RILA issuers to submit Interactive Data 

Files be consistent with the current approach for issuers of variable annuities 

registered on Form N-4, as proposed? If not, what alternative approach would be 

more appropriate and why? Is it appropriate that, like variable annuities registered 

 

265  See rule 201 Regulation S-T (temporary hardship exemption) and rule 202 of Regulation S-T (continuing 
hardship exemption). 



158 

on Form N-4, the proposed Inline XBRL requirements for RILA issuers would 

apply only to contracts being sold to new investors? Do commenters agree that 

tagging the prospectus disclosure would have less utility for current investors and 

other market participants? 

101. Are any other amendments necessary or appropriate to require the submission of 

the proposed required information in Inline XBRL? If so, what are they? 

C. Option to Use a Summary Prospectus 

We are proposing to amend rule 498A to permit RILA issuers, as well as issuers of 

“combination contracts” offering a combination of index-linked options and variable options, to 

use a summary prospectus to satisfy statutory prospectus delivery obligations.266 Investors would 

continue to have access to the RILA statutory prospectus and other information about the RILA 

contract online, with paper or electronic copies of this information upon request.267 This 

proposed approach would provide parity between RILA issuers and issuers of variable annuities 

 

266  Section 5(b)(2) of the Securities Act makes it unlawful to carry or cause to be carried a security for 
purposes of sale or for delivery after sale “unless accompanied or preceded” by a prospectus that meets the 
requirements of section 10(a) of the Act. See section 10(a) of the Securities Act (generally requiring a 
prospectus relating to a security to contain the information contained in the registration statement). For 
purposes of this release, a prospectus meeting the requirements of a section 10(a) prospectus is referred to 
as a “statutory prospectus.” For purposes of this section, we refer to RILA contracts and combination 
contracts together as “RILA contracts.” 

267  To further effectuate the changes being proposed, we propose to exclude RILA offerings from the 
provisions of rule 172, which provides that a final prospectus will be deemed to precede or accompany a 
security for sale for purposes of Securities Act section 5(b)(2) as long as the final prospectus meeting the 
requirements of Securities Act section 10(a) is filed or the issuer will make a good faith and reasonable 
effort to file it with the Commission as part of the registration statement within the required rule 424 
prospectus filing timeframe. Consistent with registered investment companies and business development 
companies, RILA offerings would be subject to a separate framework governing communications with 
investors under the proposal. See supra section II.E; see also Offering Reform Release at section VI.B.1.b. 



159 

registered on Form N-4, which are permitted to use summary prospectuses to satisfy their 

prospectus delivery obligations.  

RILA Summary Prospectus Overview 

The current summary prospectus rule for variable contracts uses a layered disclosure 

approach designed to provide investors directly with key information relating to the contract’s 

terms, benefits, and risks in a concise and reader-friendly presentation, with more detailed 

information available elsewhere. We anticipate that the summary prospectus framework would 

improve investor understanding of RILA contracts, as the Commission similarly expressed when 

it adopted the summary prospectus rule for variable contracts.268 This proposed approach for 

RILA contracts builds on the Commission’s decades of experience with layered disclosure and 

rules permitting the use of summary prospectuses.269 The proposal also recognizes investors’ 

expressed preferences for concise and engaging disclosure of key information. Accordingly, we 

believe the proposed approach is consistent with the RILA Act’s mandate of designing 

 

268  See VASP Adopting Release at n.21 and accompanying text. 
269  See id.; see also Enhanced Disclosure and New Prospectus Delivery Option for Registered Open-End 

Management Investment Companies, Investment Company Act Release No. 28584 (Jan. 13, 2009) [74 FR 
4545 (Jan. 26, 2009)] (“2009 Summary Prospectus Adopting Release”); Tailored Shareholder Reports for 
Mutual Funds and Exchange-Traded Funds; Fee Information in Investment Company Advertisements, 
Investment Company Act Release No. 34731 (Oct. 26, 2022) [87 FR 72758 (Nov. 25, 2022)] (“Tailored 
Shareholder Reports Adopting Release”) (adopting rules incorporating a layered disclosure approach to 
open-end funds’ annual and semi-annual reports to shareholders). 



160 

disclosure requirements “with the goal of ensuring that key information is conveyed in terms that 

a purchaser is able to understand.”270 

The proposed amendments to rule 498A would broaden the scope of the rule to address 

RILA contracts.271 Under the proposed amendments, the rule’s conditions for relying on the rule 

to satisfy prospectus delivery obligations would be the same for RILA contracts as for variable 

contracts.272 These conditions include the requirements to send or give a summary prospectus to 

an investor no later than the time of the “carrying or delivery” of the contract security, as well as: 

(1) requirements for the contents that must be included in a summary prospectus, (2) limitations 

on binding a summary prospectus with other materials, and (3) requirements that the summary 

prospectus, statutory prospectus, and contract statement of additional information must be 

publicly accessible, free of charge, on a website in the manner that the rule specifies.  

The proposed amendments to rule 498A would involve the use of two distinct types of 

summary prospectuses for RILA contracts, employing the same approach the rule currently uses 

 

270  See VASP Adopting Release at n.20 and accompanying text; Tailored Shareholder Reports Adopting 
Release at nn.10, 11, and 29 and accompanying text; see also supra discussion following footnote 7. 

271  To facilitate this change, and to make the terminology used in rule 498A more consistent with certain terms 
used in the proposed amendments to Form N-4, we are also proposing a number of amendments to the 
rule’s definitions. Specifically, we would (1) amend the definitions to “Class,” “Contract,” Investment 
Option,” “Registrant,” “Variable Annuity Contract,” and “Variable Life Insurance Contract” to address 
RILA contracts, and/or to make changes to these definitions that correspond with amendments to certain 
definitions in Form N-4 (either definitions of these same terms in Form N-4, or definitions of other terms in 
Form N-4 that would otherwise affect the way these terms are defined in rule 498A); (2) add definitions for 
“Fixed Option,” “Index-Linked Option,” “Insurance Company,” “Registered Separate Account,” “RILA 
Contract,” and “Variable Option” consistent with their counterparts in the proposed Form N-4 
amendments; and (3) deleting the definition of “Depositor.” These changes are necessary to communicate 
the provisions of the rule that would be applicable to RILA and combination contracts. 

272  See proposed rule 498A(f). Rule 498A also provides that a communication relating to an offering registered 
on Form N-4 that a person sends or gives after the effective date of the registration statement (other than a 
prospectus that Section 10 of the Securities Act permits or requires) will not be deemed a prospectus under 
section 2(a)(10) of the Securities Act, under certain conditions. The proposed amendments to rule 498A 
would extend this provision to RILA contracts. See rule 498A(g). Under the proposed amendments, the rule 
498A provision addressing information that may be incorporated by reference into a summary prospectus 
also would apply the same to RILAs as it does to other contracts currently within the scope of the rule. See 
rule 498A(d).161 

for variable contracts. An “initial summary prospectus,” covering contracts offered to new 

investors, would include certain key information about the contract’s most salient features, 

benefits, and risks, presented in plain English in a standardized order. The rule amendments 

would also require “updating summary prospectuses” to be provided to existing investors in 

RILA contracts as a condition to relying on the rule. The updating summary prospectus would 

include a brief description of certain changes to the contract that occurred during the previous 

year, as well as a subset of the information required to appear in the initial summary prospectus. 

Certain key information about the index-linked options that the contract offers would be 

provided in both the initial summary prospectus and updating summary prospectus.273  

As under current rule 498A for variable contracts, the proposed use of summary 

prospectuses for RILA contracts would be voluntary. This would be appropriate to provide RILA 

issuers sufficient time to transition to a summary prospectus regime, as well as in recognition of 

the fact that there could be different relative benefits of using a summary prospectus for certain 

RILA issuers and investors in these contracts.274 Similar considerations informed the 

Commission’s decision to adopt a voluntary summary prospectus regime for variable 

contracts.275 

 

273  This proposed approach is consistent with the approach for information about variable options in variable 
contracts’ summary prospectuses, in which certain key information about the portfolio companies offered 
as variable options appears in both the initial summary prospectus and updating summary prospectus. See 
proposed rule 498A(b)(5)(ix); proposed rule 498A(c)(6)(iv). 

274  The Commission similarly discussed the relative benefits to variable contract issuers of using a summary 
prospectus, based on the types of products that these issuers offer and the length of their current 
prospectuses, as well as the benefit of more concise disclosure to investors, in adopting rule 498A. See, 
e.g., VASP Adopting Release at section IV.E.1 (discussion in the Economic Analysis section of the release, 
addressing the Commission’s consideration of mandating summary prospectuses for variable contracts). 

275  See VASP Adopting Release at discussion accompanying nn.41-45; see also infra section III.C.1.c 
(discussing that different issuers and investors could expect to benefit differently from this optional 
prospectus delivery regime, although we expect a majority of RILA issuers to choose to use summary 
prospectuses and that therefore the majority of RILA investors will have the option to use both summary 
 



162 

Initial Summary Prospectus 

As under the current rule 498A, an initial summary prospectus for a RILA contract may 

only describe a single contract that the RILA issuer currently offers for sale.276 An initial 

summary prospectus may describe more than one class of a currently offered contract.277 

Aggregating disclosures for multiple contracts, or currently offered and no-longer-offered 

features and options of a single contract, can hinder investors from distinguishing between 

contract features and options that apply to them and those that do not. As a result, an initial 

summary prospectus could simplify and consolidate lengthy and complex disclosures. The 

content and ordering of items is designed to highlight aspects of a RILA contract that may not be 

emphasized in marketing materials and other disclosures.  

Like other summary prospectuses that rule 498A addresses, we are proposing a 

standardized presentation for RILA initial summary prospectuses to require certain disclosure 

items that we believe would be most relevant to investors to appear at the beginning of the initial 

summary prospectus, followed by supplemental information.278 The required presentation could 

also facilitate comparisons of different RILA contracts, as well as comparisons between RILA 

contracts and variable annuities. An initial summary prospectus must contain the information 

required by the rule, and only that information, in the order specified by the rule.279 The 

 

prospectuses and statutory prospectuses in their decision-making, in whatever proportion investors think is 
best for their preferences). 

276  See proposed rule 498A(b)(1). 
277  The definition of the term “class” in the proposed amendments is the same as the definition in the current 

rule (that is, as a class of a contract that varies principally with respect to distribution-related fees and 
expenses). Proposed rule 498A(a). 

278  See VASP Adopting Release at paragraph accompanying nn.58-59. 
279  Proposed rule 498A(b)(5). 



163 

information would be required to appear in the same order, and under relevant corresponding 

headings, as the rule specifies. 

The chart in Table 6 below outlines the information that we propose to require to appear 

in an initial summary prospectus for a RILA contract. We would not change these content 

requirements, with the exception of the ordering of the Overview of the Contract and KIT 

disclosures, from the current variable annuity requirements. The Commission has historically 

viewed these items as providing annuity investors with key information relating to a contract’s 

terms, benefits, and risks in a concise and reader-friendly presentation, and highlighting aspects 

of the contract that may not be emphasized in marketing materials and other disclosures.280 We 

preliminarily believe that this rationale is equally true in the context of RILA disclosure. Further, 

as discussed above, we propose that the Overview of the Contract disclosures (currently Item 3 

of Form N-4, but proposed to be re-numbered as Item 2) should precede the KIT (currently Item 

2 of Form N-4, but proposed to be re-numbered as Item 3), due to the context that the Overview 

section provides and based upon our experience with the form [and taking into account the 

results of investor testing].281 This change would be reflected in the requirements of rule 

498A.282 Otherwise, the same order of disclosures would be provided as under the current rule. 

 

280  See VASP Adopting Release at nn. 47-48 and accompanying text. To the extent that these content 
requirements are unchanged from the content requirements for variable annuity summary prospectuses, our 
rationale for these requirements has not changed from the rationale that is discussed throughout the sections 
of the VASP Adopting Release that address each of the content items discussed in Table 6 below. See 
VASP Adopting Release at section II.A.1.c. Further, we provide our reasoning as to why these particular 
disclosures are important to investors in the RILA context as a general matter in section II.B, supra. 

281  See supra section II.B.I.A.2. 
282  Currently, rule 498A requires issuers to place “Important Information You Should Consider About the 

[Contract]” disclosures before “Overview of the [Contract] disclosures.” 



164 

Table 6: Outline of the Initial Summary Prospectus 

 Heading in Initial 
Summary 
Prospectus 

Relevant 
Paragraph in 
Proposed 
Amendments to 
Rule 498A 

Item of 
Form  
N-4 (as 
proposed 
to be 
amended) 

Applicable 
to RILA 
Contracts?  

Applicable to 
Variable 
Annuities 
Registered on 
Form N-4?  

Cover 
Page 

Identifying 
Information (front 
cover page)[1]  

Rule 
498A(b)(2)(i) 
through (iv) 

-   

Legends (front 
cover page)[2] 

Rule 
498A(b)(2)(v) 

-   

EDGAR Contract 
Identifier (back 
cover page) 

Rule 
498A(b)(3) 

-   

Table of Contents 
(optional) 

Rule 
498A(b)(4) 

-   

Content Overview of the 
[Contract] 

Rule 
498A(b)(5)(ii) 

2  
(each 
paragraph of 
Item 2, as 
applicable) 

 
(each 
paragraph of 
Item 2 except 
(b)(2) and (d), 
which are 
generally only 
applicable to 
RILA 
contracts) 

Important 
Information You 
Should Consider 
About the [Contract] 

Rule 
498A(b)(5)(i) 

3  
(with line 
items 
applicable to 
RILA 
contracts, as 
specified in 
instructions 
to Item 3) 

 
(with line 
items 
applicable to 
variable 
annuities, as 
specified in 
instructions to 
Item 3) 

Benefits Available 
Under the [Contract] 

Rule 
498A(b)(5)(iv) 

10(a)   

Buying the 
[Contract] 

Rule 
498A(b)(5)(v) 

11(a)   

Making 
Withdrawals: 
Accessing the 

Rule 
498A(b)(5)(vii) 

12(a)   



165 

 Heading in Initial 
Summary 
Prospectus 

Relevant 
Paragraph in 
Proposed 
Amendments to 
Rule 498A 

Item of 
Form  
N-4 (as 
proposed 
to be 
amended) 

Applicable 
to RILA 
Contracts?  

Applicable to 
Variable 
Annuities 
Registered on 
Form N-4?  

Money in Your 
[Contract] 
Additional 
Information About 
Fees 

Rule 
498A(b)(5)(viii) 

4    

Appendix: 
[Investment 
Options/Portfolio 
Companies] 
Available Under the 
Contract 

Rule 
498A(b)(5)(ix) 

17   
(Item 17(b) 
and 17(c), as 
applicable) 

 
(Item 17(a) 
and 17(c), as 
applicable) 

Notes to Table 6: 
 
[1]: The beginning or front cover page of a RILA contract’s initial summary prospectus, like the initial summary 
prospectus of a variable annuity registered on Form N-4, would need to include the following information: (1) the 
insurance company’s name; (2) the name of the contract, and the class or classes if any, to which the initial summary 
prospectus relates; (3) a statement identifying the document as a “Summary Prospectus for New Investors”; and (4) 
the approximate date of the first use of the initial summary prospectus. 
 
[2]: The required legends would be the same for RILA contracts and for variable annuities registered on Form N-4. 
These legends address the purpose of the summary prospectus, the availability of the statutory prospectus and other 
information, information regarding the permitted cancellation period for the contract, and a statement that additional 
information about RILA contracts has been prepared by Commission staff and is available at investor.gov. The 
initial summary prospectuses for RILA contracts as well as variable annuities also would have to include the 
additional statements that we are proposing to require on the cover page of the prospectus for all Form N-4 issuers. 
See supra section II.B.1; see also proposed Item 1(a)(6)-(8) of Form N-4. 

A RILA initial summary prospectus would be permitted to include a table of contents. A 

table of contents must show the page number of the various sections or subdivisions of the 

summary prospectus, and immediately follow the cover page in any initial summary prospectus 

delivered electronically.  

The topics of the contents included in an initial summary prospectus—as well as the 

required headings under which these contents must appear—are the same for a RILA contract 

summary prospectus as for a summary prospectus of a variable annuity registered on Form 



166 

N-4.283 Further, certain of these required contents would vary in substance to reflect the unique 

aspects of RILA contracts as compared to variable annuities. These are indicated in Table 1 

above and include:  

• Disclosure provided under the heading “Overview of the Contract” (Item 2 of Form 

N-4), where disclosure for RILA contracts must include specific information about 

index-linked options currently offered under the contract, as well as interim value 

adjustments or market value adjustments that could affect an investor’s contract 

value;  

• Disclosure provided under the heading “Important Information You Should Consider 

About the Contract” (Item 3 of Form N-4), where certain rows in the required table 

are specific to RILA contracts as opposed to variable annuities;  

• Disclosure provided under the heading “Additional Information About Fees” (Item 4 

of Form N-4), where the requirements for fee information for RILA contracts differ 

from the parallel requirements for variable annuities (reflecting that RILA contracts 

generally do not entail annual contract expenses, but there are other costs associated 

with an investment in a RILA contract); and  

• Disclosure under the heading “Appendix: Investment Options Available Under the 

Contract” (Item 17 of Form N-4), where a RILA contract would include a different 

summary table for index-linked options offered under the contract than the summary 

table of variable options offered under a variable annuity.  

 

283  Proposed rule 498A(b)(5). 



167 

Each of these disclosure items, which would also appear in a RILA statutory prospectus, is 

discussed in more detail in section II.B above.  

Updating Summary Prospectus 

As under current rule 498A, RILA issuers would not send an updated initial summary 

prospectus to investors each year. Instead, any RILA issuers would send an updating summary 

prospectus, which would provide a brief description of certain changes with respect to the 

contract that occurred within the prior year.284 This would allow investors to focus their attention 

on new or updated information relating to the contract. Additionally, the updating summary 

prospectus would include certain of the items required in the initial summary prospectus that are 

most likely to entail contract changes and where any such contract changes are most likely to be 

important to investors because they affect how investors evaluate RILA contracts and are 

relevant to investors when considering additional investment decisions or otherwise monitoring 

their contracts. This is consistent with the Commission’s approach for variable annuity updating 

summary prospectuses.285 

Because the initial summary prospectus is designed for someone making an initial 

investment decision, we believe that existing RILA investors would benefit more from receiving 

 

284  A RILA issuer, like a variable annuity issuer, could only use an updating summary prospectus if it uses an 
initial summary prospectus for each currently offered contract described under the contract statutory 
prospectus to which the updating summary prospectus relates. Proposed rule 498A(c)(1). See also VASP 
Adopting Release at n.209 and accompanying text. 

285  See VASP Adopting Release at section II.A.2.a. As discussed above, the policy rationale for content 
requirements that would be the same among updating summary prospectuses for RILA contracts and 
variable annuity contracts—as well as the rationale for the location of these contents—is the same as that 
which the Commission articulated in adopting rule 498A. To the extent that these content requirements are 
unchanged from the content requirements for variable annuity summary prospectuses, our rationale for 
these requirements has not changed from the rationale that is discussed throughout the sections of the 
VASP Adopting Release that address each of the content items discussed in Table 7 below. See VASP 
Adopting Release at section II.A.2.c. Further, we provide our reasoning as to why these particular 
disclosures are important to investors in the RILA context as a general matter in section II.B, supra. 



168 

a shorter-form document including a brief summary of the changes to the contract, than from 

receiving the initial summary prospectus year after year.286 This approach also takes into account 

the cost to maintain and update separate initial summary prospectuses for currently offered 

contracts and those no longer offered.  

Unlike an initial summary prospectus, which could describe only a single contract that a 

RILA issuer currently offers for sale, an updating summary prospectus for a RILA could 

describe one or more contracts covered in the statutory prospectus to which the updating 

summary prospectus relates, as under current rule 498A.287 Similar to the initial summary 

prospectus, an updating summary prospectus could also describe more than one class of a 

contract.  

Updating summary prospectuses for RILA contracts, like initial summary prospectuses, 

would include specific disclosure items appearing in a prescribed order, under relevant 

corresponding headings.288 An updating summary prospectus for a RILA contract would have to 

contain the information required by the rule, and only that information, in the order specified by 

the rule. The chart in Table 7 below outlines the information that we propose to require to appear 

in an updating summary prospectus for a RILA contract.  

 

286  The Commission discussed this rationale when it initially adopted rule 498A. See VASP Adopting Release 
at section II.A.2.a. 

287  Proposed rule 498A(c)(2); see also VASP Adopting Release at nn.342-343 and accompanying paragraph.  
288  Proposed rule 498A(c)(6). 



169 

Table 7: Outline of the Updating Summary Prospectus 

 Heading in Updating 
Summary Prospectus 

Relevant 
Paragraph in 
Proposed 
Amendments to 
Rule 498A 

Item of 
Amended 
Form  
N-4 

Applicable to 
RILA 
Contracts?  

Applicable to 
Variable 
Annuities 
Registered on 
Form N-4?  

Cover 
Page 

Identifying 
Information (front 
cover page)[1] 

Rule 
498A(c)(3)(i) 
through (iv) 

-   

Legends (front cover 
page)[2] 

Rule 
498A(c)(3)(v) 

-   

EDGAR Contract 
Identifier (back cover 
page) 

Rule 
498A(c)(4) 

-   

Table of Contents 
(optional)[3] 

Rule 
498A(c)(5) 

-   

Content Updated Information 
About Your Contract 

Rule 
498A(c)(6)(i) 
through (ii) 

   

Important 
Information You 
Should Consider 
About the [Contract] 

Rule 
498A(c)(6)(iii) 

3  
(with line 
items 
applicable to 
RILA 
contracts, as 
specified in 
instructions 
to Item 3) 

 
(with line items 
applicable to 
variable 
annuities, as 
specified in 
instructions to 
Item 3) 

Appendix: 
[Investment 
Options/Portfolio 
Companies] 
Available Under the 
Contract 

Rule 
498A(c)(6)(iv) 

17   
(Item 17(b) 
and 17(c), as 
applicable) 

 
(Item 17(a) and 
17(c), as 
applicable) 

Notes to Table 7 
 
[1]: The beginning or front cover page of a RILA contract’s updating summary prospectus, like the updating 
summary prospectus of a variable annuity registered on Form N-4, would need to include the following information: 
(1) the insurance company’s name; (2) the name of the contract(s), and the class or classes if any, to which the 
updating summary prospectus relates; (3) a statement identifying the document as an “Updating Summary 
Prospectus”; and (4) the approximate date of the first use of the updating summary prospectus. 
 
[2]: The required legends would be the same for RILA contracts and for variable annuities registered on Form N-4. 
These legends address the purpose of the summary prospectus, the availability of the statutory prospectus and other 
information, and a statement that additional information about RILA contracts has been prepared by the SEC staff 
and is available at investor.gov. The updating summary prospectuses for RILA contracts as well as variable annuities 
also would have to include the additional statements that we are proposing to require on the cover page of the 



170 

 Heading in Updating 
Summary Prospectus 

Relevant 
Paragraph in 
Proposed 
Amendments to 
Rule 498A 

Item of 
Amended 
Form  
N-4 

Applicable to 
RILA 
Contracts?  

Applicable to 
Variable 
Annuities 
Registered on 
Form N-4?  

prospectus for all Form N-4 issuers. See supra section II.B.1; see also proposed Item 1(a)(6) through (8) of Form N-
4. 
 
[3]: The requirements for this optional table of contents would be the same for an updating summary prospectus as 
for an initial summary prospectus. See proposed rule 498A(b)(4); proposed rule 498A(c)(5). 

The updating summary prospectus for a RILA contract would be required to include a 

concise description of certain changes to the contract made after the date of the most recent 

updating summary prospectus or statutory prospectus that was sent or given to investors. These 

changes would appear under the heading “Updated Information About Your Contract,” with a 

required legend following the heading.289 The changes that the rule would require a RILA issuer 

to describe include those that relate to: (1) the availability of investment options under the 

contract; (2) the overview of the contract; (3) the KIT; (4) certain information about fees; (5) 

benefits available under the contract; (6) purchases and contract value; and (7) surrenders and 

withdrawals. The updating summary prospectus also could include a concise description of any 

other changes that the RILA issuer wishes to disclose, provided they occurred within the same 

time period as the other changes the rule would require the issuer to describe. In providing a 

concise description of a contract-related change in the updating summary prospectus, RILA 

issuers would have to provide enough detail to allow investors to understand the change and how 

it will affect them.290 

 

289  The legend would be the same for RILA contracts and variable annuities: “The information in this 
Updating Summary Prospectus is a summary of certain [Contract] features that have changed since the 
Updating Summary Prospectus dated [date]. This may not reflect all of the changes that have occurred 
since you entered into your [Contract].” Proposed rule 498A(c)(6)(i)(A). 

290  Proposed rule 498A(c)(6)(i)(B); see also VASP Adopting Release at paragraph accompanying n.374. 



171 

The topics for which a change would necessitate a description in the updating summary 

prospectus would be the same for RILA contracts as for variable annuities registered on Form 

N-4. We do not anticipate that disclosures addressing these topics in a contract statutory 

prospectus would change frequently, and thus providing investors with a notice and a brief 

description of any changes that do occur may be more informative than repeating all the 

disclosures each year.291 Despite the infrequency of changes, investors should be notified of any 

changes to these items given their importance to the investor’s experience of investing in a RILA 

contract.292  

We are proposing to amend rule 498A to specify that, in the context of a RILA contract 

updating summary prospectus, the change of availability of investment options includes a change 

to any of the features of the index-linked options disclosed in the table that Item 17(b) of Form 

N-4 requires (that is, the table in the appendix of investment options that will appear in a RILA 

contract summary prospectus).293 When the Commission adopted rule 498A, it stated that a 

change that has affected availability of portfolio companies (or investment options) includes 

changes in the portfolio companies (or investment options) offered under the contract or 

available in connection with any optional benefit.294 In the context of index-linked options, any 

change to the features of the index-linked options that the required table would describe—that is, 

the index, type of index, crediting period, index crediting methodology, limit on index loss, 

and/or guaranteed minimum limit on index gain—would meaningfully change the investor’s 

 

291  See VASP Adopting Release at paragraph following n.372. 
292  See id. at paragraph accompanying nn.365-369. 
293  Proposed rule 498A(c)(6)(i). 
294  VASP Adopting Release at n.361.  



172 

experience of investing in a RILA contract with the index-linked option that investor had 

previously chosen. For this reason, under the proposed amendments a change to any of these 

features would represent a change in the availability of the investment options that the RILA 

contract offers. 

The topics of the additional contents included in an updating summary prospectus—as 

well as the required headings under which these contents must appear—would be the same for 

RILA contracts and for variable annuities registered on Form N-4.295 Certain of these required 

contents, however, would vary in substance to reflect the unique aspects of RILA contracts as 

compared to variable annuities. These are indicated in Table 2 above and include:  

•  Disclosure provided under the heading “Important Information You Should Consider 

About the Contract” (Item 3 of Form N-4), where certain rows in the required table 

are specific to RILA contracts as opposed to variable annuities; and 

• Disclosure under the heading “Appendix: Investment Options Available Under the 

Contract” (Item 17 of Form N-4), where a RILA contract would include a different 

summary table for index-linked options offered under the contract than the summary 

table of variable options offered under a variable annuity.  

Online Accessibility of Contract Statutory Prospectus and Certain Other  

Documents Relating to the Contract 

Investors who receive a RILA contract initial or updating summary prospectus would 

have access to more detailed information about the RILA contract, either by reviewing the 

information online, or by requesting the information to be sent in paper or electronically. In this 

 

295  Proposed rule 498A(c)(6). 



173 

respect, the proposed amendments would include the same requirements for RILA contracts as 

for variable contracts. These requirements further the layered disclosure framework that rule 

498A creates for variable contracts and would, under the proposed amendments, similarly create 

for RILA contracts. Those insurance companies that issue RILAs, to the extent that they also 

issue variable annuity contracts that use summary prospectuses under rule 498A, therefore 

should be generally familiar with the practice of making this information available online and be 

able to integrate it with existing processes for variable annuities. Similar to what the Commission 

expressed in the context of variable annuity summary prospectuses, permitting RILA investors to 

access the contract statutory prospectus in several ways (online and by physical or electronic 

delivery) would maximize the accessibility and usability of this information and that investors 

have historically indicated a preference for both online and paper resources.296  

Under the proposed amendments, a RILA issuer relying on rule 498A (like a variable 

annuity issuer relying on this rule currently), would have to make the contract’s current initial 

summary prospectus, updating summary prospectus, statutory prospectus, and SAI (together, the 

“required online contract documents”) available online.297 These required online contract 

documents would be required to be publicly accessible, free of charge, at the website address that 

the cover page of the summary prospectus specifies, on or before the time that the person relying 

 

296  See VASP Adopting Release at n.417 and accompanying text; and Office of Investor Education and 
Advocacy of the U.S. Securities and Exchange Commission, Study Regarding Financial Literacy Among 
Investors (Aug. 2012), available at https://www.sec.gov/news/studies/2012/917-financial-literacy-study-
part1.pdf, at iv, xix. These proposed requirements are unchanged from the requirements for variable 
annuity summary prospectuses, and our rationale for these requirements has not changed from the 
Commission’s rationale that is discussed throughout the sections of the VASP Adopting Release that 
discuss online accessibility requirements. See VASP Adopting Release at sections II.A.5 and II.A.6. 

297  For proposed requirements relating to the required online contract documents, see generally proposed rule 
498A(h). 

https://www.sec.gov/news/studies/2012/917-financial-literacy-study-part1.pdf
https://www.sec.gov/news/studies/2012/917-financial-literacy-study-part1.pdf


174 

on the rule provides the summary prospectus to investors.298 The website address on which the 

required online contract documents appear must be specific enough to lead investors directly to 

the documents, although the website could be a central site with prominent links to each 

document.299 The required online contract documents would have to be presented in a manner 

that is human-readable and capable of being printed on paper in human-readable format, and 

persons accessing the documents must be able to permanently retain electronic versions of the 

documents. The proposed amendments include requirements for linking within the electronic 

versions of the contract statutory prospectus and SAI that are available online, and also for 

linking between electronic versions of contract summary and statutory prospectuses that are 

available online.  

Both initial summary prospectuses and updating summary prospectuses for RILA 

contracts would, like variable annuity summary prospectuses, be required to define any “special 

terms” elected by the registrant, using any presentation that clearly conveys their meaning to 

investors.300 In RILA contract summary prospectuses that are available online, the proposed 

amendments (like the current rule) require that investors be able either to view the definition of 

each special term upon command, or to move directly back and forth between each special term 

and the corresponding entry in any glossary or list of definitions the summary prospectus 

includes. 

 

298  A current version of each of the required online contract documents would have to remain available for at 
least 90 days following either: (1) the time of the “carrying or delivery” of the contract security if a person 
is relying on the rule to satisfy its section 5(b)(2) prospectus delivery obligations; or (2) if a person is 
relying on the rule to send communications that will not be deemed to be prospectuses, the time that the 
person sends or gives the communication to investors. Proposed rule 498A(h)(1). 

299  Proposed rule 498A(b)(2)(v)(B). 
300  Proposed rule 498A(e). 



175 

Satisfying each of these requirements regarding online accessibility of contract statutory 

prospectuses and certain other documents relating to the contract is a condition for a RILA issuer 

to rely on rule 498A to satisfy prospectus delivery obligations.301 Failure to comply with any of 

these conditions could result in a violation of section 5(b)(2) unless the contract statutory 

prospectus is delivered by means other than reliance on the rule. We recognize, however, that 

there may be times when, due to events beyond a person’s control, the person may temporarily 

not be in compliance with the rule’s conditions regarding the availability of the required online 

contract documents. The proposed amendments, like the current rule, includes a safe harbor 

provision addressing temporary noncompliance.302  

Other Requirements for Summary Prospectus and Other Contract Documents  

Like current rule 498A, the proposed amendments to rule 498A include additional 

requirements for RILA contract summary prospectuses. 303 These include:  

• Certain requirements relating to the delivery of paper or electronic copies of the required 

online contract documents upon request; 

• The requirement that a contract summary prospectus must be given greater prominence 

than any materials that accompany the contract summary prospectus;  

 

301  Proposed rule 498A(f)(4); proposed rule 498A(g)(4). 
302  Proposed rule 498A(h)(4). This provides that the conditions regarding the availability of the required online 

contract documents will be deemed to be met, even if the required online contract documents are 
temporarily unavailable, provided that the person has reasonable procedures in place to ensure that those 
materials are available in the required manner. A person relying on the rule to satisfy prospectus delivery 
obligations is required to take prompt action to ensure that those materials become available in the manner 
required as soon as practicable following the earlier of the time when the person knows, or reasonably 
should have known, that the documents were not available in the manner required. 

303  For these additional proposed requirements, see generally proposed rule 498A(i). 



176 

• Requirements that: (1) the required online documents be presented in a format that is 

convenient for reading and printing, and (2) a person be able to retain electronic versions 

of these documents in a format that is convenient for reading and printing; and 

• The requirement for any website address that is included in an electronic version of the 

summary prospectus to be an active hyperlink. 

Failure to comply with these additional requirements would not, however, negate a person’s 

ability to rely on the rule to satisfy prospectus delivery obligations. 

Request for Comments 

We request comment on the proposed amendments to rule 498A, which would permit 

RILA issuers to use a summary prospectus to satisfy statutory prospectus delivery obligations: 

102. Is it appropriate to permit RILA issuers, as well as issuers of “combination 

contracts,” to use a summary prospectus to satisfy statutory prospectus delivery 

obligations? Why or why not?  

103. Would the current rule 498A framework, which provides for an initial summary 

prospectus and an updating summary prospectus, be appropriate for RILA 

contracts?  

104. Is it appropriate that the use of summary prospectuses for RILA contracts be 

voluntary, as proposed? Should the use of summary prospectuses for RILA 

contracts instead be mandatory? 

105. Should an initial summary prospectus for a RILA contract only describe a single 

contract that the RILA issuer currently offers for sale, as proposed? Instead should 

we permit an initial summary prospectus to describe more than one contract? Do 



177 

commenters recommend any other changes to the proposed scope requirements for 

initial summary prospectuses for RILA contracts?  

106. Is the proposed presentation for RILA initial summary prospectuses appropriate, 

or should we modify the initial summary prospectus presentation requirements in 

any way? 

107. Are the proposed summary prospectus cover page requirements appropriate? For 

example, is it appropriate that initial (and updating) summary prospectuses for 

RILA contracts as well as variable annuities also would have to include the 

additional statements that we are proposing to require on the cover page of the 

prospectus for all Form N-4 issuers? 

108. Do the proposed RILA initial summary prospectus content items represent the 

disclosure that would best highlight the key terms, benefits, and risks of a RILA 

contract? Do the proposed content items capture key considerations that a typical 

contract investor would find salient? Should an initial summary prospectus include 

additional information an investor would need in order to make an informed 

investment decision, and if so, what would this information be? For example, is 

there any information we are proposing to include in Item 6 of Form N-4 that we 

should include in the summary prospectus? Alternatively, should we exclude or 

modify any of the proposed initial summary prospectus disclosure requirements? 

To the extent that commenters suggest changes that would result in different 

content across initial summary prospectuses for RILA contracts versus variable 

annuities, why would such changes be appropriate, and how should we address 



178 

these suggested changes in the context of “combination contracts” offering a 

combination of index-linked options and variable options?  

109. Under the proposal, would initial summary prospectuses for RILA contracts, on 

average, be longer, shorter, or about the same length as variable annuity initial 

summary prospectuses? What would account for any meaningful differences in 

average length? 

110. Is the proposed updating summary prospectus approach appropriate for existing 

RILA investors? Do commenters agree that existing RILA investors would benefit 

more from a brief summary of the changes to the contract reflected in the statutory 

prospectus than from receiving all of the disclosures in the initial summary 

prospectus? Instead should existing RILA investors receive a summary prospectus 

akin to the initial summary prospectus year after year? 

111. Should we permit, as proposed, an updating summary prospectus for a RILA 

contract to describe one or more contracts covered in the related statutory 

prospectus? Do commenters recommend any other changes to the proposed scope 

requirements for updating summary prospectuses for RILA contracts?  

112. We request comment on the proposed requirement to include a brief description 

of certain contract-related changes in the updating summary prospectus. Would 

this disclosure requirement be useful to investors? Is the scope of changes that a 

RILA issuer would be required to discuss appropriate? Are there other topics about 

which we should require a RILA issuer to describe a change? Should we define a 

change in the availability of investment options that would require disclosure as a 

change to any of the features of the index-linked options that the table that Item 



179 

17(b) of Form N-4 would require, as proposed? If not, what definition would be 

more appropriate and why? 

113. Do the other proposed RILA contract updating summary prospectus content items 

represent the disclosure that would be most appropriate and useful for existing 

investors, for example in considering whether to continue making additional 

purchase payments or reallocate contract value? If not, what alternative disclosure 

should we require? 

114. Should rule 498A include, as proposed, the same requirements with respect to 

online accessibility of a RILA contract statutory prospectus and certain other 

documents relating to the contract as the rule provides for variable annuities 

(including, as described above, the requirements to make the required online 

contract documents available online, presentation and linking requirements for 

these documents, and requirements relating to the definitions of “special terms”)? 

If not, what alternative requirements should we adopt to help ensure that investors 

who receive a RILA contract summary prospectus have access to more detailed 

information about the RILA contract if they want it? For example, should the 

required online contract documents also include information about the current 

limits on gains for each index-linked option offered under the contract? As another 

example, should the required online contract documents for issuers of RILAs and 

variable annuities that rely on rule 498A also include the financial statements of 

the registrant and/or insurance company, to the extent that these financial 

statements are not included in the SAI (if, for instance, an insurer’s financial 

statements are filed on Form N-VPFS or Form 10-K, and are incorporated by 



180 

reference into the registration statement)? To what extent would using the same 

approach for both RILAs and variable annuities ease compliance burdens on 

insurers? Is it appropriate that, as proposed, satisfying each of these proposed 

online accessibility requirements would be a condition for a RILA issuer to rely on 

rule 498A to satisfy prospectus delivery obligations? Are there any modifications 

we should make to the proposed safe harbor provision for temporary 

noncompliance? 

115. Should rule 498A include, as proposed, the same other requirements for summary 

prospectuses (relating to delivery upon request, prominence of the summary 

prospectus in relation to accompanying materials, “convenient for reading and 

printing” formatting, and hyperlinking requirements) as the rule currently requires 

for variable annuity summary prospectuses? Is it appropriate that, as proposed, 

satisfying each of these proposed requirements would not be a condition for a 

RILA issuer to rely on rule 498A to satisfy prospectus delivery obligations? 

D. Accounting (Items 16 and 26) 

We are proposing to permit RILA issuers to provide financial statements on amended 

Form N-4 in the same way that insurance companies currently do on Form N-4. The principal 

consequence of this change would be that the financial statements filed in connection with a 

RILA registration statement could be prepared in SAP to the same extent as currently permitted 

for insurance companies’ financial statements filed on that form. Instruction 1 to Item 26(b) of 

Form N-4 currently permits insurance companies that are the depositors of variable annuity 

separate accounts to prepare their financial statements for use in a registration statement filed on 

Form N-4 in accordance with SAP if the depositor would not have to prepare its financial 

statements in accordance with GAAP except for use in that registration statement or other181 

registration statements filed on Forms N-3, N-4, or N-6 (the forms used to register insurance 

products that are issued by investment companies).304 The instruction further states that the 

depositor insurance company’s financial statements must be prepared in accordance with GAAP 

if it prepares financial information in accordance with GAAP for use by its parent (as defined in 

Regulation S-X) in any report under sections 13(a) and 15(d) of the Exchange Act or any 

registration statement filed under the Securities Act.305 In interpreting this instruction the 

Commission has stated that the insurance product forms do not require the use of GAAP when: 

(1) GAAP financial statements are not prepared for either the depositor or its parent; or (2) the 

depositor’s parent prepares GAAP financial statements, but the depositor’s accounts are 

immaterial to its parent’s consolidated financial statements and, therefore, neither partial GAAP 

financial statements nor a GAAP reporting package is prepared by the depositor.306 

Forms S-1 and S-3 do not include an instruction similar to Instruction 1 of Item 26(b) of 

Form N-4. Rather RILAs registered on these forms are required to provide their financial 

statements in accordance with GAAP. The Commission, however, acting through authority 

delegated to the staff, has permitted insurance companies registering on Form S-1 to include 

SAP financial statements in RILA registration statements in the circumstances permitted by 

 

304  Similar to insurance products currently filing registration statements on these forms, RILA issuers would 
also be required, if all of the required financial statements of the insurance company are not in the 
prospectus, to state in the prospectus, under a separate caption, where the financial statements may be 
found and to briefly explain how investors may obtain any financial statements not in the SAI. Proposed 
item 16 of Form N-4. 

305  Similar instructions are contained in the other forms used to register insurance products issued by 
investment companies. See instruction 1 to Item 31(b) of Form N-3 and instruction 1 to Item 28(b) of Form 
N-6. 

306  See Registration Form for Insurance Company Separate Accounts Registered as Unit Investment Trusts that 
Offer Variable Life Insurance Policies, Investment Company Act Release No. 23066 (Mar. 13, 1998) [63 
FR 13988 (Mar. 23, 1998)] (discussing the same instruction in Form N-6). 



182 

Form N-4.307 The Commission has stated that this approach appropriately recognizes the cost 

burdens that would be imposed if the Commission were to require GAAP financial statements in 

cases where the depositor is not otherwise required to prepare financial information in 

accordance with GAAP.308 We preliminarily believe this is also true for insurance companies 

that offer RILAs and that it is important to provide for the consistent treatment of financial 

statements for all insurance companies that meet the circumstances permitted by Form N-4. As a 

result, permitting RILA issuers to rely on Instruction 1 to Item 26 to provide SAP financial 

statements to the same extent as issuers registering offerings of variable annuities on Form N-4 

would be consistent with investor protection. In addition, SAP financial statements, which focus 

on an issuer’s ability to meet its obligations under its insurance contracts, as regulated by state 

law, appear to provide sufficient material information for investors evaluating RILAs. 

Another consequence of requiring insurance companies to register offerings of RILAs on 

Form N-4 is that they will have greater flexibility to update their registration statement without 

the need to update certain financial statements. Under section 10(a)(3) of the Securities Act, 

RILA issuers, like variable annuity issuers, generally must file a post-effective amendment 

annually to update their audited fiscal year-end financial statements. In addition, Regulation S-X 

requires Form S-1 filers to include unaudited interim financial statements in any new registration 

statement or post-effective amendment that goes effective later than 134 days after the end of the 

 

307  See, e.g., F&G Life Letter. 
308  See Registration Form for Insurance Company Separate Accounts Registered as Unit Investment Trusts 

That Offer Variable Life Insurance Policies, Investment Company Act Release No. 25522 (Apr. 12, 2002) 
[67 FR 19848 (Apr. 23, 2002)]; see also VASP Adopting Release at n.813 and accompanying text. 



183 

insurer’s fiscal year.309 Form N-4 filers are not subject to this requirement.310 In addition, after 

the end of an insurer’s fiscal year, RILA issuers must include year-end audited financial 

statements in any new registration statement or post-effective amendment filed 45 days after the 

fiscal year-end.311 However, Form N-4 filers instead have a 90-day grace period.312 As a result of 

the proposal to include RILAs on Form N-4, RILA issuers therefore  would be able to file and 

amend their registration statements during certain times of year without the need to update their 

financial statements, which RILA issuers cannot do today.313 These approaches, in consideration 

of consistency in treatment among all insurance companies that meet the circumstances 

permitted by Form N-4, are equally appropriate for RILA filers on Form N-4. 

We are also proposing to require RILAs to provide the information relating to changes in 

and disagreements with accountants on accounting and financial disclosure as detailed in 17 CFR 

229.304 (“Item 304 of Regulation S-K”). Further, RILAs would be required to provide as an 

exhibit any letter from the insurance company’s former independent accountant regarding its 

concurrence or disagreement with the statements made by the insurance company in the 

registration statement concerning the resignation or dismissal as the insurance company’s 

 

309  17 CFR 210.3-12(a). RILA issuers that rely on rule 12h-7 are not required to provide periodic Exchange 
Act reports, including quarterly reports that include interim financial statements. Therefore, they must 
prepare interim financial statements for Securities Act registration statements, like Form S-1 and Form S-3, 
even though they do not prepare interim financial statements for other purposes.  

310  See Instruction 3 to Item 26(b) of Form N-4. 
311  See 17 CFR 210.3-01(c). 
312  See Instruction 3 to Item 26(b) of Form N-4. 
313  A further consequence of the proposed changes would be that insurance companies would generally be 

making available their RILA-related financial statements to investors on an annual basis, consistent with 
the timing of financial statements for variable annuities. Currently, insurance companies relying upon rule 
12h-7 provide their RILA-related financials annually, whereas insurance companies not relying on that rule 
provide financial statements quarterly. Insurance companies not relying on rule 12h-7 will file financial 
statements more frequently than annually if there are any post-effective amendments to the registration 
statement that require updated financial statements. See Form 10-Q. 



184 

principal accountant. These items are currently provided by RILAs on Forms S-1 and S-3 and are 

designed to address the practice of “opinion shopping” for an auditor willing to support a 

proposed accounting treatment designed to help a company achieve its reporting objectives even 

though that treatment might frustrate reliable reporting.314 The proposed amendments would not 

be required for variable annuities in light of their tiered investment company structure. Variable 

annuities typically invest indirectly in mutual funds offered as investment options under such 

contracts, which themselves are subject to similar disclosure obligations relating to changes in 

and disagreements with accountants on accounting and financial disclosure.315 

We request comment on these aspects of the proposal. 

116. Is it appropriate, as proposed, to permit RILA issuers to use the same approach 

with respect to the use of SAP financial statements, for purposes of preparing 

financial statements that are included on a registration statement on Form N-4, as 

Form N-4 currently provides for insurance company issuers? Why or why not?  

117. Would SAP financials provide sufficient material information for a RILA investor 

to make an informed investment decision? Why or why not? 

118. Why do insurance companies currently provide SAP financials instead of GAAP 

financials in their Form N-4 registration statements when permitted to do so? Do 

SAP financials currently provide sufficient material information for a variable 

annuity investor to make an informed investment decision?  

 

314  See Disclosure Amendments to Regulation S-K, Form 8-K and Schedule 14A Regarding Changes in 
Accountants and Potential Opinion Shopping Situations, Investment Company Act Release No. 16358 
(Apr. 12, 1988) [53 FR 12924 (Apr. 20, 1988)]; see also item 11(i) of Form S-1.  

315  See Item 27(b)(4) of Form N-1A.  



185 

119. Should we require the proposed items relating to changes in accountants for 

RILAs? If so, should we also require these items for all Form N-4 filers? If the 

information called for in Item 304 of Regulation S-K is required, is it appropriately 

placed in the SAI? 

E. Filing and Prospectus Delivery Rules 

1. Fee Payment Method and Amendments to Form 24F-2 

We are proposing to require insurance companies to pay securities registration fees 

relating to RILA offerings using the same method used for variable annuities.316 Specifically, 

issuers registering the offerings of RILAs on amended Form N-4 would be deemed to be 

registering an indeterminate amount of securities upon effectiveness of the registration 

statement.317 These issuers would then be required to pay registration fees annually based on 

their net sales of these securities, no later than 90 days after the issuer’s fiscal year ends, on the 

form that is used by registered separate accounts to pay securities registration fees relating to 

 

316  To accommodate the changes proposed in this release, EDGAR would be modified to require insurance 
companies registering RILAs to use a different CIK than that used for their other offerings. One CIK would 
be utilized to register the offerings of RILAs on Form N-4 and pay registration fees for securities relating to 
RILA offerings on Form 24F-2. The other would be utilized to register the insurance company’s other 
offerings of securities as they do currently. As a result, insurance companies would need to utilize separate 
CIKs for their RILA-related filings. If the issuer only offers RILAs, it should only use one CIK. Further, 
we are proposing to amend rule 313 of Regulation S-T in order to permit filings relating to RILA offerings 
to have both an investment company type and contract identifier in order to facilitate RILA issuers’ filing 
these forms and for ease in identification of particular RILA contracts. 

317  The proposed rule amendments would apply the same registration fee payment approach to RILAs that is 
currently provided by rule 24f-2 to current Form N-4 issuers. See proposed rules 456(e) (providing that 
where the registration statement relates to a RILA offering, RILA issuers would be deemed to have 
registered an indeterminate amount of securities for purposes of sections 5 and 6(a) of the Securities Act 
upon the effective date of its registration statement); and 457(u) (providing for RILA issuers to pay 
registration fees for securities relating to RILA offerings on the same annual net basis as other Form N-4 
issuers); see also proposed Form 24F-2. See section 4(e) of the Exchange Act [15 U.S.C. 78d-4(e)]; section 
28 of the Securities Act [15 U.S.C. 77z-3]. We preliminarily believe that these actions are necessary or 
appropriate in the public interest and consistent with the protection of investors. 



186 

variable annuities (Form 24F-2).318 We are further proposing to specify the calculation method 

for paying securities registration fees for RILA offerings, consistent with the fee calculation 

methodology that applies to variable annuities.319 We are also proposing amendments to Form 

24F-2 to specify when issuers can take credits for RILA redemptions that pre-date their use of 

that form and when expiring annuity contracts are rolled over into a new crediting period, as well 

as other non-substantive and conforming amendments.320 

Currently, insurance companies, like most issuers, register a specific amount of securities 

when registering RILAs and are required to pay a registration fee for those securities to the 

Commission at the time of filing a registration statement on Form S-1 or S-3.321 In contrast, the 

 

318  As a general matter, the proposed amendments would provide the same process for registering an 
indeterminate amount of securities relating to RILA offerings as is currently provided for exchange-traded 
vehicle securities under rule 456(d) (which, in turn, mirrors of the process for current Form N-4 issuers to 
register securities) except that (1) this process would be mandatory for RILAs and (2) RILA issuers would 
pay fees on Form 24F-2 instead of through a prospectus supplement in accordance with rule 424. See also 
Securities Offering Reform for Closed-End Investment Companies, Investment Company Act Release No. 
33836 (Apr. 8, 2020) [85 FR 33290 (June 1, 2020)] (“Closed-End Fund Offering Reform Adopting 
Release”). For example, the proposed amendments would provide the same mechanics as other Form 24F-2 
issuers when addressing interest calculations for late payments. 

319  All payments of filings fees for RILA registration statements would continue to be made by wire transfer, 
debit card, or credit card or via an ACH and there would be no refunds. See 17 CFR 230.111; proposed 
instruction A.5 to Form 24F-2.  

320  In addition to conforming changes in proposed Form 24F-2 to effectuate the changes discussed below, in 
order to improve the form we are proposing to: (1) remove reporting relating to shares paid for prior to Oct. 
11, 1997; (2) remove the statement in current Instruction A.3 to consult the EDGAR Filer Manual because 
the instructions referenced in Instruction A.3 are intended to be removed from the EDGAR Filer Manual; 
(3) remove current Instruction C.4, which includes EDGAR header tags for Item 5 of the form, as this 
information is no longer sufficient for filing purposes and current technical specifications are provided 
through the technical specifications page on the Commission’s webpage; (4) revise current Instruction C.9 
for Item 5(vii) to correspond to the current instructions for fee filing rates on the Commission’s website; (5) 
correct the website linked in current Instruction D.1; and (6) remove the estimated Paperwork Reduction 
Act burden cited in current Instruction F as extraneous in light of the OMB approval box that contains 
information on this topic. 

321  In general, issuers today—including insurance companies issuing securities relating to RILA offerings—
are required under the Securities Act to pay a registration fee to the Commission at the time of filing a 
registration statement. See sections 6(b)(1) (requiring applicants to pay a fee to the Commission at the time 
of filing a registration statement) and (c) (providing that a registration statement shall not be deemed to 
have taken place without payment of a registration fee) of the Securities Act [15 U.S.C. 77f(b)(1) and (c)]. 
This means they pay registration fees at the time they register the offering of securities, regardless of when 
 



187 

Investment Company Act provides that certain registered investment companies, including the 

variable annuity separate accounts that file on Form N-4, are deemed to have registered an 

indefinite amount of securities upon the effective date of their registration statement.322 Instead 

of paying registration fees at the time of filing a registration statement, registered separate 

accounts pay registration fees in arrears based on their net issuance of securities, no later than 90 

days after the issuer’s fiscal year end, on Form 24F-2.323 As a result, RILA issuers must 

currently ensure that they do not inadvertently sell more securities than they have registered, 

however this is not a concern in relation to variable annuities. Further, RILA issuers pay fees at 

effectiveness on Forms S-1 or S-3 for the securities being registered, while registered separate 

accounts do not pay a fee at effectiveness on Form N-4 but rather pay fees annually on Form 

24F-2 on the net sales of securities that year. 

Consistent with the other elements of this proposal, these proposed amendments are 

designed to require insurance companies to use the same framework to pay securities registration 

fees for RILAs that they do for variable annuities. Insurance companies offer RILAs in a manner 

substantially similar to variable annuities and would similarly benefit from paying registration 

fees on an annual net basis and from registering offerings of an indeterminate number of 

securities. The proposed amendments would provide registration fee payment parity for an 

insurance company that may offer one or more related insurance products, including index-

 

(or if) they sell them. In addition, although well-known seasoned issuers have additional flexibility in 
paying filing fees, none of the insurance companies that issue securities relating to RILA offerings 
currently claim status as a well-known seasoned issuer. See supra footnote 21. 

322  See 15 U.S.C. 80a-24(f). 
323  See id.; Form 24F-2. 



188 

linked options offered as part of combination annuity contracts.324 Requiring insurance 

companies to pay registration fees for securities relating to RILA offerings on Form 24F-2 would 

therefore be efficient for insurance companies. This approach would eliminate the risk that a 

RILA issuer may inadvertently oversell securities with respect to a registration statement on 

Form N-4, and the payment of fees on an annual net basis furthermore should lead to a reduction 

in overall filing fees relating to RILAs.325 Further, by requiring RILA and variable annuity 

offerings to use the same form and payment method, this process also would be efficient for the 

Commission. 

The proposed fee calculation method is also consistent with the continuous offering of 

RILAs to investors. These investors may make additional allocations or other investment 

decisions over time with respect to an investment in a RILA. One effect of this is that RILA 

issuers, unlike other Form S-1 or S-3 issuers, may have increased difficulty in using the filing 

fees associated with unsold securities of a particular RILA offering to offset the filing fees due 

for a subsequent registration statement. This is because many RILA issuers are not easily able to 

terminate a RILA offering, a necessary step to recoup fees paid on unsold securities for use in a 

separate RILA offering.326 

 

324  For combination products, each issuer of securities under the product (e.g., the separate account for the 
variable option and the insurance company for the index-linked option) would file a separate Form 24F-2 
relating to the payment of registration fees for its respective securities offered under the product. 

325  As part of the proposed amendments to Form 24F-2, RILA issuers would be required to include the value 
of any expiring annuity contract or index-linked option that is rolled over into a new crediting period in its 
calculation of the aggregate sale price of securities sold during the fiscal year. RILA issuers further would 
be required to report such contracts or options as a redemption. This would result in zero net sales being 
reported in this situation. See proposed instruction C.4 to Form 24F-2. 

326  See 17 CFR 230.457(p). To facilitate the transition to calculating fees on an annual net basis and filing 
Form 24F-2, a RILA’s fee calculation should exclude excess securities that were registered under its last 
registration statement that remain unsold prior to the effectiveness of any final rule. See proposed 
instruction C.5 to Form 24F-2. This would be so that a filing fee is not charged twice for the same 
securities being registered. 



189 

We are also proposing amendments to Form 24F-2 that would indicate when RILA 

issuers can take credits for redemptions of securities not claimed in a prior fiscal year (“non-

claimed prior redemptions”). Typically, issuers that file Form 24F-2 can take credit for these 

redemptions to offset some of the purchases being reported for the current fiscal year. This is 

only intended to be available for non-claimed prior redemptions that had occurred since the use 

of the form (and the payment of registration fees on an annual net basis) was available to the 

issuer.327 The form, however, includes a legacy instruction for any non-claimed redemptions in a 

prior fiscal year that ends no earlier than October 11, 1995. This specific date is related to the 

timing of open-end funds’ and unit investment trusts’ transition to Form 24F-2.328 With the 

addition of RILAs to this form, we are removing the reference to October 11, 1995 in Item 5(iii) 

of Form 24F-2 and amending the related instructions so that it is clear that issuers will only be 

able to take credit for non-claimed prior redemptions that occur on or after the date the issuer 

became eligible to use the form, which for RILA issuers would be the effective date of the 

proposed amendments, if adopted.329 

We request comment on the proposed fee payment methodology for RILAs and the 

proposed amendments to Form 24F-2. 

120. Is it appropriate to require RILA issuers to pay registration fees in arrears for the 

registration of securities? Would the process be more efficient for insurance 

companies than the current registration fee processes used by RILA issuers? If not, 

 

327  See generally Closed-End Fund Offering Reform Adopting Release at n.348. 
328  See Registration Under the Securities Act of 1933 of Certain Investment Company Securities, Investment 

Company Act Release No. 22815 (Sep. 10, 1997) [62 FR 47934 (Sep. 12, 1997)] at n.9. 
329  In addition to RILA issuers, interval funds have been able to use Form 24F-2 since Aug. 1, 2021 (the 

effective date of rule 24f-2 as applied to interval funds), so these funds likewise would only be able to take 
credit for non-claimed prior redemptions since that date. 



190 

what is the appropriate manner in which RILA issuers should pay registration 

fees? For example, should we instead amend Form N-4 to permit or require the 

payment of fees on that form for RILA issuers at the time the issuer files the 

registration statement, consistent with insurance companies’ current practices 

when paying registration fees for securities offerings registered on Forms S-1 and 

S-3? 

121. Instead of requiring RILA issuers to pay registration fees in arrears as proposed, 

should we permit RILA issuers to choose whether to take this treatment or use 

some other registration fee system? 

122. Is the proposed calculation methodology appropriate for RILAs? If not, what 

aspects of the methodology should be changed and why? 

123. Is it appropriate to have RILA issuers file Form 24F-2 for this purpose, or should 

we instead have RILA issuers file a prospectus pursuant to rule 424(i), consistent 

with the treatment of exchange-traded vehicle securities under rule 456(d)? 

124. Are the proposed amendments to Form 24F-2 appropriate? Should we tailor Form 

24F-2 to RILAs in other ways? Are the proposed amendments clear as to how a 

RILA issuer would use that form? Are there any other clarifications we should 

offer? 

125. Should we, as proposed, require separate Form 24F-2 filings for index-linked 

options and variable options that are offered as investment options in combination 

contracts? If not, how can we amend Form 24F-2 and rules 456 and 457 to 

accommodate combination contracts, given different legal entities are issuing the 

securities associated with different types of investment options? 



191 

126. Are the proposed amendments to rule 456 and 457 sufficiently clear as to how 

RILA issuers should calculate and pay the registration fees for securities relating to 

RILA offerings? Should we amend the rules further to provide more clarity? 

127. The proposed amendments to rule 456 and Form 24F-2 provide procedures for 

how to address a merger or the cessation of operations of the issuer, which in the 

RILA context is the insurance company issuing the RILA. Are these provisions 

necessary for RILA issuers? Should these instructions instead address the cessation 

or merger of the particular RILA being reported?  

128. Do commenters agree with the proposed requirements for how to address non-

claimed prior redemptions? Why or why not? 

129. Are there any other considerations or changes we should make to facilitate 

requiring RILA issuers to pay registration fees in arrears, either regarding 

securities already registered by RILA issuers or for some other reason? 

2. Post-Effective Amendments and Prospectus Supplements 

To facilitate the registration of RILA offerings on Form N-4 and consistent with the other 

elements of this proposal, we are proposing amendments to require RILA issuers to use the same 

framework for filing post-effective amendments to the registration statement that other issuers on 

Form N-4 currently use. Specifically, the proposal would amend rule 485 to require RILA issuers 

to use that rule when amending RILA registration statements on Form N-4. This change would 

permit RILA issuers to file post-effective amendments that become automatically effective under 

rule 485(a) after a specified period of time after the filing or, in certain enumerated 



192 

circumstances, immediately effective under rule 485(b).330 In addition, we are also proposing 

amendments that would require RILA issuers to apply rule 497 under the Securities Act when 

appropriate to file RILA prospectuses and prospectus supplements with the Commission.331 

These amendments are intended to facilitate a uniform post-effective amendment and prospectus 

filing framework for issuers on Form N-4 and should provide increased efficiencies for RILA 

issuers and Commission staff by applying consistent procedures for all security offerings 

registered on Form N-4. 

Our rules currently provide different processes for RILA issuers on Forms S-1 and S-3 

and current issuers on Form N-4 to update and keep current a registration statement or 

prospectus. Form N-4 is used by separate accounts that are unit investment trusts that offer 

variable contracts to register their securities under the Investment Company Act and to register 

an indefinite amount of continuously-sold securities under the Securities Act. Therefore, these 

issuers have a system of updating their disclosures that facilitates that structure. Issuers on Form 

N-4 typically update their registration statements annually through a post-effective amendment 

filed in accordance with rule 485 in order to, among other things, comply with Securities Act 

requirements.332 Rule 485(b) provides for the immediate effectiveness of many of the routine 

updates that issuers on Form N-4 may make over the course of a continuous, long-term offering, 

for example, those amendments filed for no purpose other than to bring the financial statements 

 

330  See rule 485(b).  
331  Consistent with this change, we are also proposing corresponding changes to (1) rule 424(f) to specify that 

RILA issuers must use rule 497 rather than rule 424 when filing prospectuses and prospectus supplements, 
and (2) rule 415(b) to exempt RILA offerings from the requirements of paragraph (a) of that rule consistent 
with the treatment of variable annuity separate accounts. 

332  See, e.g., section 10(a)(3) of the Securities Act [15 USC 77j(a)(3)]. 



193 

up to date under section 10(a)(3) of the Securities Act.333 These issuers also file forms of 

prospectuses used in their offerings through rule 497 and can supplement their prospectuses, also 

known as “stickering,” to reflect certain changes to the information disclosed by making a filing 

with the Commission in accordance with rule 497.  

Conversely, RILA issuers currently follow the processes operating companies use to 

update their registrations statements. Operating companies that are engaged in a continuous 

offering of securities, like RILA issuers, are similarly required to update their registration 

statement each year and may update their registration statement for changes other than to bring 

the financial statements up to date.334 For RILAs whose offerings are registered on Form S-1, 

these updates typically occur through a post-effective amendment.335 Rule 462 currently 

provides RILA issuers with a limited set of circumstances, none of which are specific or 

generally relevant to RILA offerings, in which a post-effective amendment to a registration 

statement is effective upon filing.336 Rather, when a RILA issuer seeks to update a RILA 

registration statement on Form S-1, the issuer must file a post-effective amendment that is 

typically declared effective by Commission staff acting pursuant to delegated authority.337  

 

333  See rule 485(b)(1)(i). Material post-effective amendments, however, are not immediately effective. See rule 
485(a). 

334  See, e.g., section 10(a)(3) of the Securities Act; rule 415(a); Item 512 of Regulation S-K. 
335  Under Form S-3, the section 10(a)(3) update need not be made through a post-effective amendment. 

Rather, under this form, the section 10(a)(3) update generally occurs when the issuer files its annual report 
on Form 10-K containing the issuer’s audited financial statements for its most recently completed fiscal 
year. 

336  See rule 462(d) and (e). For example, this rule provides that a post-effective amendment that seeks only to 
add exhibits to a registration statement would be effective upon filing. In addition, although a well-known 
seasoned issuer is permitted to file a post-effective amendment to an automatic shelf registration statement 
with immediate effectiveness, none of the insurance companies currently offering RILAs currently claims 
status as a well-known seasoned issuer. 

337  See 15 U.S.C. 77h; 17 CFR 229.501(a); 17 CFR 230.473. See also supra footnote 335 (describing the Form 
S-3 post-effective amendment process). 



194 

In addition to differences in the post-effective amendment process, RILA issuers also 

follow different processes to file prospectuses than current Form N-4 filers, relying on rule 424 

rather than rule 497. Although these rules provide for similar processes, there are certain 

differences. For example, rule 424 requires an issuer to file a prospectus only if the issuer makes 

substantive changes or additions to a previously-filed prospectus, whereas rule 497 requires 

funds to file every prospectus that varies from any previously-filed prospectus.338 Accordingly, 

under the proposed amendments, a RILA issuer would be required to file every prospectus 

relating to a RILA offering that varies in form from a previously filed prospectus before it is first 

used.339 This approach would provide a publicly accessible, usable database of current RILA 

prospectuses which would also assist the Commission in conducting its regulatory functions. In 

addition, rule 424 includes provisions related to continuous or delayed securities offering under 

rule 415.340 However, in light of the proposed amendments to the RILA registration framework, 

these provisions would no longer be applicable to RILAs.341 

Consistent with the other elements of this proposal, the proposed amendments are 

designed to provide parity between RILAs and other annuities registered on Form N-4. RILAs, 

like variable annuities, are longer-term investment products that are continuously offered and 

must maintain a current registration statement and up-to-date prospectus for new investors as 

well as for existing investors that may be able to make additional contributions or reallocate 

assets. Accordingly, applying rule 485’s simplified post-effective amendment process is a more 

 

338  See rule 424(a); rule 497. 
339  See proposed rule 497(e). 
340  See rule 424(b). 
341  See proposed rule 415(b).  



195 

appropriate framework for RILA registration statements in light of their similarity to variable 

annuities. RILA registration statements are routinely updated over the course of an offering and 

may be subject to material and non-material amendments over the long-term nature of the 

investment product. As such, the proposed amendments addressing the post-effective amendment 

process for RILA registration statement should provide benefits to current RILA issuers using 

Form S-1 by reducing administrative complexity when updating financial statements included in 

a registration statement or when making other changes to a registration statement through rule 

485’s provisions for automatic and immediate effectiveness.342 Requiring RILA issuers to rely 

on the simplified post-effective amendment process would enable these issuers to update their 

disclosures in a manner that complements and facilitates RILAs’ offering structure and 

particularly provide efficiency in the context of combination contracts. 

Requiring RILA issuers to rely on rules 485 and 497 also would provide a uniform post-

effective amendment and prospectus filing framework for all issuers using Form N-4 and provide 

insurance companies that may offer one or more related insurance products, including index-

linked options offered as part of combination annuity contracts, consistent filing requirements 

across related products. This should also result in enhanced efficiencies as these issuers would no 

longer be required to manage distinct filing processes for related products. In addition, 

employing the framework provided by rules 485 and 497 would provide Commission staff with 

an increased degree of administrative efficiency by facilitating the review of amendments 

containing material changes to RILA registration statements while permitting amendments with 

non-material changes to become effective immediately. 

 

342  See proposed rule 485. 



196 

We request comment on the proposed application of rules 485 and 497 to RILAs. 

130. Should we require RILA issuers to file post-effective amendments to registration 

statements on Form N-4 under rule 485? Are there additional circumstances not 

currently enumerated in the rule for which we should permit the immediate 

effectiveness of post-effective amendments? 

131. Do commenters agree that the current post-effective amendment process for RILA 

registration statements on Form S-1 may result in increased uncertainty and costs 

for RILA issuers than if the same issuers used the proposed post-effective 

amendment process under proposed rule 485 to amend RILA registration 

statements? Will using the process required by rule 485 mitigate these concerns? 

132. Should we require RILA issuers to file prospectuses and prospectus supplements 

under rule 497 rather than under rule 424? If not, what is a more appropriate 

process for RILA issuers to file prospectuses and prospectus supplements given the 

proposed move of RILA registration statements to Form N-4? 

133. How would RILA issuers be affected by the requirement to file the exact form of 

prospectus under rule 497, given rule 424 only requires filers to file prospectuses 

that contain substantive changes from or additions to a previously filed prospectus? 

134. Are there other filing rules that should be amended to help facilitate the 

movement of RILA registration statements to Form N-4? Is so, please explain what 

rules should be amended and the rationale for the suggested changes.  

3. Prospectus Delivery 

We also propose to prohibit the use of rule 172 in connection with the offering of a 

RILA. Under rule 172, a final prospectus is deemed to precede or accompany a security for sale 

for purposes of Securities Act section 5(b)(2) as long as the final prospectus meeting the 



197 

requirements of Securities Act section 10(a) is filed or the issuer will make a good faith and 

reasonable effort to file it with the Commission as part of the registration statement within the 

required rule 424 prospectus filing timeline.343 

Registered investment companies, including variable annuity separate accounts, are 

excluded from rule 172 and therefore must deliver a prospectus to investors.344 Therefore, we are 

excluding RILA offerings from rule 172 to ensure that investors receive a prospectus about these 

complex investments and because we are proposing to treat offerings of RILAs like offerings of 

variable annuities in other respects. Moreover, we understand that, as a practical matter, RILA 

issuers typically do not rely on rule 172 because RILA issuers typically deliver prospectuses to 

accompany or precede other communications, such as annuity applications, in order to avoid 

those communications being offers that otherwise would be non-conforming prospectuses that 

violate section 5 of the Securities Act.345 

We request comment on excluding RILA offerings from rule 172. 

135. Is our understanding correct that RILA issuers typically deliver prospectuses to 

investors to accompany or precede other communications, and thus do not rely on 

rule 172? If not, in what circumstances to RILA issuers typically rely on rule 172? 

Is there any reason we should permit RILA issuers to rely on rule 172 even though 

issuers cannot rely on the rule for other offerings registered on Form N-4? 

 

343  See Rule 172(b) and (c); see also Offering Reform Release at n.561 and accompanying text. 
344  Id. at section VI.B.1.b. 
345  See section 2(a)(10) of the Securities Act (providing, in part, that a communication sent or given after the 

effective date of the registration statement shall not be deemed a prospectus if it is proved that prior to or at 
the same time with such communication a written prospectus meeting the requirements of section 10(a) was 
sent or given to the person to whom the communication was made). See also Offering Reform Release at 
n.561 (stating that a final prospectus only filed as provided in rule 172 will not be considered to be sent or 
given prior to or with a written offer within the meaning of this clause of section 2(a)(10)). 



198 

F. Materially Misleading Statements in RILA Sales Literature 

We are proposing to amend rule 156 to make its provisions applicable to RILA sales 

literature. Under the Federal securities laws applicable to all securities (including RILA 

offerings), it is unlawful for any person to use materially misleading communications in 

connection with the offer or sale of any security.346 Rule 156 does not prohibit or permit any 

particular representations or presentation, rather it is an interpretive rule that provides factors to 

be weighed in considering whether a statement involving a material fact is or might be 

misleading in the specific context of investment company sales literature for purposes of the 

Federal securities laws, including sales literature relating to the sale of variable annuities. 

Applying this rule to RILA sales literature is consistent with the RILA Act in that it would 

provide RILA issuers guidance on ways to avoid presenting investors with materially misleading 

advertisements, which should help ensure that investors receive the information necessary to 

make informed decisions about these products.347 

Rule 156 provides guidance on whether a statement involving a material fact is 

misleading in sales literature, depending on an evaluation of the context in which it is made, with 

the rule providing four non-exhaustive factors to guide in this determination.348 While these 

factors have some relevance to the marketing of all securities, similarities between variable 

annuities and RILAs (as to how and to whom they are marketed), make the extension of rule 156 

to RILAs particularly appropriate. Like investment company sales literature generally (and 

variable annuity marketing materials particularly), RILA advertisements discuss complex 

 

346  See 15 U.S.C. 77q(a); 15 U.S.C. 78j(b); 17 CFR 240.10b-5. 
347  See Mutual Fund Sales Literature Interpretive Rule, Investment Company Act Release No. 10915 (Oct. 26, 

1979); [44 FR 64070 (Nov. 6, 1979)] (“Rule 156 Release”). 
348  See rule 156(b). 



199 

investment features, and RILA issuers should benefit from rule 156’s contextual analysis in 

considering whether a particular representation is materially misleading. Thus, the proposed 

amendments to rule 156 would help address these concerns by focusing attention to specific 

areas of RILA sales literature that we have identified as being particularly susceptible to 

misleading statements.349  

Commission staff have reviewed RILA advertisements to better understand how 

insurance companies market these products to investors. As part of this review, and based upon 

prior experience reviewing RILA registration statements, the staff identified common RILA 

marketing approaches that could benefit from rule 156’s guidance about advertising statements 

that could be misleading under the Federal securities laws without appropriate context. 

For example, in the sales literature reviewed by the staff, insurance companies typically 

marketed RILAs as growth products based primarily on the linkage to an underlying index. 

Current rule 156(b)(1)(ii) provides that a statement could be misleading because of “[t]he 

absence of explanations, qualifications, limitations or other statements necessary or appropriate 

to make such statement not misleading.” Thus, if rule 156 were applied to RILAs as proposed, 

rule 156 would assist insurance companies in considering whether representations about a RILA 

as a growth product would require qualification in light of particular RILA features, such as the 

existence and extent of any limitations on upside index performance. Representations that 

highlight downside protections of a RILA could similarly be misleading without the context of 

the cost or limitation of those protections (e.g., upside limitations). The same analysis would 

apply to representations that tout customization without discussing the trade-offs associated with 

 

349  See, e.g., Rule 156 Release (Rule 156 is “intended to highlight general areas which, based on the 
Commission’s regulatory experience with investment company sales literature, had proven to be 
particularly susceptible to misleading statements”). 



200 

that customization (e.g., long lock-up periods to get the best rates or having to experience a 

contract adjustment when making a change), or fail to explain that the insurance company has 

reserved the right to change or remove key features of the contract while surrender charges still 

apply. If RILA sales literature discussed these aspects of the contract without adequately 

explaining these limitations or the insurer’s discretion to alter key features, that omission could 

make the advertisement misleading. Accordingly, the application of rule 156(b)(1)(ii) to RILA 

sales literature would require an insurance company to consider whether an advertisement would 

be materially misleading if it suggests a given RILA is a loss-avoidance vehicle or a 

customizable product in the absence of qualifying explanations or statements. Similarly, if sales 

literature advertises a particular feature of the product’s bounded return structure (including, e.g., 

a specified index; an upside feature such as a particular “cap rate” or “participation rate”; or a 

downside feature such as a “floor” or “buffer”) that is not available for the life of the product or 

the full term of any surrender charge period, the rule would require consideration of whether the 

statement is misleading without providing additional context as to the insurer’s discretion. 

As another example, current rule 156(b)(4) provides that “[r]epresentations about fees or 

expenses associated with an investment in a fund could be misleading because of statements or 

omissions made involving a material fact, including situations where portrayals of the fees and 

expenses associated with an investment in the fund omit explanations, qualifications, limitations, 

or other statements necessary or appropriate to make the portrayals not misleading.” While RILA 

investors are not typically charged direct ongoing fees or expenses, RILAs do typically limit an 

investor’s ability to participate in upside performance, and charges like contract adjustments can 

impose costs upon highlighted features such as guaranteed benefits. In the context of RILA sales 

literature, the proposed application of this provision of rule 156 to RILA advertisements would201 

require consideration about whether representations or portrayals either of a RILA’s costs or 

charges (e.g., advertising implying that a RILA had low costs or no ongoing charges), or optional 

benefits that are subject to a contract adjustment, would necessitate qualifying statements or 

explanations regarding the costs or tradeoffs to the investor to receive an advertised benefit or 

those generally associated with the RILA.350 

Lastly, current rule 156(b)(2)(i) states that “[r]epresentations about past or future 

investment performance could be misleading because of statements or omissions made involving 

a material fact, including situations where: [p]ortrayals of past income, gain, or growth of assets 

convey an impression of the net investment results achieved by an actual or hypothetical 

investment which would not be justified under the circumstances, including portrayals that omit 

explanations, qualifications, limitations, or other statements necessary or appropriate to make the 

portrayals not misleading.” In the context of RILA advertising, the proposed provision would 

require consideration of whether illustrations about the operation of a RILA or its features could 

be misleading because, for example, they use assumptions (such as limits on gains or index 

performance that includes dividends whereas the RILA’s index does not include dividends) that 

are not currently offered or exceed what could be reasonably anticipated or use “cherry picked” 

data. Including historical index performance in an advertisement also would mislead investors if, 

for example, it suggested that the performance shown is predictive of future performance of the 

 

350  Insurance companies may apply a contract adjustment to the investors’ account when an investor annuitizes 
or takes advantage of benefits like “free withdrawal” provisions (that typically permit investors to withdraw 
up to 10% of the contract value each year without paying a surrender charge), death benefits, systemic 
withdrawals, and guaranteed benefits. See The Design and Regulatory Framework of Registered Index-
Linked Annuities, ALI CLE Conference on Life Insurance Products 2022 (“It is important to note that 
interim value adjustments may apply to surrenders and all types of ‘withdrawals,’ such as free look 
payments; annuitization; death benefit payments; deductions for third party advisory fees; systemic 
withdrawals; and even income payments under guaranteed benefit riders.”) 



202 

index or a RILA. On the other hand, using the index’s historical performance to illustrate how a 

RILA works in a fair and balanced way (e.g., by showing index performance relative to 

representative limits on gains and losses, as some RILA advertisements currently do) would be 

consistent with the proposed extension of rule 156 to RILA advertisements, assuming those 

advertisements otherwise include appropriate caveats to ensure that the illustrations are not 

misleading.351 Moreover, our preliminary view is that purporting to show the historical 

performance of the RILA or any particular index-linked option itself would generally be 

materially misleading. This is because the terms of a RILA investment, such as limits on gains, 

change frequently, making past performance irrelevant to current investors who are not able to 

utilize those past rates in current market conditions. In addition, to the extent that a RILA is 

using a point-to-point crediting method, that RILA’s return to an investor would be particularly 

sensitive to the specific date the investor purchased the RILA and when the crediting period ends 

for the index-linked option chosen by the investor.352 This further increases the likelihood of a 

current investor’s investment experience deviating from the historical performance of a given 

RILA, even when that RILA had similar terms to those currently offered. Our understanding is 

that insurance companies do not currently advertise the historical performance of the RILA or 

any particular index-linked option itself. 

In addition to rule 156, advertisements and sales literature for existing N-4 issuers is 

subject to 17 CFR 230.482 (“rule 482”). Rule 482 requires, among other things, enhanced 

disclosures in investment company and business development company advertisements designed 

 

351  See rule 156(b)(1)(ii) (statement can be misleading because of “absence of explanations, qualifications, 
limitations or other statements necessary or appropriate to make such statement not misleading”). 

352  See, e.g., OIAD Report at Section 3, Comparing RILA Features, Variations in Term Length and Simulated 
Returns; Section 7, Conclusions, Implications of the Research: The Economics of RILAs. 



203 

to convey balanced information to prospective investors, particularly with respect to 

standardizing representations of a fund’s past performance.353 These provisions were introduced 

as a result of the Commission’s experience with fund advertisements that were creating 

unrealistic or misleading expectations through representations regarding past performance.354 

Accordingly, rule 482 now permits funds to use performance data in their advertisements, but 

only according to standardized methodologies set forth in the rule. Unlike the rules applicable to 

most RILAs, rule 482 also permits registered investment companies and business development 

companies to provide advertisements and sales literature to investors without it being 

accompanied or preceded by a statutory prospectus.355 

While not required by the RILA Act, we nevertheless considered whether RILA 

advertising might raise similar concerns that would justify amending rule 482 to include RILAs. 

As explained below, we have not yet seen sufficient evidence to support an expansion of rule 

482 to RILAs at this time, though we acknowledge such concerns may develop in the future.356 

This conclusion largely follows from the rule’s standardized performance data requirements, 

which do not align with current practices in RILA advertisements. While variable annuity 

marketing materials frequently utilize standardized performance returns, this is not the case with 

RILA advertisements. Rather than relying on past performance, insurance companies typically 

market RILAs on other bases that are less amenable to standardized performance metrics, for 

 

353  See Amendments to Investment Company Advertising Rules, Investment Company Act Release No. 26195 
(Sept. 29, 2003) [68 FR 57760 (Oct. 6, 2003)] (“482 Amendment Release”). 

354  See id. 
355  See 17 CFR 230.433(b)(2). 
356  As a result, RILA sales literature, as “free writing” prospectuses, would continue to be subject to 17 CFR 

230.164 and 17 CFR 230.433, as well as any other applicable rule that permits a communication 
notwithstanding the “gun jumping” provisions of the Securities Act. 



204 

example highlighting that these are flexible products whose features can be customized to fit a 

particular investor’s needs. RILA advertising also typically does not attempt to utilize past 

performance, suggesting there is neither a need for rules prescribing RILA-specific past 

performance metrics, nor sufficient experience to inform the development of such metrics. For 

these reasons, we would not change rule 482 to include RILAs. 

We request comment on the proposed application of rule 156 to RILAs and our proposal 

not to amend rule 482 to include RILAs. 

136. Would the application of rule 156 to RILA sales literature help to prevent or 

address material misstatements in those communications? Is there any other action 

we should take to address this concern? 

137. Are there differences between variable annuities and RILAs that would justify not 

extending rule 156 to RILA sales literature as proposed?  

138. Instead of extending rule 156 to RILAs, should we create a new rule that 

specifically and solely deals with materially misleading information in RILA sales 

literature? If so, what is it about RILAs that necessitates a RILA-specific rule 

about materially misleading sales literature, and what particular areas or topics 

should we address in a RILA-specific sales literature rule? 

139. Do commenters agree with the contextual concerns highlighted above with 

regards to the representations typically used in RILA sales literature? Are there 

other claims or suggestions in RILA sales literature that insurance companies use 

that we should be concerned about?  

140. Do insurance companies currently utilize any performance metrics in RILA 

advertisements? Why do insurance companies not currently utilize past 



205 

performance in RILA sales literature to the same extent as variable annuity 

advertisements? Is there a way to standardize RILA past performance information? 

Is there a way to view RILA past performance information as other than as 

materially misleading? 

141. Do commenters agree that advertising the historical performance of a RILA or 

any particular index-linked option would be misleading in light of the customized 

nature of RILA contracts and the pace at which the RILA features that determine 

RILA performance are subject to change? 

142. Are there benefits to investors in amending rule 482 to include RILA advertising 

materials? If so, how should it be amended? How would we address past 

performance metrics for a RILA in light of the customized nature of RILAs and 

the changing nature of RILA features? 

143. Should we permit insurance companies to provide RILA sales literature to 

investors without being accompanied or preceded by a summary or statutory 

prospectus as variable annuities do? How would insurance companies be able to 

present such a complex product to investors in a way that they can understand? 

G. Existing Commission Letters 

Certain Commission letters, or portions thereof, exempting insurance companies from the 

requirement to provide financial statements prepared in accordance with GAAP in connection 

with the registration of an offering of RILAs on Form S-1 based on the authority provided in 17 

CFR 210.3-13 (“3-13 Exemptions”) would be withdrawn or rescinded in connection with any 

adoption of this proposal in light of the proposed change to permit RILAs to provide SAP 

financial statements on amended Form N-4 in the same way that other insurance companies are 



206 

permitted to do so on current Form N-4.357 Following the compliance date of any final rule, some 

letters, or portions thereof, would be moot, superseded, or otherwise inconsistent with the final 

rule and, therefore, would be withdrawn or rescinded. If commenters believe that additional 

Commission letters or other actions, or portions thereof, should be withdrawn or rescinded, they 

should identify the letter or guidance, state why it is relevant to the proposal, how it or any 

specific portion thereof should be treated, and the reason therefor. Based on the proposal, 3-13 

Exemptions that would be withdrawn or rescinded would include, but would not necessarily be 

limited to, all of the 3-13 Exemptions listed below. 

Table 8: Existing Commission Letters 

Name Date 

Great-West Life & Annuity Insurance Company and Great-West Life & 
Annuity Insurance Company of New York 

9/28/2018 

Athene Annuity and Life Company 9/28/2018 
Allianz Life Insurance Company of North America and Allianz Life Insurance 
Company of New York 

9/28/2018 

MONY Life Insurance Company of America 3/7/2019 
Symetra Life Insurance Company and First Symetra National Life Insurance 
Company of New York 

8/8/2019 

Forethought Life insurance Company 10/17/2019 
Nationwide Life Insurance Company 10/17/2019 
Minnesota Life Insurance Co.  6/11/2020 
MEMBERS Life Insurance Co.  11/6/2020 
Transamerica Life Insurance Company and Transamerica Financial Life 
Insurance Company 

2/11/2021 

Midland National Life Insurance Company 8/12/2021 
Protective Life Insurance Company and Protective Life and Annuity Insurance 
Company 

10/14/2022 

Everlake Life Insurance Company 10/21/2022 

 

357  Rule 3-13 provides, in part, that the “Commission may, upon the informal written request of the registrant, 
and where consistent with the protection of investors, permit the omission of one or more of the financial 
statements herein required or the filing in substitution therefor of appropriate statements of comparable 
character.” We would not be rescinding exemptions provided in any of the letters outlined below provided 
with respect to non-RILA insurance products because they are not affected by this rulemaking. 



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Name Date 

Fidelity & Guaranty Life Insurance Company and Fidelity & Guaranty Life 
Insurance Company of New York 

3/17/2023 

Delaware Life Insurance Company and Gainbridge life Insurance Company 4/28/2023 

We request comment on the proposed recessions. 

144. Are there any other Commission letters or actions that should be rescinded or 

withdrawn if the proposal is adopted?  

145. Are there any staff letters or guidance pieces that would be moot, superseded, or 

otherwise inconsistent with the final rule? 

146. In a future rulemaking, should we consider codification of any 3-13 Exemptions 

that have been granted to other insurance products? If so, what considerations 

should the Commission consider in doing so? 

H. Registered Market-Value Adjustment Annuities 

In addition to RILAs, there are other non-investment company insurance products that 

are securities under the Federal securities laws. Like RILAs, offerings of these securities are 

currently registered by insurance companies on Forms S-1 or S-3. For example, some annuity 

contracts that offer fixed investment options and apply market-value adjustment annuities 

(“MVAs”) to amounts withdrawn from such fixed options before the end of the fixed option’s 

term (e.g., due to contract withdrawals, transfers to other investment options, and annuitization) 

are required to register the MVA with the Commission (“registered MVAs”).358 For these 

annuities, fixed options are either offered on their own or in a combination contract with variable 

options. Like RILAs, a significant feature of a registered MVA is the contract adjustment. 

 

358  Registered MVAs are securities because the MVA feature imposes certain investment risks on purchasers. 
See Section 3(a)(8) of the Securities Act and 17 CFR 230.151; see also SEC v. Variable Annuity Life 
Insurance Co. of America, 359 U.S. 65, 77 (1959). 



208 

Because RILAs and registered MVAs differ only with respect to the manner in which 

interest is calculated and credited, many of the disclosures we are proposing for RILAs on Form 

N-4 would also be appropriate for registered MVAs. This is particularly true of the proposed 

disclosures relating to the operation of contract adjustments, given their importance in both a 

RILA and a registered MVA. 

We are not proposing to require insurance companies to register offerings of registered 

MVAs on Form N-4 at this time because the RILA Act does not address these securities and 

imposes specific timelines for the Commission both to propose rules and to adopt final rules. We 

request comment below, however, on whether we should also require insurance companies to 

register offerings of registered MVAs on Form N-4. To help commenters evaluate these requests 

for comment, we also have analyzed the changes to Form N-4 we believe would be necessary to 

accommodate offerings of these securities:  

• Adding registered MVAs to the list of permissible uses of Form N-4 on the facing page 

and general instructions;359 

• Adjusting the definition of “Contract Adjustment” in the form to account for investment 

options beyond index-linked options; 

• In the discussion of how interest is calculated for the contract’s fixed options in the 

description of the insurance company, registered separate account, and investment 

options, requiring: (1) a statement that an investor could lose a significant amount of 

money due to the contract adjustment if amounts are removed from a fixed option prior to 

the end of its term, (2) a description of the transactions subject to a contract adjustment 

 

359  See, e.g., proposed General Instruction B.1 of Form N-4. 



209 

with cross-references to the related disclosure in the prospectus, and (3) a prominent 

statement of the maximum amount of loss, as a percentage, an investor could experience 

from a negative contract adjustment and that this loss could be greater due to surrender 

charges and tax consequences;360 

• Adjusting the disclosures in the prospectus about contract adjustments in the charges-

related disclosures to account for investment options beyond index-linked options having 

contract adjustments;361 

• In the appendix of available investment options, in the discussion of fixed options, 

requiring: (1) a legend stating that if amounts are withdrawn from a fixed option before 

the end of its term, the insurance company may apply the contract adjustment and that 

this may result in a significant reduction in contract value; and (2) the provision of 

appropriate cross-references to the prospectus disclosure relating to contract 

adjustments;362 

• Requiring registered MVAs to provide the same disclosure proposed for RILAs regarding 

changes in accountants;363 

• Requiring registered MVAs to provide the same census-type information as we are 

proposing for RILAs;364 and 

 

360  See proposed Item 6(e)(2) of Form N-4. 
361  See proposed Item 7(e) of Form N-4. 
362  See proposed Item 17(c) of Form N-4. 
363  See proposed Item 26(c) of Form N-4. As with RILAs, if insurance companies were required to use Form 

N-4 for registered MVAs, they would also be permitted to use SAP in registered MVA registration 
statements to the same degree as other Form N-4 filers. See supra section II.D. If we were to do this, 3-13 
Exemptions provided in connection with registered MVAs would be withdrawn or rescinded for the 
reasons discussed in section II.G above. 

364  See proposed Item 31A of Form N-4. 



210 

• Requiring the same undertakings and exhibits for registered MVAs as we are proposing 

for RILAs.365 

In addition to these changes to Form N-4, if we were to require insurance companies to 

use Form N-4 to register offerings of registered MVAs, we would anticipate providing the same 

functional changes we are proposing for RILAs, that is, the ability to use a summary prospectus 

and the use of the same filing and marketing rules, for the same reason as we are proposing these 

changes for RILAs.366 For example, we could create a defined term “registered market value-

adjusted annuity” in rule 405 that would be an annuity (1) that is deemed a security; (2) that is 

offered or sold in a registered offering; (3) that is issued by an insurance company that is subject 

to the supervision of either the insurance commissioner or bank commissioner of any State or 

any agency or officer performing like functions as such commissioner; (4) not issued by an 

investment company; and (5) whose value may reflect a positive or negative adjustment (based 

on calculations using a predetermined formula, or a change in interest rates, or some other factor 

or benchmark) if amounts are withdrawn before the end of a specified period. We could then use 

this definition to apply to registered MVAs those Securities Act rules we propose to apply to 

RILAs.367 We would also expect to have the same requirements as to the use of Inline XBRL for 

similar reasons.368 

 

365  See proposed Items 27(q) and 34(b) of Form N-4. 
366  See supra sections II.C, E, and F. 
367  This definition mirrors that of “registered index-linked annuity” we are proposing to add to rule 405 for 

RILAs, other than the last provision which borrows from the definition of “contract adjustment” we are 
proposing to add to Form N-4. We could also consider creating a defined term in rule 405 that combines 
both the RILA and registered market-value adjusted annuity definitions for simplicity. 

368  See supra section II.B.9. 



211 

We request comment on whether to require insurance companies to register the offering 

of registered MVAs on Form N-4. 

147. Would it be appropriate to require insurance companies to register the offering of 

registered MVAs on Form N-4 (as proposed to be as amended in this proposal)? 

Should all of the changes suggested above apply to registered MVAs?  

148. Is the definition of “registered market-value adjusted annuity” included above as 

an example the correct one? 

149. Are there any other disclosures that would be relevant in the registered MVA 

context? 

I. Technical Amendment to Form N-6 

The Commission is proposing a technical amendment to Form N-6 to reflect the correct 

placement of an amendment to this form that the Commission adopted in 2020 in the release 

titled “Facilitating Capital Formation and Expanding Investment Opportunities by Improving 

Access to Capital in Private Markets” (herein referred to as the “Exempt Offering Framework 

Adopting Release”).369 In that release, the Commission adopted, among other amendments, 

amendments to certain instructions associated with the Exhibits items of Form N-4 and Form N-

6. The amendatory instructions in the Exempt Offering Framework Adopting Release 

erroneously referred to outdated Exhibits items of these forms. That is, the amendatory 

instructions referred to Items 24 and 26 respectively, instead of Items 27 and 30 respectively (as 

adopted by the Commission in earlier amendments to Forms N-4 and N-6 in the VASP Adopting 

 

369  Facilitating Capital Formation and Expanding Investment Opportunities by Improving Access to Capital in 
Private Markets, Investment Company Act Release No. 34082 (Nov. 2, 2020) [86 FR 3496 (Jan. 14, 
2021)]. 



212 

Release).370 The amendments we are proposing to Form N-4 correctly reflect the placement of 

the amendment that the Commission adopted in the Exempt Offering Framework Adopting 

Release in Item 27 of the form instead of in Item 24. We are also proposing a technical 

amendment to Item 30 of Form N-6 that correctly reflects the placement of the amendment that 

the Commission adopted in the Exempt Offering Framework Adopting Release in this item 

instead of in Item 26. 

J. Compliance Period 

We are proposing a compliance date one year after publication of final amendments in 

the Federal Register.371 All initial registration statements and post-effective amendments that are 

annual updates to effective registration statements on Form N-4 that are filed after the 

compliance date would be required to comply with the amendments. This compliance period is 

designed to give registrants sufficient time to comply with the proposed changes, including to 

update their registration statements; to prepare to use rules 485 and 497 to update their 

registration statements and file prospectuses with the Commission; and to begin paying securities 

registration fees on Form 24F-2. 

RILAs that have previously registered offerings of securities on Forms S-1 or S-3 would 

file a post-effective amendment to their registration statement pursuant to rule 485(a) at the time 

of their next annual update following the compliance date, using Form N-4.372 In appropriate 

 

370  See Exempt Offering Framework Adopting Release at amendatory instructions 50 and 51; see also VASP 
Adopting Release at section II.C.4 (Table 6). 

371  This compliance period would apply for all of the amendments in this release other than the technical 
amendment to Form N-6 discussed in section II.I supra. 

372  A post-effective amendment filed under rule 485(a) [17 CFR 230.485(a)] generally becomes effective 
either 60 days or 75 days after filing, unless the effective date is accelerated by the Commission. RILA 
registrants generally should be able to rely on template filing relief, in which case they would not need to 
file a rule 485(a) filing for each RILA. See proposed amended rule 485(b)(1)(vii). Existing RILA issuers 
 



213 

circumstances, we would consider requests by registrants with respect to existing variable 

annuity contracts to file post-effective amendments pursuant to Securities Act rule 485(b)(1)(vii) 

when these post-effective amendments make conforming changes to comply with the proposed 

amendments to Form N-4.373  

We also are proposing to provide a six-month delayed effective date for all amendments 

except for the amended Form N-4, amended rule 498A, and technical amendments to Form N-6, 

such that all other final amendments would be effective six months after publication in the 

Federal Register. Thus, we propose that a registrant would be able to rely on rule 498A to satisfy 

its obligations to deliver a RILA contract’s statutory prospectus beginning on the effective date 

of the rule amendments, provided that the registrant is also in compliance with the amendments 

to Form N-4. The delayed effective date for remaining amendments would provide the 

Commission time to prepare the EDGAR system to accommodate transitioning RILA offerings 

onto the proposed framework.374  

 

that only issue RILAs and will be using the same CIK would be permitted to transition by filing a 
485APOS or 485BPOS in EDGAR. Both of these submission types allow the entity to keep its current 
Securities Act file number, and both allow the filer to obtain new contract IDs and the needed Form N-4 
investment company type designation in EDGAR. RILA issuers that will be acquiring new CIKs for their 
RILA offerings would need to transition by filing an administrative Form N-4 submission under a newly-
issued CIK to obtain a new Securities Act file number, new contract IDs, and the Form N-4 investment 
company type (which is used for EDGAR purposes only). 

373 A post-effective amendment filed under rule 485(b) may become effective immediately upon filing. A post-
effective amendment may be filed under rule 485(b) if it is filed for one or more specified purposes, 
including to make nonmaterial changes to the registration statement. A post-effective amendment filed for 
any purpose not specified in rule 485(b) generally must be filed pursuant to rule 485(a). Under rule 
485(b)(1)(vii), the Commission may approve the filing of a post-effective amendment to a registration 
statement under rule 485(b) for a purpose other than those specifically enumerated in the rule. The 
Commission’s staff has been delegated the authority to approve registrants’ requests under rule 
485(b)(1)(vii). 17 CFR 200.30-5(b-3)(1). 

374  There would be no transition period associated with the technical amendment to Form N-6 discussed in 
section II.I supra.  



214 

We are not delaying the effective date of the proposed changes to Form N-4 and rule 

498A, however, to allow registrants to begin filing registration statements under the revised form 

as soon as possible. We believe allowing registrants to use the new form as soon as possible 

following the Commission’s adoption of final amendments is consistent with Congress’s intent 

in directing the Commission to prepare and finalize a new form for RILAs within 18 months of 

enactment.  

We request comment on the proposed compliance period: 

150. Would the proposed compliance period provide registrants sufficient time to 

prepare to comply with the amendments? Would more time be appropriate or, 

conversely, should we provide a shorter compliance period to ensure that investors 

receive the benefit of the proposed amendments more quickly?  

151. Should we provide a separate compliance period to provide more time for 

insurance companies to comply with the requirement to structure certain disclosure 

in Inline XBRL? For example, should we provide an additional year period after 

the date insurance companies are required to first update their disclosure? 

152. Is it appropriate to permit a registrant to rely on rule 498A to satisfy its 

obligations to deliver a RILA contract’s statutory prospectus beginning on the 

effective date of the rule amendments, provided that the registrant is also in 

compliance with the amendments to Form N-4?  

K. General Request for Comment from Retail Investors 

We are requesting input from the retail investor community relating to the experiences of 

seeking information about, and investing in, a RILA. We understand that RILAs are typically 

sold to retail investors. This, together with the congressional mandate to design disclosure 

requirements for RILAs with the goal of ensuring that key information is conveyed in terms a 



215 

purchaser is able to understand, makes feedback from retail investors particularly relevant as we 

consider the disclosures that would be required in a RILA registration form.375 Specifically, we 

invite retail investors seeking to comment on their feedback with annuities generally and RILAs 

in particular to submit a short Feedback Flyer, available at Appendix D. 

III. ECONOMIC ANALYSIS 

A. Introduction 

We are mindful of the costs imposed by, and the benefits obtained from, our rules. 

Section 3(f) of the Exchange Act, section 2(b) of the Securities Act, and section 2(c) of the 

Investment Company Act state that when the Commission is engaging in rulemaking under such 

titles and is required to consider or determine whether the action is necessary or appropriate in 

(or, with respect to the Investment Company Act, consistent with) the public interest, the 

Commission shall consider whether the action will promote efficiency, competition, and capital 

formation, in addition to the protection of investors. Further, section 23(a)(2) of the Exchange 

Act requires the Commission to consider, among other matters, the impact such rules would have 

on competition and states that the Commission shall not adopt any rule that would impose a 

burden on competition not necessary or appropriate in furtherance of the purposes of the 

Exchange Act.  

We are proposing amendments to our rules designed to carry out the requirements of 

Section 101(b) Division AA, Title I of the Consolidated Appropriations Act, 2023, to establish a 

registration form for RILAs. The Commission is proposing to amend the form currently used by 

most variable annuity separate accounts, Form N-4, to require issuers of RILAs to register 

 

375  See supra discussion accompanying and following footnote 7.  



216 

offerings on that form as well. To facilitate this amendment, the Commission is also proposing to 

amend certain filing rules and make other related amendments. In addition, we are proposing 

other amendments to Form N-4 that would apply to all issuers that use that form. We are also 

proposing to apply a current Commission rule that provides guidance as to when sales literature 

is materially misleading under the Federal securities laws to RILA advertisements and sales 

literature. 

While the Commission has developed a set of specific registration forms for variable 

insurance contracts, RILA issuers cannot use those forms because a RILA issuer is not an 

investment company. Currently, insurance companies register the offerings of RILAs on the 

Securities Act registration forms that are typically used to register traditional debt or equity 

offerings, Forms S-1 and S-3. Because Forms S-1 and S-3 are not tailored to the particular 

characteristics of RILAs (or indeed insurance products more generally), these forms include a 

number of disclosure requirements that may be less material to investors when evaluating an 

insurance product like a RILA and do not include line-item requirements mandating RILA-

specific information that is of importance to investors in these products. The inclusion of 

disclosures that are of little relevance to investors and the omission of information that is of 

importance to investors limits the usefulness of the information investors currently receive about 

RILAs and thus their ability to make informed investment decisions. In addition, Forms S-1 and 

S-3 require the use of GAAP financial statements, rather than the SAP financial statements that 

the State insurance regulators require. SAP financial statements, which focus on an issuer’s 

ability to meet its obligations under its insurance contracts, as regulated by State law, appear to 

provide sufficient material information for investors evaluating RILAs. Investors may also 

benefit from the lower cost burdens on issuers provided by the use of SAP financial statements, 



217 

to the extent that those savings are passed along to investors. The proposed rule would increase 

the usefulness of the information provided to current and prospective investors in RILAs by: 

• Adapting the existing registration and disclosure framework for variable insurance 

contracts to accommodate RILAs; 

• Requiring RILA-specific disclosure requirements in Form N-4, including disclosures 

specific to the underlying investment options, such as, for each available index-linked 

option, the index, crediting period, and index crediting methodology; 

• Proposing amendments to Form N-4 based on our experience in administering the form 

and in reaction to our observations of investor testing, which would be applicable to all 

issuers that use this registration form and which are designed to improve disclosures; 

• Switching the order of the Key Information Table and Overview of the Contract items;  

• Utilizing a question and answer format for the Key Information Table; 

• Removing an instruction that permits registrants to omit additional disclosure in the 

prospectus that repeats information disclosed in the Overview of the Contract or the Key 

Information Table; and 

• Extending the current rule providing factors to be weighed in considering whether a 

statement involving a material fact is or might be misleading in the specific context of 

investment company sales literature to RILAs, in order to address misleading statements 

about RILA fees, product features, and certain performance presentations in RILA sales 

literature. 

We have considered the potential costs and benefits that would result from the proposed 

rules, as well as the potential effects on efficiency, competition, and capital formation. Certain 

potential economic effects of the proposed rule would stem from the statutory mandate, while 



218 

others would stem from the discretion we are exercising. We discuss the potential economic 

effects of the proposed amendments in section III.C. We also consider certain alternatives to our 

proposed approach to implementing the statutory mandate, as discussed in section III.E. We note 

that, where possible, we have attempted to quantify the costs, benefits, and effects on efficiency, 

competition, and capital formation expected to result from the proposed rule. In some cases, 

however, we are unable to quantify the economic effects because we lack the information 

necessary to provide a reasonable and reliable estimate. Nevertheless, as described more fully 

below, the Commission is providing both a qualitative assessment and quantified estimate of the 

economic effects, where feasible. The Commission invites commenters to include estimates and 

data that could help it form useful estimates of the economic effects of the proposed 

amendments. 

B. Baseline 

1. Affected Parties 

The proposed rule would affect issuers of and investors in RILAs, as well as issuers of 

and investors in variable annuities that are registered on Form N-4.  

a. The Market for Annuity Products 

As of January 2023, there were 90 RILAs registered with the Commission issued by 23 

insurance companies.376 Among the 90 RILAs, 50 are stand-alone RILA products, while 40 are 

combination contracts that offer index-linked options as well as variable options. The number of 

RILAs registered with the SEC on Form S-1 is 52, while the remaining 38 are registered on 

 

376  Based on analysis of Forms S-1, S-3 and POS AM filed by RILA issuers. 



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Form S-3. A little over half of the registered RILAs (47 RILAs) report SAP financials, with the 

remainder (43 RILAs) reporting GAAP financials.377  

RILA contracts currently offer a variety of index-linked options. Specifically, RILA 

contracts that are currently registered with the Commission offer index-linked options whose 

returns are linked, in part, to between two and nine indices with an average among RILAs of 4.3 

indices.378 The indices associated with current RILA contracts commonly include the S&P 500, 

Russell 2000, and NASDAQ-100. RILA contracts offer index-linked options with less well 

known indices and ETFs as well, but with much less frequency.379 

As discussed in Section I, index-linked options whose returns are based, in part, on the 

same index may nevertheless have different elements that contribute to an investor’s returns. 

Notably, different index-linked options whose returns are linked to the same index may offer 

different crediting periods (the set length of time for measuring growth of contract value based 

on the performance of the linked index—for example, one or three years), crediting 

methodologies, and buffer or floor levels. RILAs that are currently registered with the 

Commission offer between 4 and 64 index-linked options, with an average of 22.8 index-linked 

options. Common crediting periods include one, two, three, and six years, with one year being 

most common. In the past, index-linked options with terms as long as 10 years have been 

offered, although the longest index-linked option term currently offered is six years. For those 

“combination” contracts that offer index-linked options and variable options, the number of 

 

377  EDGAR Database. Certain Commission letters, or portions thereof, exempt insurance companies from the 
requirement to provide financial statements prepared in accordance with GAAP in connection with the 
registration of an offering of RILAs on Form S-1. See Section II.G. 

378  Data obtained from Forms S-1, S-3 and POS AM filed by RILA issuers. 
379  Data obtained from Forms S-1, S-3 and POS AM filed by RILA issuers. 



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variable options ranges from 1 to 100, with an average of 10.4 variable options. The most 

common variable option is a money market fund – in all instances of combination contracts, a 

money market fund (or, in one case, a similar liquid investment) is offered as a variable option.  

Table 9 provides information on the dollar amount of RILA sales from 2016 to 2022.380 

RILA sales have increased from $7.3 billion in 2016 to $41.1 billion in 2022, which represents a 

463% increase between these two years.  

Table 9: Sales of RILAs, 2016-2022 

 2016 2017 2018 2019 2020 2021 2022 

Sales of RILAs 
($ billions) 

7.3 9.0 11.2 17.4 24.1 38.7 41.1 

Source: Fact Tank: Sales Data, LIFE INSURANCE MARKETING AND RESEARCH ASSOCIATION, 
https://www.limra.com/en/newsroom/fact-tank/ (using data from the U.S. Individual Annuity Sales surveys for 
Q4 for each year from 2016 through 2022). 

 

A recent survey of insurers found that 85% of respondents believed in 2021 that RILA 

sales would increase by 10% or more over the next three years, 10% believed that RILA sales 

would increase by less than 10%, while 5% believed that RILA sales would remain the same 

over that time period. No respondents indicated that they believed RILA sales would decrease.381 

When surveyed about the factors driving the growth in RILA sales, the three most commonly 

cited reasons were: (1) increased understanding of RILAs among advisers and broker-dealers 

(85%), (2) the entrance of large, reputable insurers into the RILA market (80%), and (3) 

 

380  Fact Tank: Sales Data, LIFE INSURANCE MARKETING AND RESEARCH ASSOCIATION, 
https://www.limra.com/en/newsroom/fact-tank/ (using data from the U.S. Individual Annuity Sales surveys 
for Q4 for each year from 2016 through 2022). 

381  Cerulli Associates & Insured Retirement Institute, Custom Key Findings, U.S. Annuity Markets 2021: 
Acclimating to Industry Trends and Changing Demand Ex. 1 (2021) (“Cerulli Report”), available at 
https://www.irionline.org/wp-content/uploads/2022/02/IRI-Key-Findings_2021_Final_12622.pdf  

https://www.limra.com/en/newsroom/fact-tank/
https://www.limra.com/en/newsroom/fact-tank/
https://www.irionline.org/wp-content/uploads/2022/02/IRI-Key-Findings_2021_Final_12622.pdf221 

increased supply due to the entrance of large issuers and distributors of RILAs (80%).382 

Respondents also indicated that they expected to see the largest increases in sales among the 

following distribution channels: independent agents or broker/dealers, captive insurance agents, 

regional broker/dealers, and wirehouses.383 RILAs were also the product most insurers indicated 

had “tremendous” growth potential over the near term. 384  

As of 2019, there were a total of 2,396 unique variable annuity products offered by a total 

of 33 companies.385 Net assets totaled $2,018.0 billion. Also in 2019, variable annuity sales 

totaled $98.3 billion.386 Of the total sales, $62.8 billion (64% of total sales) were annuities within 

qualified plans and $35.5 (36%) were non-qualified annuities.387 Investors purchased annuities 

across various distribution channels – captive agents, $34.5 billion, (35% of total sales); 

independent financial planners/NASD firms, $39.2 billion (40%); banks/credit unions, $9.2 

billion (9%); wirehouses/regional broker-dealers, $12.6 billion (13%); and direct response, $2.8 

billion (3%).388  

b. Issuing Insurance Companies 

 

382  Id. at Exhibit 2.      
383  Id. at Exhibit 3. Other RILA distribution channels include: brokerage general agencies/independent 

marketing organizations, registered investment advisers, and direct sales. 
384  Cerulli Report at Exhibit 5.  
385  See Insured Retirement Institute Retirement Fact Book 2020 (“IRI Fact Book”). In 2018 (the last year for 

which this information is available in the 2020 edition), the total number of variable annuity contracts in 
force was 17.9 million, with an average individual contract value of $113,053.   

386  Id. 
387  Id. 
388  Id. 



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The number of insurance companies currently offering securities registered as RILAs 

with the Commission is 23, from 19 insurance company complexes. Out of these 23 insurance 

companies, 15 of them register RILAs on Form S-1, while the remaining 8 use Form S-3.389 

 Insurance companies offer, on average, 4 RILA contracts, ranging from a maximum of 

11 RILAs to a minimum of 1 RILA. The top two issuers offer 21 RILAs in total, or 29% of the 

number of existing RILA products.390 

c. Investors 

In 2021 there were an estimated 83 million individuals aged 45–64 and 56 million 

individuals aged 65 or older in the United States, representing 25 percent and 17 percent of the 

total population, respectively.391 The number of individuals age 65 or older is projected to be 65 

million (19 percent of the total projected population) in 2025, 78 million (21 percent of the 

projected population) in 2035, 83 million (22 percent of the projected population) in 2045, and 

90 million (24 percent of the projected population) in 2055.392  

Individuals that are planning for, or are already in, retirement face increasing challenges 

with respect to achieving their income goals for retirement. First, people are living longer. 

Second, traditional defined-benefit retirement systems that provide guaranteed income are being 

replaced with defined-contribution systems that require people to accumulate their own 

 

389  Data obtained from Forms S-1, S-3 and POS AM filed by RILA issuers. 
390  Calculated using data obtained from Forms S-1, S-3 and POS AM filed by RILA issuers. 
391  Annual Estimates of the Resident Population for Selected Age Groups by Sex for the United States: Apr. 1, 

2020, to July 1, 2021 (NC-EST2021-AGESEX). We do not have demographic data on RILA investors. A 
2013 survey found that 86 percent of individual annuity investors purchased their first annuity before ag 65, 
including 47% who were between the ages of 50 and 64 years old.  The average age of investors at first 
purchase of an annuity is 51. The average current annuity investor age is 70. See The Gallup Organization 
and Mathew Greenwald & Associates for The Committee of Annuity Insurers, Survey of Ownership of 
Individual Annuity Contracts (2013).   

392  Projected Age Groups and Sex Composition of the Population: Main Projections Series for the United 
States, 2017-2060. U.S. Census Bureau, Population Division: Washington, DC. 



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retirement savings.393 Evidence suggests that, on average, individuals may not be saving 

appropriately to meet their retirement goals. For example, one survey found that while 74 percent 

of individuals are saving for retirement: (1) 51 percent of older individuals have less than 

$50,000 saved for retirement, (2) 57 percent of individuals save less than 10 percent of their 

income, and (3) 33 percent of individuals save less than 5 percent of their income.394 In addition 

to the finding that individuals may not be saving an appropriate amount for retirement, there is 

also concern that individuals may not be taking on an appropriate amount of financial risk.395  

Investors may not be saving appropriately to meet their retirement goals for several 

reasons. For example, individuals may face meaningful burdens (e.g., search costs) when trying 

to identify appropriate investments or savings products. Once identified, investors may face 

additional burdens (e.g., acquiring and analyzing large amounts of information) to determine 

which specific investments or saving products among the ones identified allow investors to best 

meet their savings goals.396 Second, improving technology has permitted the development of 

more complex and confusing financial products.397 As a result of the burden associated with 

identifying appropriate investments, as well as the burden of acquiring and analyzing 

 

393  John Y. Campbell, Restoring Rational Choice: The Challenge of Consumer Financial Regulation (NBER 
Working Paper No, 22025, 2016), available at http://www.nber.org/papers/w22025 (“Campbell Paper”). 

394  Insured Retirement Institute, Retirement Readiness Among Older Workers 2021 (2021) (“IRI Survey”), 
available at https://www.irionline.org/wp-content/uploads/legacy/default-document-library/iri-retirement-
readiness-2021_fullreport.pdf. 

395  See Campbell Paper. Campbell argues that individuals take too little financial risk and that the willingness 
to take financial risk varies with wealth—individuals with greater wealth are willing to take on more 
financial risk than individuals with less wealth. 

396  John Y. Campbell, Howell E. Jackson, Brigitte C. Madrian, and Peter Tufano, Consumer Financial 
Protection, 25 J. ECON. PERSPECTIVES 91 (2011) (“Campbell et al. Paper”). Campbell et al. note that 
making decisions about financial products often requires considerable information on terms and conditions, 
particularly for financial decisions that are undertaken only infrequently.   

397  See Campbell Paper. 

http://www.nber.org/papers/w22025
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224 

information to choose among the set of appropriate investments, investors may spend less time 

and effort (i.e., resources) than is required to make appropriate investment decisions.  

Investors may not be saving appropriately for other reasons, as well. For example, some 

investors may not make the appropriate decisions for themselves even if they were presented 

with all the information that was required to make a decision. Decision making limitations may 

be particularly problematic in the context of saving for retirement because learning from 

experience is difficult. Investing in retirement products is only done infrequently and the 

outcomes from investing decisions are delayed, perhaps for decades, and are subject to large 

random shocks, so that personal experience is slow to accumulate and is contaminated by noise. 

Also, financial innovation can reduce the relevance of an investor’s prior experiences. For 

example, prior experience investing in investment vehicles with unbounded returns would be less 

relevant for investing in RILAs (which have bounded returns) than it would be for investing in 

variable annuities (which have unbounded returns).398 Another possibility is that investors may 

 

398  See Campbell et al. Paper. The Campbell Paper identifies five aspects of “financial ignorance” that may 
lead to poor investor decision making. First, investors may lack understanding of basic concepts necessary 
to make appropriate decisions. For example, investors appear to lack an understanding of diversification 
and the tradeoff between risk and return. Second, investors may not understand the terms of financial 
contracts. Third, it appears that, rather than using all available historical data to form views about future 
returns on alternative strategies, investors rely on their own specific experiences to form an opinion. 
Fourth, individuals appear to not understand their own difficulties with financial decision making. Finally, 
investors appear to not understand the incentives faced by other parties and the effect these incentives have 
on their strategic behavior. Other studies suggest poor investment decisions may result from investor 
uncertainty and lack of investor familiarity with different assets. For example, individuals may not invest 
appropriately because individuals are unable, given historical experience, to form precise estimates of how 
they expect assets to perform in the future. See, e.g., Raymond Kan and Guofu Zhao (2007). Optimal 
Portfolio Choice with Parameter Uncertainty, Journal of Financial and Quantitative Analysis, 27(3), 621-
656.  Rather than being unable to form precise estimates of how they expect assets to perform in the future, 
investors may not have, perhaps due to not having the requisite experience, the ability to form any 
expectation about how they expect an asset to perform in the future.  If investors’ ambiguity is great 
enough, they simply may choose not to invest in particular assets. See, e.g., David Easley and Maureen 
O’Hara (2009). Ambiguity and Nonparticipation: The Role of Regulation, Review of Financial Studies, 
22(5), 1817-1843. Finally, investors may make poor investment decisions because they choose to 
overweight investment in assets with which they are familiar, and underweight, or exclude, investment 
assets with which they are less familiar. See, e.g., Gur Hubberman (2001). Familiarity Breeds Investment, 
 



225 

have preferences that lead them to favor present consumption over future consumption (“present-

biased preferences”) and, as a result, they save an inappropriate amount for retirement.399 

Finally, many people have a limited financial capacity to save, particularly individuals already 

burdened with student loans and mortgages. 

2. Current Regulatory Requirements 

As discussed in section I above, RILAs are securities for purposes of the Securities Act, 

and public offerings of RILAs, therefore, must be registered with the Commission.400 Unlike 

variable annuity contracts for which the Commission has adopted a specific registration form 

tailored to those products, insurance companies register RILA offerings on Form S-1 or Form S-

3.  

Form S-1 is available to any issuer (except foreign governments and issuers of asset-

backed securities) to register securities for which no other registration form is authorized or 

prescribed. A registration statement on Form S-1 contains extensive disclosure about all aspects 

of the issuer’s business and financial condition and consists of two parts: a prospectus (Part I), 

and additional information not required to be included in the prospectus (Part II), but that is 

publicly available on the Commission’s EDGAR website. Form S-1 allows incorporation by 

reference only on a very limited basis. The prospectus must contain financial statements meeting 

the requirements of Regulation S-X, which generally includes audited financial statements 

 

Review of Financial Studies, 14(3), 659-680 and Massimo Massa and Andrei Simonov (2006). Hedging, 
Familiarity, and Portfolio Choice, Review of Financial Studies, 19(2), 633-685.         

399  See Campbell et al. Paper. Campbell et al. note that individuals with present-biased preferences favor 
present consumption which can lead an individual to make decisions today that reduce their future welfare 
in a way that the individual later regrets. 

400  See supra footnote 5 and accompanying text. 



226 

prepared in accordance with GAAP.401 Currently, disclosures about RILA offerings are largely 

unstructured. The audited financial statements in the prospectus, if prepared in accordance with 

GAAP, must be tagged in Inline XBRL if the Form S-1 contains a price or a price range.402 Form 

S-1 must be declared effective by the Commission before any sales of the registered securities 

may be made. The time required for Commission review will depend on the number and 

complexity of Commission comments and the issuer’s ability to adequately address those 

comments. The issuer must pay the Commission registration fee before it files a Form S-1. The 

amount of the fee is based on the proposed maximum aggregate offering price.403 The issuer 

must indicate the amount of each type of security being registered and calculate the fee payable 

for each security.  

Form S-3 is a “short-form” registration statement under the Securities Act that can be 

used by companies that have been subject to reporting obligations under the Exchange Act for at 

least one year and that satisfy certain other requirements.404 Reporting obligations under the 

 

401  Certain Commission letters, or portions thereof, exempt insurance companies from the requirement to 
provide financial statements prepared in accordance with GAAP in connection with the registration of an 
offering of RILAs on Form S-1. As discussed in Section III.B.1.a, 47 RILAs report SAP financials. 

402  See 17 CFR 229.601(b)(101)(i)(B). 
403  Generally, Form S-1 (or S-3) fees paid for a withdrawn registration statement are available to the issuer for 

use with its future registration statements. The amount available for use as an offset under rule 429 under 
the Securities Act equals the portion of the filing fee paid that is associated with any unsold securities of the 
same class registered on an earlier registration statement. Once a filing fee has been used as an offset, those 
unsold securities on the earlier registration statement are deemed deregistered. RILAs are continuously 
offered to investors, who in many cases are long-term investors that may make additional allocations or 
other investment decisions with respect to an investment in a RILA. Because RILA investors may make 
additional allocations or other investment decisions with respect to an investment, unless a prior RILA 
offering is completely unsold, RILA issuers may have increased difficulty in using filing fees associated 
with unsold securities of a prior offerings.       

404  The issuer must be either organized under U.S. law with its principal business operations in the United 
States or a foreign private issuer that reports under the Exchange Act using the domestic reporting forms. 
The issuer must have a class of securities registered under section 12(b) or 12(g) of the Exchange Act, or be 
required to file reports under section 15(d) of the Exchange Act. The issuer must have been subject to the 
reporting requirements of the Exchange Act and have filed all reports and materials required under sections 
 



227 

Exchange Act include audited financial statements prepared in accordance with GAAP and 

structured in Inline XBRL. A registration statement on Form S-3 contains extensive disclosure 

about all aspects of the issuer’s business and financial condition and consists of two parts: a 

prospectus which includes, either directly or incorporated by reference from the issuer’s 

Exchange Act filings, detailed information about the issuer (Part I), and additional information 

not required to be included in the prospectus (Part II), but that is publicly available on the 

Commission’s EDGAR website.  

Registration using Form S-3 offers issuers advantages over registration using Form S-1. 

First, Form S-3 allows significant incorporation by reference, which allows for shorter 

prospectuses and makes Form S-3 easier to complete. Also, Form S-3 also allows for forward 

incorporation by reference, eliminating the need to file post-effective amendments to keep 

registration statements current.  

A Form S-3 filed by a non-WKSI must be declared effective by the Commission. A Form 

S-3 receives either a full review, a targeted review of one or more sections of the registration 

statement, or no review. Commonly, a full review takes approximately 30 days with targeted 

reviews taking less time. The time to resolve any Commission comments will depend on the 

number and complexity of the Commission’s comments. An issuer must pay Commission filing 

fees before it files Form S-3. The amount of the filing fee is based on the proposed maximum 

aggregate offering price. 

 

13, 14, and 15(d) of the Exchange Act for the 12 calendar months preceding the filing of Form S-3, and, 
with certain exceptions, must have timely filed all such reports and other materials required to be filed 
during the 12 calendar months and any portion of a month immediately preceding the filing of the 
registration statement. An issuer that meets all of the requirements of Form S-3 and that has a public float 
of $75 million or more (i.e., “seasoned issuers”) may use Form S-3 to register any offering of debt or equity 
for cash.   



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Under the Federal securities laws applicable to all securities (including RILA offerings), 

it is unlawful for any person to use materially misleading communications in connection with the 

offer or sale of any security.405 Rule 156 is an interpretive rule that provides factors to be 

weighed in considering whether a statement involving a material fact is or might be misleading 

in the specific context of investment company sales literature, including literature relating to the 

sale of variable annuities. 

As discussed in section I above, in 2022 Congress enacted the RILA Act directing the 

Commission to adopt a new registration form for RILAs within 18 months of enactment (i.e., the 

end of June 2024). If the Commission fails to adopt the form by the end of June 2024, the RILA 

Act provides that issuers can begin registering the offering of RILAs on Form N-4. 

3. Market Practice 

Annuities can play a role in helping investors save for retirement and receive guaranteed 

lifetime income during retirement.406 There are multiple types of annuities available to help 

investors who have different financial goals or tolerances for risk save for retirement: fixed 

annuities, variable annuities, and RILAs. Fixed annuities offer investors preservation of their 

investment by guaranteeing a minimum rate of return, but with little opportunity for asset 

growth. During the accumulation phase,407 a traditional (i.e., book value) fixed annuity offers 

 

405  See 15 U.S.C. 77q(a); 15 U.S.C. 78j(b); 17 CFR 240.10b-5. 
406  Id. The IRI Fact Book argues that annuities give investors the ability to create their own pensions. The IRI 

Fact Book also argues that, unlike mutual funds, annuities offer a wide variety of guarantees to protect an 
investor’s investment. For example, death benefits provide principal protection in the event that an investor 
dies during a market downturn.   

407  During the accumulation phase, also called the savings phase, capital builds up. In this phase, the investor 
pays premiums into the contract to accumulate assets. See IRI Fact Book. 



229 

investors a fixed rate of return (known in advance) for a given period of time.408 A market value 

adjusted annuity (see section II.H) is similar to a traditional annuity, but the assets are subject to 

a market value adjustment based on interest rate changes.409 Fixed index annuities guarantee a 

certain rate of return,410 but also provide the potential for (limited) additional returns based on 

the performance of a specified market index.411  

Variable annuities accumulate savings based on the performance of the underlying 

investment options chosen by an investor. Typically, investors are able to choose among 

investment options that pass on the returns of a wide variety of mutual funds such as equity 

funds, bond funds, funds that combine equities and bonds, actively managed funds, index funds, 

domestic funds, and international funds.412 Depending on the investment options chosen, 

variable annuities can offer investors the greatest opportunity for asset growth, but they also can 

involve the greatest amount of investment-based risk, compared to other types of annuities.413 

 

408  Id. The IRI Fact Book also notes that fixed annuities involve less investment risk because they offer a 
guaranteed minimum rate of interest. The minimum rate is not affected by fluctuations in market interest 
rates. 

409  Id. The IRI Fact Book contends that fixed index annuities are designed for investors who want to partake in 
the benefits of a market-linked vehicle with a protected investment floor if there is a downturn in the index. 

410  Currently, insurance companies with a minimum A.M. Best Insurance Ratings of A- offer fixed rate 
annuities that guarantee between 3.70% and 5.40% for a three-year period, and between 3.20% and 5.25% 
for a ten-year period. Multi-Year Guarantee Annuities (MYGA), ANNUITY ADVANTAGE (accessed Aug. 
17, 2023, and filtered by “State” of “- All”; “Min AM Best” of “A-”; “Years” of “10”; and “Range” of 
“Exact”), https://www.annuityadvantage.com/annuity-rates-quotes/multi-year-guarantee-
annuities/?rating=4&years=10&pos=300&sort=guarantee_period_yield&limit=all.  

411  IRI Fact Book. 
412  Id. 
413  Additionally, variable annuities often involve direct fees, such as insurance charges, and indirect expenses, 

including management and other fees and expenses associated with the underlying mutual funds in which 
the variable annuity subaccounts invest. See IRI Fact Book. 

https://www.annuityadvantage.com/annuity-rates-quotes/multi-year-guarantee-annuities/?rating=4&years=10&pos=300&sort=guarantee_period_yield&limit=all
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RILAs are an index-linked product that can be purchased by individual investors as part 

of both qualified and non-qualified retirement accounts.414 RILAs combine features of fixed-

index annuities and variable annuities. RILAs limit or reduce downside risk in return for an 

investor accepting limited upside performance. In exchange for giving up the complete 

protection of principal offered by fixed annuities, a RILA investor is potentially afforded greater 

upside potential than that provided by fixed annuities, though typically less than the potential 

upside of investing in the same index within a variable annuity.415 RILAs allow investors some 

ability to customize a level of risk with which they are comfortable.416 Like other annuities, 

RILAs have an accumulation phase followed by a payout phase. The accumulation phase is 

divided into one or more crediting periods.417 Also like other annuities, after a “surrender 

charge” period (generally, 3 to 10 years following an investor’s last premium payment), 

investors can usually surrender their contract at the end of any crediting period and receive full 

account value.418 Investors, however, may lose money if they withdraw early from an investment 

option or from the contract, as explained in section I.A above. 

At the end of a crediting period, the issuer credits a RILA investor’s contract value with 

“interest” (which can be either positive or negative) that is based on the performance of a 

 

414  Thorsten Moenig, It's RILA Time: An Introduction to Registered Index-Linked Annuities, 89 J. RISK & INS. 
339 (2022) (“Moenig Paper”). 

415  See IRI Fact Book. 
416  Id. The IRI Fact Book also contends that historically investors generally fell into one of two camps: those 

willing to exchange safety of principal for modest returns, and those able to tolerate the higher risk of being 
invested in securities in exchange for greater upside potential. RILAs address a developing demand for 
products that allow investors some ability to customize a level of risk with which they are comfortable. 
Structured annuities (i.e., RILAs) meet the needs of the in-between investor who wants some degree of 
certainty but also desires some upside potential.   

417  Id. 
418  Id.   



231 

specified index, subject to restrictions on the upside, through a cap and/or “participation rate,” as 

well as some form of downside protection.419 If the index declines, the credited loss is lessened 

by either a floor (a maximum loss percentage), a buffer (index losses are credited to the RILA 

investor’s contract value only when they exceed a certain threshold), or a downside participation 

rate (the loss credited to contract value is a certain percentage of the index loss).420 RILA 

downside protection mechanisms typically do not change over time, whereas issuers may, and 

likely will, change upside limits on gains for both new contracts as well as existing contracts to 

reflect changing market conditions.421 If a RILA contract offers downside protection in the form 

of a floor, then the increased volatility would expose the issuer to greater downside risk. To 

offset the increased downside risk, an issuer might choose to reduce its upside risk by lowering 

cap rates.422 If the RILA contract offers downside protection in the form of a buffer, then 

increased volatility would expose the issuer to reduced downside risk. The reduced downside 

risk might cause issuers to increase cap rates.423 

Also, unlike variable annuities, most RILAs do not include any direct ongoing fees or 

charges to the investor. Insurance companies, however, can benefit from offering RILAs in at 

least three ways. First, insurance companies can benefit from a favorable imbalance between the 

downside protections that a RILA contract offers, and the upside limits the contract offers.424 

 

419  Id. 
420  Id. The Moenig Paper argues that RILAs are structurally similar to fixed-index annuities except that RILAs 

may credit negative returns. A fixed-index annuity can be viewed as a special case of a RILA with a floor 
of 0%. The insurer provides full protection on the index return in exchange for a low cap rate (commonly 
between 2% and 4%). 

421  See Moenig Paper.  
422  Id. 
423  Id. 
424  Id.  



232 

That is, insurance companies set the level of upside limits such that their value (to the issuer) 

exceeds the cost of providing the downside protection mechanism to investors.425 One study 

estimates an average annual cost to investors from the imbalance between the downside 

protections that a RILA contract offers and the upside limits is approximately 0.17% of the RILA 

investment amount.426 To assess if the findings of the study continue to be relevant for the 

current RILA market, the staff conducted an independent analysis of RILA contract terms. 

Specifically, staff examined 24 one-year term rates linked to the S&P 500 index, Nasdaq 100 

index, Russell 2000 index, and MSCI EAFE.427 These rates were offered by three insurance 

companies across a two-week interval.428 In particular, staff calculated the fair value of the 

portfolio, composed of a risk-free zero-coupon bond with one-year maturity and a collection of 

hypothetical index options with one-year expiration that would replicate the promised payoff for 

 

425  We understand that for shorter crediting periods and for common indexes such as the S&P 500, insurance 
companies are able to use exchange-traded derivative securities to closely approximate the insurer’s 
liabilities from a RILA contract at the end of each crediting period. For example, for a RILA with both a 
floor and a cap, the insurance company can hedge its liability by purchasing a call option (with an 
appropriate strike price given the floor) and selling a call (with a higher strike price that is dependent on the 
cap). The insurance company can offer a cap such that the proceeds from selling the call with the higher 
strike price exceed the cost of purchasing the call option with the lower strike price. For a RILA with a 
downside buffer (as opposed to a floor) and a cap, the process for insurance companies to hedge their 
liabilities is similar, but with a different mix of options. In the case of a RILA with a downside buffer and a 
cap, the insurance company would purchase a call option, sell a call option (with a higher strike price), and 
selling a put option (with a lower strike price, as appropriate given the downside buffer). In this case, the 
insurance company can offer a cap such that the proceeds from selling the call and the put exceed the cost 
of the call option with the lower of the two strike prices.         

426  See Moenig Paper; Public Filings on EDGAR.  
427  The staff obtained the term rates from Rates: Current rates for Allianz Index Advantage ADV Variable 

Annuity, ALLIANZ, https://www.allianzlife.com/what-we-offer/Annuities/registered-index-linked-
annuities/index-advantage-adv/rates (visited Sept. 14, 2023); Variable Annuities, EQUITABLE, 
https://equitable.com/retirement/products/variable-annuities (click “View Performance Cap Rates”) (visited 
Sept. 14, 2023); Nationwide Defender Annuity, NATIONWIDE (Sept. 1, 2023),  (visited Sept. 14, 2023).. 

428  Each contract designates a distinct set of buffer and cap rates with no additional features. The sample 
period spans from September 5 to 15, 2023. The Moenig Paper cited an industry survey as a source for the 
data in its analysis.  We understand that the industry survey cited does not contain updated product-level 
contract-level details beyond the data cited in the Moenig Paper. We request comment on data sources 
(e.g., pricing vendors) that should be considered for these calculations.  See infra section III.F. 

https://www.allianzlife.com/what-we-offer/Annuities/registered-index-linked-annuities/index-advantage-adv/rates
https://www.allianzlife.com/what-we-offer/Annuities/registered-index-linked-annuities/index-advantage-adv/rates
https://equitable.com/retirement/products/variable-annuities


233 

each contract.429 Staff used the Black-Scholes formula for European options to derive fair prices 

of these hypothetical index options. In estimating the implied volatility for each specific strike 

price, staff utilized an estimated one-year volatility surface.430 The volatility surface estimates 

the values for implied volatility across a range of standardized options with varying implied 

strike prices, including both calls and puts. Staff then linearly interpolated between the implied 

volatilities with implied strikes adjacent to the strike price of each hypothetical option to obtain 

the implied volatility. This implied volatility is used as an input in the Black-Scholes formula to 

derive the fair values of the options.431 Staff assumed that the options expire in exactly one year. 

The annual cost of each contract is defined as the difference between the par value and the 

calculated risk-neutral fair price of the contract, divided by the par value.432 

Table 10 presents the mean and median annual costs for each of the twenty-four contracts 

during the sample period. The annual costs hover around zero for all contracts. The mean annual 

costs are positive for nearly all of the contracts, ranging from 0.04% for contract 22 and 0.93% 

for contract 20, but negative for others, such as contract 1, contract 2, contract 3, and contract 16.  

These results are consistent with the Moenig Paper’s findings of a mean cost of 0.17%. 

Table 10: Pricing of twenty-four sample RILA contracts 

 

429  More specifically, the options position encompasses a long At-the-Money (ATM) call option, coupled with 
a short Out-the-Money (OTM) call option with strike price equal to the index value increased by a factor of 
the cap rate and a short OTM put option with strike price equal to the index value decreased by a factor of 
the buffer rate. 

430  The volatility surface data is obtained through IvyDB OptionMetrics. 
431  The other model inputs – the end-of-day S&P 500 index value and the risk-free interest rate – are obtained 

through IvyDB OptionMetrics. 
432  The staff incorporated any explicit annual product fee charged by the insurance company into the cost 

calculation. This analysis could be extended to incorporate several additional factors that differentiate the 
RILA from the replicating strategy that would be priced in a market. For example, it does not consider any 
effective difference to the investor in liquidity because of early withdrawal charges or penalties, differences 
in portfolio value prior to maturity, death benefits, or specific crediting methods. We request comment on 
these aspects of pricing of RILA contracts below. See infra section III.F. 



234 

  Mean Median  

Contract 1 -0.30% -0.30%  

Contract 2 -0.64% -0.64%  

Contract 3 -0.30% -0.29%  

Contract 4 0.57% 0.61%  

Contract 5 0.34% 0.34%  

Contract 6 0.37% 0.50%  

Contract 7 0.42% 0.44%  

Contract 8 0.39% 0.40%  

Contract 9 0.60% 0.58%  

Contract 10 0.72% 0.74%  

Contract 11 0.51% 0.46%  

Contract 12 0.09% 0.09%  

Contract 13 0.22% 0.22%  

Contract 14 0.24% 0.25%  

Contract 15 0.35% 0.36%  

Contract 16 -0.08% -0.11%  

Contract 17 0.16% 0.11%  

Contract 18 0.12% 0.13%  

Contract 19 -0.08% -0.22%  

Contract 20 0.93% 0.93%  

Contract 21 0.63% 0.64%  

Contract 22 0.04% 0.04%  

Contract 23 0.33% 0.33%  

Contract 24 0.38% 0.38%  
Note: The table summarizes the annual costs for each of the twenty-four contracts offered by three insurance 
companies during a two-week interval. See Rates: Current rates for Allianz Index Advantage ADV Variable 
Annuity, ALLIANZ, https://www.allianzlife.com/what-we-offer/Annuities/registered-index-linked-annuities/index-
advantage-adv/rates (visited Sept. 14, 2023); Variable Annuities, EQUITABLE, 
https://equitable.com/retirement/products/variable-annuities (click “View Performance Cap Rates”) (visited Sept. 
14, 2023); Nationwide Defender Annuity, NATIONWIDE (Sept. 1, 2023), 
https://nationwidefinancial.com/media/pdf/VAM-3629AO.pdf (visited Sept. 14, 2023). At the end of each 
business day, we employ a market price approach to compute the fair value of each contract. We then compare 
the fair value to the par value to derive the annual cost and incorporate any explicit product fee. Subsequently, we 
compute the mean and median annual costs for each contract over the two-week measurement period. 

Also, we understand that, generally, insurance companies can benefit from offering 

RILAs by investing RILA proceeds into fixed-income securities such as corporate bonds, 

thereby earning a “credit risk premium.” Further, insurance companies can benefit when a RILA 

offers index-linked options whose index for measuring performance is a price-based index that 

does not account for dividend payments. For example, if an investor chooses an index-linked 

https://www.allianzlife.com/what-we-offer/Annuities/registered-index-linked-annuities/index-advantage-adv/rates
https://www.allianzlife.com/what-we-offer/Annuities/registered-index-linked-annuities/index-advantage-adv/rates
https://equitable.com/retirement/products/variable-annuities
https://nationwidefinancial.com/media/pdf/VAM-3629AO.pdf


235 

option whose performance is based, in part, on the S&P 500 Price Return Index, the credited 

return may be based on the point-to-point change in the S&P 500, which does not include the 

dividend payments of the underlying stocks.433 The excluded dividends can act as an implicit 

“fee” on investors with the magnitude of the implicit fee being comparable to average dividend 

rates among the underlying index stocks.434  

While most RILAs do not include any explicit ongoing fees or charges to the investor, 

RILAs typically have charges for early or mid-term withdrawals. As discussed in section 

II.B.2.a, charges for early or mid-term withdrawals could include, surrender charges, contract 

adjustments, and transaction charges (separate from surrender charges).435    

RILAs differ from other annuity contracts in other ways as well. Variable annuities 

involve a direct investment of premiums into subaccount(s) that correspond to one, or more, of 

many mutual funds. RILA premiums, on the other hand, are not directly invested into the assets 

of the underlying index, and typically investors can only choose among index-linked options 

whose returns are based on a small number of mainstream indexes.436 Also, the financial 

guarantees common to variable annuities are long term and are only applied when the contract 

terminates, either at maturity or due to the investor’s death, or if the account value reaches zero 

due to guaranteed withdrawals.437 These factors make variable annuity guarantees difficult to 

 

433  See supra footnote 431. 
434  Id. The Moenig Paper provides the following example. If stock prices rise by 7% on average over the 

crediting period, in addition to paying 2% in dividends, then the RILA account would be credited 7%, even 
though investors in the underlying stocks would earn a 9% return. Omitting dividend payments benefits 
insurers by reducing the cost of providing a given amount of downside protection (e.g., through lower 
option prices). 

435  See also supra footnote 431. 
436  See Moenig Paper. 
437  Id. 



236 

value and hedge due to their long-term nature (potentially 25 years, or more).438 The guarantees 

that RILA contracts offer as part of their bounded return structure, on the other hand, are short-

term (i.e., they are limited to the crediting period of the index-linked option the investor selects, 

which is usually one, two, three, or six years) and tied to the performance of a common index, so 

that issuers can hedge the embedded liabilities accurately through the financial markets.439  

Further, guarantees that RILA contracts offer may be much less dependent on investor 

behavior than variable annuity guarantees. Variable annuity investors may have a strong 

incentive to surrender or exchange their policy when an embedded guarantee loses its value (i.e., 

moves “out of the money”).440 The guarantees RILA contracts offer reset with the end of the 

crediting period of the index-linked option the investor selects, so such guarantees are more 

commonly “at the money” and investors do not have as strong of an incentive to surrender or 

exchange their policies.441  

Additionally, RILAs and variable annuities differ with respect to their use of proceeds. 

As discussed in Section II.B.4, variable annuity proceeds are held in separate accounts and, 

therefore, insulated from the issuer’s creditors. Variable annuity proceeds in unitized sub-

accounts must be invested as the investor chooses and returns are credited to the account directly. 

Like variable annuity proceeds, RILA proceeds are placed into a (non-unitized) separate account. 

As a result, the proceeds are not insulated from the issuer’s creditors. Also, RILA proceeds can 

be invested as the issuer sees fit.  

 

438  Id. 
439  Id. 
440  Thorsten Moenig and Nan Zhu (2018). Lapse-and-Reentry in Variable Annuities, Journal of Risk and 

Insurance, 85(4), 911-938 (“Moenig and Zhu Paper”). 
441  See Moenig Paper. 



237 

 We understand that for index-linked options offering shorter crediting periods, and 

whose returns are based on common indexes such as the S&P 500 Index, insurance companies 

are able to invest RILA proceeds in exchange-traded derivative securities that closely 

approximate the issuer’s liabilities from a RILA contract at the end of each crediting period.442 In 

doing so, insurance companies are able to hedge away their risk at a low cost. Further, we 

understand that insurance companies can, and do, invest the remaining proceeds into fixed-

income securities (e.g., corporate bonds) that allow them to earn a “credit risk premium.”443 The 

credit risk premium can be an important source of benefits to issuers.444 

C. Benefits and Costs  

1. Benefits 

a. Use of Form N-4 

Unlike variable annuity offerings that are registered on Form N-4, insurance companies 

register RILA offerings on Forms S-1 or S-3. These forms include a number of disclosure 

requirements that are specific to the insurance company issuing the RILA that the Commission 

does not require in the registration statements for offerings of variable annuities.  

We are proposing that insurance companies use Form N-4 to register the offering of 

RILAs and we are proposing to adapt Form N-4 for that purpose.445 Because it is an existing 

form, we believe RILA issuers and investors are familiar with Form N-4. As a result of 

expanding the scope of Form N-4 to address RILAs, RILA offerings would be registered on the 

same form as variable annuities. Requiring that insurance companies register RILA offerings on 

 

442  Id. 
443  Id. 
444  Id. 
445  See proposed General Instruction B.1 of Form N-4. 



238 

Form N-4 would leverage insurance-product specific disclosure requirements reflected in the 

form and also would permit the summary prospectus layered disclosure framework the 

Commission adopted in 2020 for variable annuities.  

The following sections discuss the specific benefits deriving from the contents and 

requirements of the form in detail. In addition to these benefits, expanding the scope of Form N-

4 to include RILAs would benefit investors by making it easier for them to evaluate and compare 

RILAs, and also to compare other annuity products with RILAs. For example, investors may 

require less effort to evaluate and compare annuity products that register using the same form. To 

the extent that investors require less effort to evaluate and compare these annuity products, 

investors may be more likely to make decisions that better align with their investment goals.  

b. Contents of Form N-4 

The proposal is designed to facilitate the Commission’s goal it sought to achieve in 

adopting Form N-4, namely to help investors make an informed investment decision regarding 

the annuity products that are registered on that form. The registration process on Form N-4 uses 

a layered disclosure approach designed to provide investors with key information relating to the 

contract’s terms, benefits, and risks in a concise and more reader-friendly presentation, with 

access to more detailed information for those investors who want it. Providing investors with key 

information is particularly important in the context of annuity contracts since their structure is 

typically more complex than other types of investment products commonly sold to retail 

investors. 

Specifically, the proposal would update the contents of Form N-4 to specifically address 

RILAs, including by: (1) amending the form’s general instructions; (2) amending the 

requirements for front and back cover pages; (3) updating the Key Information Table; (4) 

providing new principal disclosures regarding RILA investment options; and (5) providing for 



239 

new contract adjustment and fee disclosures. The proposal would also include certain other 

technical and conforming amendments to Form N-4 and related rules designed to accommodate 

the inclusion of RILA offerings on that form as well as requiring the insurance company to 

provide disclosure in response to the remaining items on Form N-4 to the extent applicable.   

(1) General Instructions 

The proposal would require RILA offerings registered on Form N-4 to comply with the 

general instructions of that form, including requirements related to: (1) using document design 

techniques that promote effective communication, (2) organizing information to make it easier 

for investors to understand, (3) including information in the prospectus or SAI not otherwise 

required so long as the additional information is not incomplete, inaccurate, or misleading, and 

does not obscure or impede understanding of the information that is required, (4) requiring Form 

N-4 filers to define special terms used in the prospectus in any presentation that clearly conveys 

meaning to investors, (5) allowing insurance companies to describe multiple contracts that are 

essentially identical in a single prospectus, (6) making available the dates of both the prospectus 

and SAI, (7) providing an interactive data file related to certain information on the form, (8) 

requiring insurance companies to include active hyperlinks, or other means of facilitating access 

that leads directly to the relevant website, for an electronic version of the prospectus, and (9) the 

use of incorporation by reference. The general instructions are designed to require clear and 

consistent disclosure to investors about annuity contracts currently registered on the form and to 

make clear how filers must prepare and file their registration statements.  

We believe clear disclosure benefits investors by making it easier for investors to 

evaluate and compare offerings. Concise and decision-useful disclosures can help facilitate the 

investment decision-making process. Also, the presentation of information in a consistent 



240 

manner could facilitate not only the evaluation and comparison among RILA offerings, but also 

could facilitate the comparison of RILAs to other annuity products.446 Further, certain investors, 

while aware of variable annuities, simply may not be aware of RILAs as an investment option. 

Presentation of information in a consistent manner on Form N-4 could increase investor 

awareness of RILAs as an investment option.     

(2) Front and Back Cover Pages 

The proposal would make certain changes to information currently required on the front 

and back pages of a prospectus for all registrants on Form N-4. Like variable annuities registered 

on Form N-4, RILAs would be required to present certain information on the front and back 

cover pages of the prospectus. The proposal would require several new cover page disclosures 

for all Form N-4 issuers. One of these would provide additional information distinguishing 

among the investment options available in the annuities registering on Form N-4 and cross-

reference the prospectus appendix that provides additional information about each option. These 

changes could help investors better understand what investment options are available under the 

contract, in an easily identifiable location. Also, the proposal would require the inclusion of three 

new legends that highlight risks that are particularly prevalent in RILAs. The new legends that 

highlight risk that are particularly prevalent in RILAs should benefit investors by putting them 

on notice of these key considerations at the outset, helping the investor make informed decisions. 

(3) Key Information Table 

As required for current Form N-4 issuers, the proposal would require RILA issuers to 

provide a Key Information Table in their registration statements. The KIT includes a summary of 

 

446  The consistent presentation of information also could facilitate information collection by third parties such 
as investment advisers and data aggregators who could then, in turn, provide information to investors.241 

five areas: (1) fees and expenses, (2) risks, (3) restrictions, (4) taxes, and (5) conflicts of interest. 

The KIT is important summary disclosure for investors that is included in the prospectus, and the 

proposed amendments to the KIT requirements are intended to highlight important 

considerations related to RILAs, including certain unique and/or opaque aspects of RILAs.447 

Consistent with our layered disclosure approach for variable annuities registered on Form N-4, 

RILA issuers would be required to provide cross-references in the KIT to the location in the 

statutory prospectus where the subject matter is described in greater detail. Certain of the 

amended KIT requirements would apply to all Form N-4 issuers. In particular, in a change from 

the current KIT requirements for Form N-4 issuers, the amendments would require that 

responses in an item be presented in a Q&A format.448 In a change for all Form N-4 issuers, the 

proposal also would change the order in which the KIT appears relative to the Overview of the 

Contract disclosures in the prospectus.  

Overall, the proposed KIT requirements (like the current KIT requirements for variable 

annuities) are designed to provide a brief description of key facts about a RILA in a specific 

sequence and in a standardized presentation that is designed to be easy to read and navigate. We 

believe that a standardized presentation that is designed to be easy to read and navigate benefits 

investors by making it easier for investors to evaluate and compare RILA offerings. Also, the 

standardized presentation of information could facilitate not only the evaluation and comparison 

 

447  Many of the summary points presented in the KIT are discussed in greater detail in other parts of the form. 
In this way, the KIT is an integral part of the layered disclosure approach the Commission traditionally has 
taken with annuity products. To ensure that the KIT serves this function effectively, we also are proposing 
to delete Form N-4’s general instruction stating that where the discussion of information required by the 
Overview of the Contract (currently Item 3) or KIT (currently Item 2) also responds to the disclosure 
requirements in other items of the prospectus, registrants need not include additional disclosure in the 
prospectus that repeats the information disclosed in the Overview of the Contract or the KIT. See infra 
footnote 84 and accompanying text.  

448  Currently, such format is suggested but not required. See General Instruction C.3.(c) of Form N-4. 



242 

among RILA offerings, but also could facilitate the comparison of RILAs to other annuity 

products.  

(4) Principal Disclosure Regarding RILA Offerings 

The proposal would amend Form N-4 to require disclosure that would provide investors 

with information about all annuities whose offerings are registered on Form N-4 as well as with 

specific information about RILAs and the index-linked options available under the RILA 

contracts. With regard to Form N-4 issuers generally, the proposal would require registrants to 

disclose investment option risk, early withdrawal risk, contract benefits risk, insurance company 

risk, and the risk of contract changes. With regard to specific information about RILAs, the 

proposal includes requirements related to: (1) information about RILAs generally and an 

overview of certain key elements of any index-linked option offered under the contract; (2) a 

more in-depth description of index-linked investment options available under the contract; (3) 

the inclusion of an appendix that consolidates certain summary information related to index-

linked options and fixed options available under the contract (which would accompany similar 

information about variable options offered under a “combination” contract); and (4) certain 

principal risk disclosures relating to investing in the RILA contract that the prospectus describes.  

The proposed disclosure requirements are designed to provide additional information 

regarding the risk of investing in Form N-4 issuers generally, as well as the unique aspects of 

RILAs and certain summary and detailed information about index-linked options available under 

a RILA contract. The information could benefit investors by making it easier for investors to 

evaluate and compare variable annuity products registered on Form N-4. The required disclosure 

relating to index-linked and fixed options available under a contract could benefit investors by 



243 

facilitating the comparison of these investment options to other investment options available 

under the contract, as well as to investment options that other RILA contracts offer.    

(5) Addition of Contract Adjustments and Other Amendments to Fee and Expense 

Disclosures 

RILA investors have the ability to take a withdrawal or transfer out their money before 

the end of a crediting period. If amounts are removed from an investment option before the end 

of a crediting period, typically an insurance company will apply an interim value adjustment to 

the investor’s contract value. The IVA, which will adjust the contract value based on a formula, 

can move up and down as market conditions change throughout the crediting period and may 

adjust daily. The IVA is irrelevant if the investor does not move money from an investment 

option until the end of the crediting period, but it becomes relevant if the investor withdraws or 

transfer the money before the end of a crediting period. Similarly, a positive or negative market 

value adjustment could apply if amounts are partially or fully withdrawn from the contract before 

the end of a specified period. These contract adjustments, whose calculation varies by insurance 

company, may have a positive or negative effect on the value of the contract. 

We propose amendments to Form N-4 to require specific disclosures with respect to 

contract adjustments. Currently, Form N-4 requires variable annuity registrants to provide 

comprehensive information on the fees and expenses that investors will pay when buying, 

owning, and surrendering a contract, including expenses paid each year during the time the 

investor owns the contract. Although RILAs typically do not charge the explicit fees and 

expenses common to variable annuities, they do typically utilize contract adjustments. Since 

negative adjustments may result in substantial costs to investors, we believe that it is important to 

include a detailed description of contract adjustments in the registration statement. 



244 

Specifically, we are proposing to expand current disclosure requirements to address 

contract adjustments that could affect investors’ contract value when buying, owning, and 

surrendering or making withdrawals from an investment option. We are also proposing certain 

other specific disclosures about contract adjustments, such as requiring disclosures about the 

maximum potential loss that an investor could experience in connection with a negative contract 

adjustment. 

We believe that these disclosures would benefit investors since they would be able to 

better evaluate the costs of purchasing and owning annuity contracts, including RILAs. In 

addition, these disclosures can make less-informed investors aware of RILAs’ unique 

characteristics, which could increase investor understanding of RILAs as an investing option. 

(6) Other Amendments to Form N-4 

The proposal would include certain other amendments to Form N-4 and related rules 

designed to accommodate the inclusion of RILA offerings on Form N-4. These include 

amendments to Form N-4’s facing sheet, definitions, exhibit list, and required representations, as 

well as amendments to certain Securities Act rules that help to implement the proposal. Because 

these other amendments to Form N-4 and related rules are designed to accommodate the 

inclusion of RILA offerings on Form N-4, the benefits that could accrue as a result of these other 

amendments are those that result from RILA issuers registering offerings on Form N-4 rather 

than Form S-1 or Form S-3.  

The proposal would also amend Form N-4’s required exhibits list to add new Item 27(p) 

for all issuers, which would require the filing of any power of attorney included pursuant to rule 

483(b). While this exhibit is already required to be filed with a Form N-4 registration statement 

under rule 483(b), practices differ in regard to the placement of a required power of attorney 



245 

exhibit within the exhibit list. This amendment would benefit investors in comparing these 

exhibits for all annuity products whose offerings are registered using Form N-4 by standardizing 

the location of these exhibits in the registration statement. Facilitating the comparison of annuity 

products could benefit investors by helping them to invest in RILAs in a manner that is 

consistent with their overall financial needs and objectives. 

We are also proposing to add new Item 31A in Form N-4 to require census-type 

information on RILAs offered in connection with the applicable registration statement. Under 

this proposed new item, an insurance company would have to provide information regarding any 

RILA offered through the registration statement, as of the most recent calendar year-end, 

including (1) the name of each contract; (2) the number of contracts outstanding; (3) the total 

value of investor allocations attributable to index-linked options; (4) the number of contracts sold 

during the prior calendar year; (5) the gross premiums received during the prior calendar year; 

(6) the amount of contract value redeemed during the prior calendar year; and (7) whether the 

contract is a combination contract. The information in new Item 31A would help the 

Commission and staff in identifying trends in insurance companies’ offerings of RILAs and have 

a more complete understanding of the marketplace for annuity securities. 

We also propose amendments to Item 34 of Form N-4 to require RILA issuers to include 

two specific undertakings in their registration statements on Form N-4: (1) to file, during any 

period in which offers or sales are made, through a post-effective amendment to its registration 

statement, any prospectus required by section 10(a)(3) of the Securities Act and, (2) that, for the 

purposes of determining liability under the Securities Act, each post-effective amendment shall 

be deemed to be a new registration statement relating to the securities offered therein, and the 

offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. 



246 

These proposed undertakings are the same as two undertakings RILA issuers currently provide in 

registration statements. We believe that it remains appropriate for RILA issuers to continue to 

furnish these representations concerning post-effective amendments to a registration statement 

as, under the proposed amendments, RILAs may be continuously offered on a registration 

statement for an indefinite amount of time. 

(7) Remaining Items 

The proposal would require RILA issuers to provide disclosure in response to the 

remaining items on Form N-4 to the extent applicable. These are items that we have previously 

determined are relevant in the context of variable annuity offerings. Requiring RILA filers to 

provide disclosure in response to the remaining items on Form N-4 to the extent applicable 

would help ensure that comparable information is provided in a standardized, consistent manner 

for all filers using Form N-4.  

We believe standardized, consistent disclosure of comparable information benefits 

investors by making it easier for investors to evaluate and compare RILA offerings. Also, the 

presentation of information in a standardized, consistent manner across all filers using Form N-4 

could facilitate not only the evaluation and comparison among RILA offerings, but also could 

facilitate the comparison of RILAs to variable annuities. Further, certain investors, while aware 

of variable annuities, simply may not be aware of RILAs as an investment option. Presentation 

of information in a standardized, consistent manner on Form N-4 could increase investor 

awareness of RILAs as an investing option. Facilitating the comparison of annuity products 

could benefit investors by helping them to invest in RILAs in a manner that is consistent with 

their overall financial needs and objectives. 

(8) Inline XBRL 



247 

The proposal would require many of the newly added disclosures on Form N-4 to be 

structured (i.e., tagged) in Inline XBRL, a structured, machine-readable data language.449 In 

addition, RILA issuers would have to tag those prospectus disclosures that Form N-4 currently 

requires to be tagged. 

Currently, disclosures about RILA offerings are largely unstructured; only the insurance 

company’s financial statements, if reported in GAAP and included in a registration statement 

that includes a price or price range, are required to be tagged in Inline XBRL.450 Certain of the 

existing disclosures on Form N-4 are required to be tagged in Inline XBRL.451 

The proposed tagging requirements are designed to make the tagged disclosures more 

readily accessible for aggregation, comparison, filtering, and other analysis. As a point of 

comparison, XBRL requirements for public operating company financial statement disclosures 

have been observed to improve investor understanding of the disclosed information.452 While 

those observations are specific to operating company financial statement disclosures (including 

footnotes), and not to disclosures on Form N-4, they indicate that the proposed Inline XBRL 

requirements would provide investors with increased insight into key features of the contract that 

 

449  See supra section II.B.9.. 
450  See supra footnote 402. 
451  Currently tagged disclosures include: Item 2 (Key Information), Item 4 (Fee Table), Item 5 (Principal Risks 

of Investing in the Contract), Item 10 (Benefits Available under the Contract), and Item 17 (Portfolio 
Companies under the Contract). See Instruction C.3.h of Form N-4; 17 CFR 232.405(b)(2)(iii).  

452  See, e.g., Birt, J., Muthusamy, K. & P. Bir, XBRL and the Qualitative Characteristics of Useful Financial 
Information, 30 ACCOUNT. RES. J. 107 (2017) (finding “financial information presented with XBRL 
tagging is significantly more relevant, understandable and comparable to non-professional investors”); 
Cahan, S.F., Chang, S., Siqueira, W.Z. & K. Tam, The roles of XBRL and processed XBRL in 10-K 
readability, J. BUS. FIN. ACCOUNT. (2021) (finding 10-K file size reduces readability before XBRL’s 
adoption since 2012, but increases readability after XBRL adoption, indicating “more XBRL data improves 
users’ understanding of the financial statements”); Efendi, J., Park, J.D. & C. Subramaniam, Does the 
XBRL Reporting Format Provide Incremental Information Value? A Study Using XBRL Disclosures 
During the Voluntary Filing Program, 52 ABACUS 259 (2016) (finding XBRL filings have larger relative 
informational value than HTML filings). 



248 

is described in the Form N-4 registration statement. For example, the data tagging could allow 

third parties such as financial data aggregators to efficiently compare and otherwise process the 

disclosed information into analyses accessible to investors. 

c. Option to Use a Summary Prospectus 

We are proposing to amend rule 498A to permit RILA issuers, as well as issuers of 

“combination contracts” offering a combination of index-linked options and variable options, to 

use a summary prospectus to satisfy statutory prospectus delivery obligations. Investors would 

continue to have access to the RILA statutory prospectus and other information about the RILA 

contract online, with paper or electronic copies of this information upon request. The current 

summary prospectus rule for variable contracts uses a layered disclosure approach designed to 

provide investors directly with key information relating to the contract’s terms, benefits, and 

risks in a concise and reader-friendly presentation, with more detailed information available 

elsewhere. The proposed amendments to rule 498A would broaden the scope of the rule to 

address RILA contracts.  

As discussed in section II.C above, the proposed amendments to rule 498A would 

involve the use of two distinct types of summary prospectuses for RILA contracts, employing the 

same approach the rule currently uses for variable contracts. An “initial summary prospectus,” 

covering contracts offered to new investors, would include certain key information about the 

contract’s most salient features, benefits, and risks, presented in plain English in a standardized 

order. The rule amendments would also require “updating summary prospectuses” to be provided 

to existing investors in RILA contracts. The updating summary prospectus would include a brief 

description of certain changes to the contract that occurred during the previous year, as well as a 

subset of the information required to appear in the initial summary prospectus. Certain key 



249 

information about the index-linked options that the contract offers as investment options would 

be provided in both the initial summary prospectus and updating summary prospectus.  

The proposed rule would create a choice for insurance companies. They may meet their 

prospectus delivery obligations by providing the statutory prospectus, or they may satisfy these 

obligations by providing a summary prospectus and making statutory prospectuses and other 

required documents available online. Those insurance companies that expect to benefit by 

providing summary prospectuses would choose to rely on the proposed amendments to meet 

their prospectus delivery obligations. Those insurance companies that do not expect to benefit 

from this optional prospectus delivery regime would choose to continue to provide statutory 

prospectuses to investors. 

The presentation proposed for the initial summary prospectus may also reduce the 

investor effort required to compare RILA contracts, to consider different index-linked options 

that a RILA offers, or to compare RILA contracts with each other and with variable annuity 

contracts, when an investor considers a new investment. Information provided in a concise, user-

friendly presentation could allow investors to compare information across contracts and as a 

result, may lead investors to make decisions that better align with their investment goals.453  

 

453  Research suggests that individuals are generally able to make more efficient decisions when they have 
comparative information that allows them to assess relevant trade-offs. See, e.g., Christopher K. Hsee, 
George F. Loewenstein, Sally Blount, Max H. Bazerman (1999). Preference Reversals Between Joint and 
Separate Evaluations of Options: A Review and Theoretical Analysis, Psychological Bulletin, 125(5), 576–
90; see also Jeffrey R. Kling, Sendhil Mullainathan, Eldar Shafir, Lee Vermeulen, Marian V. Wrobel 
(2012). Comparison Friction: Experimental Evidence from Medicare Drug Plans, Quarterly Journal of 
Economics, 127(1), 199–235. In a randomized field experiment, some senior citizens choosing between 
Medicare drug plans were randomly selected to receive a letter with personalized, standardized, 
comparative cost information. Plan switching was 28% in the group that received a letter with personalized, 
standardized, comparative cost information, but only 17% in the comparison group, and the intervention 
caused an average decline in predicted consumer cost of about $100 a year among letter recipients. 



250 

If insurance companies choose to meet their prospectus delivery obligations by delivering 

summary prospectuses to investors, with other documents available online, investors would then 

have a choice as well. Under the layered disclosure framework we are proposing for RILAs, 

investors would receive information in the form of a summary prospectus, with more detailed 

information available online if the investor chooses to access it.454 Thus, investors can continue 

to review the statutory prospectuses by accessing them online, or they may request paper or 

electronic delivery of statutory prospectuses on an ad hoc basis. Alternatively, investors may 

choose only to consult the summary prospectuses. Further, if investors want to rely on some 

combination of summary and statutory prospectuses to receive information about the contract, 

that choice is available to them as well. Given the Commission’s experience administering the 

optional summary prospectus regime for variable annuities, we expect a majority of RILA 

issuers would choose to use summary prospectuses. Thus, we expect that the vast majority of 

investors will have the option to use both summary prospectuses and statutory prospectuses in 

their decision-making, in whatever proportion investors think is best for their preferences. 

Initial Summary Prospectus. Should insurance companies issuing RILAs choose to use 

summary prospectuses, investors may benefit in a number of ways.455 The proposed initial 

summary prospectus for RILAs would be limited to describing only the contract and features 

currently available under the statutory prospectus. This focus could make more salient the 

features and risks of a RILA, thereby facilitating investors’ evaluation of those features and risks.  

 

454  During investor testing, several participants felt they would need information beyond the information 
contained in the KIT to make a decision about a RILA. See OIAD Report at Section 5, Qualitative Testing, 
Results from Round 1.   

455  Some investors may prefer to read statutory prospectuses, and therefore, the advantages associated with 
summary disclosure, as described in this section, may not apply to those investors. The statutory prospectus 
would, under the proposed rule, be available online and in paper or electronic format upon request. 



251 

We are proposing a standardized presentation for RILA initial summary prospectuses to 

require certain disclosure items that would be most relevant to investors to appear at the 

beginning of the initial summary prospectus, followed by supplemental information. An initial 

summary prospectus must contain the information required by the rule, and only that 

information, in the order specified by the rule.456 The information would be required to appear in 

the same order, and under relevant corresponding headings, as the rule specifies. The required 

presentation could also facilitate comparisons of different RILA contracts, as well as 

comparisons between RILA contracts and variable annuities.  

We believe standardized, consistent disclosure of comparable information benefits 

investors by making it easier for investors to evaluate and compare RILA offerings. Also, the 

presentation of information in a standardized, consistent manner could facilitate not only the 

evaluation and comparison among RILA offerings, but also could facilitate the comparison of 

RILAs to other variable annuities. Further, certain investors, while aware of variable annuities, 

simply may not be aware of RILAs as an investment option. Presentation of information in a 

standardized, consistent manner in an initial summary prospectus could increase investor 

awareness of RILAs as an investing option. 

In addition, given the time required to review a statutory prospectus, RILA investors may 

benefit from summary prospectuses because they offer a shorter alternative to statutory 

prospectus disclosure. There is evidence that suggests that consumers benefit from summary 

disclosures.457 Within the specific context of investing, there is evidence from related contexts 

 

456  Proposed rule 498A(b)(5). 
457  There is evidence that the summarization of key information is useful to consumers. See, e.g., Sumit 

Agarwal, Souphala Chomsisengphet, Neale Mahoney, Johannes Stroebel, Regulating Consumer Financial 
Products: Evidence from Credit Cards (NBER Working Paper No. 19484, rev. 2014), available at 
 



252 

that suggests that summary prospectuses allow investors to spend less time and effort to arrive at 

the same portfolio decision as if they had relied on a statutory prospectus.458 This research is 

consistent with the 2012 Financial Literacy Study, which showed that at least certain investors 

favor a layered approach to disclosure with the use, wherever possible, of summary documents 

containing key information about an investment product or service.459 

Also, investors allocate their attention selectively,460 and the sheer volume of disclosure 

in a statutory prospectus may discourage some investors from reading contract statutory 

prospectuses. The observations of a telephone survey conducted on behalf of the Commission 

with respect to mutual fund statutory prospectuses (which are typically shorter than variable 

contract statutory prospectuses, and shorter than RILA statutory prospectuses are expected to be 

under the proposal) are consistent with the view that the volume of disclosure may discourage 

 

https://www.nber.org/papers/w19484. The authors find that a series of requirements in the CARD Act, 
including provisions designed to promote simplified disclosure, has produced decreases in both over-limit 
and late fees, saving US credit card users $20.8 billion annually; see also Robert L. Clark, Jennifer A. Maki 
& Melinda Sandler Morrill, Can Simple Informational Nudges Increase Employee Participation in a 401(k) 
Plan? 80 S. ECON. J. 677 (2014). The authors find that a flyer with simplified information about an 
employer’s 401(k) plan, and about the value of contributions compounding over a career, had a significant 
effect on participation rates. 

458  See John Beshears, James J. Choi, David Laibson & Brigitte C. Madrian, How Does Simplified Disclosure 
Affect Individuals’ Mutual Funds Choices?, in EXPLORATIONS IN THE ECONOMICS OF AGING 75 (David A. 
Wise ed., 2010) (“Beshears Paper”), available at https://scholar.harvard.edu/laibson/publications/how-
does-simplified-disclosure-affect-individuals-mutual-fund-choices. We note, however, that while the 
authors find evidence that investors spend less time making their investment decision when they are able to 
use summary prospectuses, there is no evidence that the quality of their investment decisions is improved. 
In particular, “On the positive side, the Summary Prospectus reduces the amount of time spent on the 
investment decision without adversely affecting portfolio quality. On the negative side, the Summary 
Prospectus does not change, let alone improve, portfolio choices. Hence, simpler disclosure does not appear 
to be a useful channel for making mutual fund investors more sophisticated …” Id. at 13 (manuscript page). 

459  See 2012 Financial Literacy Study.   
460  See George Loewenstein, Cass R. Sunstein & Russell Golman. (2014) Disclosure Psychology Changes 

Everything, 6 ANN. REV. ECON. 391 (2014). 



253 

investors from reading statutory prospectuses.461 That survey observed that many mutual fund 

investors do not read statutory prospectuses because they are long, complicated, and hard to 

understand. Responses to investor surveys in other contexts, also suggest that shareholders may 

be more likely to read more concise shareholder reports.462 

To the extent summary prospectuses increase readership of RILA contract disclosures, 

they could improve the quality and efficiency of portfolio allocations made on the basis of 

disclosed information for those investors who otherwise would not have read the statutory 

prospectus.  

The presentation proposed for the initial summary prospectus may also reduce the 

investor effort required to compare RILA contracts, to consider different index-linked options 

that a RILA offers, or to compare RILA contracts with each other and with variable annuity 

contracts, when an investor considers a new investment. Information provided in a concise, user-

friendly presentation could allow investors to compare information across contracts and as a 

result, may lead investors to make decisions that better align with their investment goals.463 For 

example, the proposed amendments would require insurance companies to distill certain key 

product information into tables, which could facilitate comparison across different products. 

 

461  Prior to the Commission’s 2009 adoption of mutual fund summary prospectus rules, the Commission 
engaged a consultant to conduct focus group interviews and a telephone survey concerning investors’ views 
and opinions about various disclosure documents filed by companies, including mutual funds. During this 
process, investors participating in focus groups were asked questions about a hypothetical Summary 
Prospectus. Investors participating in the telephone survey were asked questions relating to several 
disclosure documents, including mutual fund prospectuses. See Abt SBI, Inc., Final Report: Focus Groups 
on a Summary Mutual Fund Prospectus (May 2008), available at https://www.sec.gov/comments/s7-28-
07/s72807-142.pdf. Although the results from the investor testing reflect stated investor preferences, they 
do not provide us with information with respect to the extent to which RILA investors would actually be 
more likely to read a RILA summary prospectus relative to a statutory prospectus. 

462  Tailored Shareholder Reports Adopting Release. 
463  See supra footnote 453. 



254 

Further, the proposed framework for RILA contract summary and statutory prospectuses 

also includes design elements to facilitate investor use. In particular, the proposed amendments 

include requirements for linking both within the electronic version of a contract statutory 

prospectus and between the electronic versions of the contract statutory prospectus and the 

contract summary prospectus. The linking requirement would permit investors who use the 

electronic versions of contract prospectuses to quickly navigate between related sections within 

the contract statutory prospectus and back and forth between related sections of the contract 

summary prospectus and the contract statutory prospectus. Further, the proposal would also 

require that investors either be able to view the definition of each special term used in an online 

summary prospectus upon command, or to move directly back and forth between each special 

term and the corresponding entry in any glossary or list of definitions that the summary 

prospectus includes. This requirement would facilitate understanding of terms that may be 

confusing or unfamiliar among investors viewing the documents online. 

Updating Summary Prospectus. As under current rule 498A, we are not proposing that 

RILA issuers send an updated initial summary prospectus to investors each year. Instead, any 

RILA issuer that relies on rule 498A would send an updating summary prospectus, which would 

provide a brief description of certain changes with respect to the contract that occurred within the 

prior year.464 The updating summary prospectus would also include certain of the information 

required in the initial summary prospectus that we consider most relevant to investors when 

considering additional investment decisions.465 Further, updating summary prospectuses for 

RILA contracts, like initial summary prospectuses, would include specific disclosure items 

 

464  Proposed rule 498A(c)(1).  
465  See supra footnote 285 and accompanying text. 



255 

appearing in a prescribed order, under relevant corresponding headings.466 An updating summary 

prospectus for a RILA contract would have to contain the information required by the rule, and 

only that information, in the order specified by the rule. 

The proposed updating summary prospectus for RILAs would have many of the same 

benefits for investors associated with the initial summary prospectus discussed above, with 

respect to presenting key information in an easier and less time-consuming manner for investors. 

Specifically, because many terms of the RILA contract do not change from year-to-year, the 

contract statutory prospectus may contain large amounts of disclosure that is duplicative of 

disclosure that the investor has previously received. Those changes that do occur may be 

important to investors, but the disclosure about these changes could be difficult for the investor 

to identify given the volume of prospectus disclosure that investors would otherwise receive, and 

the current lack of a requirement to identify new or changed information. 

Under the proposed amendments, the updating summary prospectus would include a 

concise description of important changes affecting the statutory prospectus disclosure relating to 

certain topics that occurred within the prior year—namely: (1) the availability of investment 

options under the contract, (2) the overview of the contract, (3) the KIT, (4) certain information 

about fees, (5) benefits available under the contract, (6) purchases and contract value, and (7) 

surrenders and withdrawals. These are topics that are most likely to entail contract changes and, 

for the reasons previously noted, are the types of contract changes most likely to be important to 

investors because they affect how investors evaluate RILA contracts and are relevant to investors 

when considering whether to continue in the existing option (if available) or transfer funds to a 

 

466  Proposed rule 498A(c)(6). 



256 

different option. The proposed updating summary prospectus, if used by issuers to satisfy their 

prospectus delivery obligations, would likely reduce the burden on investors and increase their 

understanding of their contract by highlighting certain changes to the contract made during the 

previous year, while foregoing the repetition of most information that had remained unchanged.  

d. Use of Statutory Accounting 

The proposal would permit RILA issuers to provide financial statements on amended 

Form N-4 in the same way that insurance companies currently do on Form N-4.467 As a result of 

this change, the financial statements filed in connection with a RILA registration statement could 

be prepared in SAP to the same extent as currently permitted for insurance companies’ financial 

statements filed on that form. We expect this approach to appropriately recognize the cost 

burdens if we were to require GAAP financial statements in cases where the insurance company 

is not otherwise required to prepare financial information in accordance with GAAP. In addition, 

SAP financial statements, which focus on an issuer’s ability to meet its obligations under its 

insurance contracts, as regulated by State law, appear to provide sufficient material information 

for investors evaluating RILAs. As a result, permitting insurance companies to provide SAP 

financial statements when registering the offering of a RILA to the same extent as they can in 

connection with variable annuities on Form N-4 would be consistent with investor protection. 

Also, investors could benefit to the extent the reduced cost burdens provided by SAP financial 

statements are passed along to investors.  

 

467  Certain Commission letters, or portions thereof, exempt insurance companies from the requirement to 
provide financial statements prepared in accordance with GAAP in connection with the registration of an 
offering of RILAs on Form S-1.  As discussed in Section III.B.1.a, among RILA contracts that are currently 
registered with the Commission, 47 RILAs report SAP financials and 43 RILAs report GAAP financials. 



257 

The proposal also would require RILAs to provide information relating to changes in and 

disagreements with accountants on accounting and financial disclosure as detailed in 17 CFR 

229.304 (“Item 304 of Regulation S-K”). Further, RILAs would be required to provide as an 

exhibit any letter from the insurance company’s former independent accountant regarding its 

concurrence or disagreement with the statements made by the insurance company in the 

registration statement concerning the resignation or dismissal as the insurance company’s 

principal accountant. These items are currently provided by RILAs on Forms S-1 and S-3 and are 

designed to address the practice of “opinion shopping” for an auditor willing to support a 

proposed accounting treatment designed to help a company achieve its reporting objectives even 

though that treatment might frustrate reliable reporting.468 Because the requirements for Form N-

4 filers under the proposal are the same as for Form S-1 and Form S-3 filers currently, we would 

not expect any additional benefits from the requirement to provide information relating to 

changes in and disagreements with accountants on accounting and financial disclosure.    

e. Filing Rules 

Fee Payment Method and Amendments to Form 24F-2. The proposal would require 

RILA issuers to pay registration fees for RILAs using the same method that other filers on Form 

N-4 currently use. Issuers registering the offerings of RILAs on amended Form N-4 would be 

deemed to be registering an indeterminate amount of RILAs upon effectiveness of the 

registration statement. These issuers would then be required to pay registration fees annually 

based on their net sales of these securities, no later than 90 days after the issuer’s fiscal year 

ends, on the form that is used by current Form N-4 filers to pay registration fees (Form 24F-2). 

 

468  See Disclosure Amendments to Regulation S-K, Form 8-K and Schedule 14A Regarding Changes in 
Accountants and Potential Opinion Shopping Situations, Investment Company Act Release No. 16358 
(Apr. 12, 1988) [53 FR 12924 (Apr. 20, 1988)]; see also item 11(i) of Form S-1. 



258 

The proposal would further specify the calculation method for paying RILA registration fees, 

consistent with the fee calculation methodology that applies to current Form N-4 filers. The 

proposal would also indicate when issuers can take credits for RILA redemptions that pre-date 

their use of that form and when expiring annuity contracts are rolled over into a new crediting 

period as well as other minor technical amendments. 

The proposed filing rules would provide benefits to insurance companies. Rather than 

registering a specific amount of securities, insurance companies would register an indefinite 

amount of securities upon the effective date of their registration statement. Registering an 

indefinite amount of securities benefits insurance companies by eliminating the risk that a RILA 

issuer may inadvertently oversell securities with respect to a registration statement on Form N-4. 

The payment of fees on an annual net basis furthermore should lead to a reduction in overall 

filing fees relating to RILAs. To the extent that there are cost savings for issuers, some of those 

savings may potentially be passed on to investors. 

Post-Effective Amendments and Prospectus Supplements. As discussed in section II.E, 

the proposal would require RILA issuers to use the same framework for filing post-effective 

amendments to the registration statement as is currently used by other filers on Form N-4. First, 

the proposal would amend rule 485 under the Securities Act to require RILA issuers to use that 

rule when amending RILA registration statements on Form N-4. Requiring RILA issuers to use 

that rule when amending RILA registration statements on Form N-4 would permit RILA issuers 

to file post-effective amendments that become automatically effective under rule 485(a) after a 

specified period of time after the filing or, in certain enumerated circumstances, immediately 

effective under rule 485(b). Issuers may benefit to the extent automatic effectiveness allows 

issuers to tap favorable windows of opportunity in the RILA market, to structure terms of RILAs 



259 

on a real-time basis to accommodate investor demand, and to determine or change the plan of 

distribution in response to changing market conditions.  

Second, the proposal would require RILA issuers to apply rule 497 under the Securities 

Act when appropriate to file RILA prospectuses and prospectus supplements with the 

Commission. Under the proposed amendments, a RILA issuer would be required to file every 

prospectus relating to a RILA offering that varies in form from a previously filed prospectus 

before it is first used. This approach—rather than requiring filing only if the issuer makes 

substantive changes from or additions to a previously-filed prospectus—may benefit both 

investors and issuers. The requirement that insurance companies file every prospectus that varies 

in form from a previously filed prospectus before it is first used could facilitate investor 

evaluation and comparison by making publicly available the most timely information currently 

available to investors. We would expect this benefit to be minimal, however, because rule 424 

under the Securities Act requires RILA issuers only to file prospectuses that contain substantive 

changes. Prospectuses required to be filed under rule 497 that would not be required to file under 

rule 424, then, would be prospectuses updated with minor, non-substantive changes and likely of 

limited informational benefit to investors.  

As discussed above, certain issuers use a short-form registration statement on Form S-3, 

which requires less information than Form S-1 and allows for significant incorporation by 

reference. Certain issuers also can rely on rule 430B under the Securities Act to omit certain 

information from the “base” prospectus when the registration statement becomes effective and 

later provide that information in a subsequent Exchange Act report (forward) incorporated by 

reference, a prospectus supplement, or a post-effective amendment. Issuers registering annuity 

product offerings on Form N-4, on the other hand, have limited ability to incorporate information 



260 

by reference into their registration statements and cannot forward incorporate information from 

subsequently filed Exchange Act reports. Issuers registering annuity product offerings on Form 

N-4 also cannot rely on rule 430B to omit certain information from the base prospectus. Under 

the proposal, then, RILA investors would have all the information available in one location 

rather than needing to separately access the information on a website or request the incorporated 

materials. As a result, costs to investors for assembling and assimilating necessary information 

could decrease, with a potentially stronger effect for investors that may not have the technical 

capabilities or monetary resources to search efficiently through multiple information sources.  

Issuers may benefit from applying rule 497 as well. The proposed rule would facilitate a 

uniform post-effective amendment and prospectus filing framework for all Form N-4 filers, 

which would provide insurance companies with more consistent filing requirements across 

similar products. This, in turn, could benefit insurance companies by making it easier to execute 

such offerings and may decrease compliance costs.   

f. Materially Misleading Statements in RILA Sales Literature 

The proposal would amend rule 156 to make its provisions applicable to RILA sales 

literature. Rule 156 is an interpretive rule that provides factors to be weighed in considering 

whether a statement involving a material fact is or might be misleading in the specific context of 

investment company sales literature, including literature relating to the sale of variable annuities. 

Proposed amendments to rule 156 would indicate that whether a statement involving a material 

fact is misleading in RILA sales literature would depend on an evaluation of the context in which 

it is made, with the rule providing non-exhaustive factors to guide in this determination.  

For example, rule 156(b)(1)(ii) currently provides that a statement could be misleading 

because of the absence of explanations, qualifications, limitations or other statements necessary 

or appropriate to make such statement not misleading. This provision, where made applicable to261 

RILA sales literature, would generally require an insurance company to consider whether an 

advertisement would be materially misleading if it markets the investment as a growth 

investment, a loss-avoidance vehicle, or a customizable product in the absence of qualifying 

explanations or statements. Similarly, if sales literature advertises a particular feature of the 

product’s bounded return structure that is not available for the life of the product or the full term 

of any surrender charge period, the provision as made applicable to RILA sales literature would 

require consideration of whether the statement is misleading without providing additional 

context as to the issuer’s discretion to make changes. 

Further, rule 156(b)(4) currently provides that representations about fees or expenses 

associated with an investment in a fund could be misleading because of statements or omissions 

made involving a material fact, including situations where portrayals of the fees and expenses 

associated with an investment in the fund omit explanations, qualifications, limitations, or other 

statements necessary or appropriate to make the portrayals not misleading. We are proposing to 

amend this provision also to address representations about the fees or expenses associated with a 

RILA contract. In the context of RILA sales literature, this provision as amended would require 

consideration about whether representations or portrayals either of a RILA’s costs or charges, or 

optional benefits that are subject to a contract adjustment, would require qualifying statements or 

explanations regarding the economic costs to the investor to receive an advertised benefit or 

those generally associated with the RILA. 

Also, rule 156(b)(2)(i) currently states that representations about past or future 

investment performance could be misleading because of statements or omissions made involving 

a material fact. This includes situations where portrayals of past income, gain, or growth of 

assets convey an impression of the net investment results achieved by an actual or hypothetical 



262 

investment which would not be justified under the circumstances, including portrayals that omit 

explanations, qualifications, limitations, or other statements necessary or appropriate to make the 

portrayals not misleading. This provision, where made applicable to RILA sales literature, would 

require consideration of whether illustrations about the operation of a RILA or its features could 

be misleading because, for example, they use assumptions that are not currently offered or 

exceed what could be reasonably anticipated or use “cherry picked” data. 

By reducing the potential for misleading or fraudulent statements in RILA sales 

literature, applying rule 156 to RILAs would provide investors with protections and help ensure 

that investors receive the information necessary to make informed decisions about these 

products. Ensuring that investors receive the information necessary to make informed decisions 

could benefit investors by facilitating investor evaluation of RILAs as well as investor 

comparison of RILAs to other annuity products.  

2. Costs 

The proposal could lead to certain additional costs for insurance companies. These costs 

would likely vary across insurance companies, depending on their existing lines of business. 

Costs may also vary depending on the extent to which insurance companies create prospectuses 

that vary in form from previously filed prospectuses and the frequency of certain events, such as 

changes in accountants and disagreements with accountants on accounting and financial 

disclosure. Generally, the costs would be lower for insurance companies that currently offer 

products that register on Form N-4, for those insurance companies that do not change or remove 

key features of RILAs frequently, and for those insurance companies that do not experience 

changes in, and disagreements with, accountants on accounting and financial disclosure.  

We anticipate that the costs to insurance companies would be comprised of both direct 

compliance costs and indirect costs. Direct costs for insurance companies would consist of 



263 

internal costs (for compliance attorneys and other non-legal staff, such as computer 

programmers, to prepare and review the required disclosure) and external costs (including filing 

fees, outside legal and accounting fees, as well as any costs associated with outsourcing all or a 

portion of the Form N-4 filing responsibilities to a filing agent, software consultant, or other 

third-party service provider). 

The proposal could lead to certain costs for investors as well. Any portion of additional 

costs that is not borne by insurance companies would ultimately be passed on to RILA investors. 

Investors also may bear costs associated with certain proposed changes such as the proposed 

change in filing rules as well as an insurance company’s option to use a summary prospectus.  

a. Direct Costs 

Form N-4. We believe that the direct costs associated with the proposed amendments 

would be most significant for the first Form N-4 registration statement that an insurance 

company would be required to prepare and file because the insurance company would need to 

familiarize itself with the new registration form and may need to configure its systems to 

efficiently gather the required information. In subsequent periods, we anticipate that insurance 

companies would incur significantly lower costs because much of the work involved in the initial 

registration statement preparation and filing is non-recurring and because of efficiencies realized 

from system configuration and reporting automation efforts accounted for in the initial filing 

period. The costs associated with preparing and filing a new registration statement (on Form N-4 

as opposed to Forms S-1/S-3) would be ameliorated to the extent an insurance company 

currently has experience and systems in place to prepare and file registration statements on Form 

N-4 (e.g., the insurance company currently offers variable annuities whose offerings are 



264 

registered on Form N-4). We estimate the aggregate additional annual internal time cost to be 

$16,133,834 and the aggregate annual external cost burden to be $2,914,740.469 

Insurance companies would also incur compliance costs to tag many of the newly 

required Form N-4 disclosures (as well as those prospectus disclosures that Form N-4 currently 

requires to be tagged) in Inline XBRL. Various XBRL and Inline XBRL preparation solutions 

have been developed and used by operating companies and investment companies to fulfill their 

structuring requirements, and some evidence suggests that, for smaller operating companies, 

XBRL compliance costs have decreased over time.470 We estimate the total aggregate additional 

annual internal time cost for XBRL compliance would be $308,560 and the aggregate annual 

external cost burden to be $63,000.471 In addition, 22 of the 23 insurers that issue RILAs also 

offer variable products registered on Forms N-3, N-4, or N-6, all of which are currently 

structured, or otherwise have experience tagging registration statements.472  

As such, to the extent these companies comply with Inline XBRL requirements internally 

rather than outsourcing to an external service provider, they may already be familiar with Inline 

XBRL software and may be able to leverage existing Inline XBRL preparation processes and/or 

 

469  See infra Table 13. 
470  An AICPA survey of 1,032 public operating companies with $75 million or less in market capitalization in 

2018 found an average cost of $5,850 per year, a median cost of $2,500 per year, and a maximum cost of 
$51,500 per year for fully outsourced XBRL creation and filing, representing a 45% decline in average cost 
and a 69% decline in median cost since 2014. See AICPA, XBRL Costs for Small Companies Have 
Declined 45% since 2014 (2018), available at 
https://us.aicpa.org/content/dam/aicpa/interestareas/frc/accountingfinancialreporting/xbrl/downloadabledoc
uments/xbrl-costs-for-small-companies.pdf. Note that this survey was limited to small operating 
companies. Additionally, a NASDAQ survey of 151 listed issuers and other respondents in 2018 found an 
average XBRL compliance cost of $20,000 per quarter, a median XBRL compliance cost of $7,500 per 
quarter, and a maximum XBRL compliance cost of $350,000 per quarter in XBRL costs per quarter. See 
Letter from Nasdaq, Inc. (Mar. 21, 2019); Request for Comment on Earnings Releases and Quarterly 
Reports, Securities Act Release No. 10588 (Dec. 18, 2018) [83 FR 65601 (Dec. 21, 2018)].  

471  See infra Table 16. 
472  Based on analysis of Forms S-1, S-3, and POS AM filed by RILA issuers. 



265 

expertise in complying with the new tagging requirements. This would limit the compliance 

costs arising from the new tagging requirements for these issuers to only those costs related to 

selecting additional Inline XBRL tags for those new disclosures proposed to be tagged, and 

reviewing the tags selected for those disclosures. Accordingly, we do not anticipate that the costs 

associated with Form N-4 tagging would be significant enough to deter insurance companies 

from entering the market for RILAs. As such, we do not expect that the new and modified 

tagging requirements in this proposal would decrease competition in the market for RILAs.473 

Option to Use a Summary Prospectus. Issuers will benefit from the option to use a 

summary prospectus to the extent that providing layered disclosure through a summary 

prospectus regime (including costs of producing and delivering initial summary and updating 

summary prospectuses and of making statutory prospectuses, and other documents available 

online) is less expensive than providing statutory prospectuses to new investors and updated 

statutory prospectuses to existing investors annually. Insurance companies choosing to provide 

summary prospectuses would bear a one-time cost of preparing both the initial summary 

prospectus and the updating summary prospectus, as well as costs associated with preparing 

updated versions the updating summary prospectus in the future on at least an annual basis. We 

estimate the average annual burden to prepare initial and updating summary prospectuses to be 

$5,000 per registration.474 

Insurance companies that choose to provide summary prospectuses are required to make 

statutory prospectuses and other materials available online. We estimate the aggregate cost to 

comply with the proposed website posting requirements of the rule for documents relating to 

 

473  See also infra section III.D. 
474  See Table 11, Rule 498A PRA Estimates.  



266 

RILAs to be $772 per registrant.475 However, some of these costs may have already been 

incurred by issuers of “combination” contracts offering variable options as well as index-linked 

options. 

Insurance companies that rely on rule 498A to use summary prospectuses for variable 

annuities are also required to include inter- and intra-document linking and special terms 

definitions. One linking requirement would allow the reader to move back and forth between a 

table of contents of the contract statutory prospectus or SAI, and the related sections of each 

document. Although prospectuses and SAIs are not required to have individual headings 

corresponding to the items in the registration forms, we assume that the sections of a prospectus 

or SAI would correspond with the item requirements of the forms. We estimate that Form N-4 

filers would require 27 back-and-forth internal links. The other linking requirement would allow 

the reader to move back and forth between each section of the summary prospectus and any 

related section of the contract statutory prospectus and SAI that provides additional detail. This 

back-and-forth movement could occur either directly from the summary prospectus to the 

relevant section of the statutory prospectus or SAI, or indirectly by linking from the summary 

prospectus to a table of contents in the statutory prospectus or SAI. For our analysis, we assume 

direct links as those will tend to be more costly when compared with indirect linking through a 

table of contents.  

An initial summary prospectus for a Form N-4 issuer includes eight sections. The Key 

Information Table has instructions stating that, wherever feasible, a registrant should provide 

cross-references or links to the location in the statutory prospectus where the subject matter is 

 

475  See Table 11, Rule 498A PRA Estimates.  



267 

described in greater detail. There are 12 sections of the Key Information Table. Therefore, we 

estimate that there would be 18 back-and-forth links between initial summary prospectuses and 

statutory prospectuses for a Form N-4 issuer.  

An updating summary prospectus for a Form N-4 issuer includes three sections, one of 

which, the Key Information Table, includes 12 sections. One section is the “Updated Information 

About Your Contract” section. The number of links in this section would depend on the number 

of updates discussed. For example, assuming discussion of four updates, we estimate the number 

of back-and-forth links between a Form N-4 issuer’s updating summary prospectus and statutory 

prospectus to be 16. 

The proposed rule amendments would also require that RILA investors either be able to 

view the definition of each special term used in an online summary prospectus upon command 

(e.g., by “hovering” the computer’s pointer or mouse over the term), or to move directly back-

and-forth between each special term and the corresponding entry in any glossary or list of 

definitions that the summary prospectus includes. We assume that RILA issuers could replicate 

links to a glossary or the computer code required to implement access to definitions by 

“hovering” over a term with little or no burden, but that there would be a burden associated with 

creating the requisite link or code for each special term. Accordingly, we estimate the cost to 

comply with the proposed requirement to include inter- and intra-document linking and special 

terms definitions as described above would include 6 burden hours and a cost of $800 annually, 

per registrant.476 

 

476  See VASP Adopting Release at n.1084. 



268 

Filing the Prospectus. As discussed in section II.E, RILA issuers follow different 

processes to file prospectuses than current Form N-4 filers. For example, a RILA issuer is 

required to file a prospectus only if the issuer makes substantive changes or additions to a 

previously-filed prospectus, whereas current Form N-4 filers are required to file every prospectus 

that varies from any previously-filed prospectus. Accordingly, under the proposed amendments, 

a RILA issuer would be required to file every prospectus relating to a RILA offering that varies 

in form from a previously filed prospectus before it is first used. The proposed requirement could 

increase the number of prospectuses required to be filed by RILAs which could, in turn, increase 

costs for issuers.477 For each additional prospectus required to be filed by RILAs, we estimate an 

addition internal cost burden of $113,659.70 and an external cost burden of $24,000.478    

Materially Misleading Statements in RILA Sales Literature. The proposal would amend 

rule 156 to make its provisions applicable to RILA sales literature. The cost of the proposed 

amendments would include the direct cost of analyzing advertising materials in light of the 

guidance rule 156 provides. This may require review and approval of advertisements beyond 

what occurs currently, particularly because determining whether a statement involving a material 

fact is misleading in RILA sales literature would depend on an evaluation of the context in which 

it is made. We expect some of these costs to be borne in the first year after the rule adoption. 

That is, these costs would be transition costs and not sustained beyond the first year. We estimate 

 

477  The potential increase in cost could be greater for Form S-3 filers than for Form S-1 filers. Form S-3 
requires less information than Form S-1. Also, Form S-1 allows incorporation by reference only on a very 
limited basis. Form S-3 allows for forward incorporation by reference. Form S-3 filers may need to produce 
incrementally more information to file on Form N-4 than Form S-1 filers. Transitioning to Form N-4 could 
be more expensive for Form S-3 filers than for Form S-1 filers, as a result.  

478  See Table 11, Rule 498A PRA Estimates. As discussed in footnote 477, these costs could be greater for 
Form S-3 filers than for Form S-1 filers. Also, we estimate an additional internal time cost of $2,436 for 
each additional prospectus required to be filed by separate account registrants.   



269 

that the transition costs associated with the proposed advertising rule amendments would be 

$5,715.479 Also, ongoing sales literature activity may require internal review and approval of 

advertisements. We estimate that the costs associated with ongoing sales literature activity would 

be $1,905, annually.480 These costs would be borne by issuers and third parties who prepare 

RILA advertisements.  

b. Indirect Costs 

Form N-4. While the prospectuses and other registration statement disclosure required by 

the proposal would likely facilitate investor evaluation and comparison of RILAs, investors 

could experience certain transition costs under the proposal, and some investors may experience 

other ongoing costs. Transition costs would include the costs of the inconvenience to some 

investors of adapting to the new materials and to the changes in the presentation of information. 

Investors would also bear a one-time cost of the inconvenience of adjusting to the changes in the 

disclosures they receive. These costs are likely to be relatively lower for investors with less 

experience investing in RILAs. 

Option to Use a Summary Prospectus. While we expect that, should insurance companies 

opt to use summary prospectuses, the majority of investors would benefit from their disclosures, 

certain investors may incur costs. For example, although research indicates that investors 

generally prefer to receive summary disclosures there may be RILA investors who prefer to rely 

 

479  We estimate an initial burden of 15 hours, per advertisement, to review existing advertising materials at a 
blended cost of $381 ($5,715 = 15 x $381). See Tailored Shareholder Reports for Mutual Funds and 
Exchange-Traded Funds; Fee Information in Investment Company Advertisements adopting release at 
footnote 744.   

480 We estimate an initial burden of 5 hours, per advertisement, to review existing advertising materials at a 
blended cost of $381 ($5,715 = 15 x $381). See Tailored Shareholder Reports for Mutual Funds and 
Exchange-Traded Funds; Fee Information in Investment Company Advertisements adopting release at 
footnote 745.   



270 

on statutory prospectuses when making investment decisions. While RILA statutory 

prospectuses would continue to be available online and in paper or electronic copy upon request, 

access to those statutory prospectuses would require investors to take additional steps, imposing 

some burden. For example, investors choosing to access the statutory prospectus online rather 

than requesting a paper copy would need to manually enter a hyperlink from a paper updating 

summary prospectus or click on a link to a website containing the statutory prospectus. To the 

extent that internet access and use among RILA investors is not universal, those investors 

without home internet access might experience a reduction in their ability to quickly and easily 

access statutory prospectus information.481 Even for those investors with home internet access, 

there may be some resistance to taking the additional step of accessing the statutory prospectus 

online.  

Use of Statutory Accounting Principles. The proposal would permit RILA issuers to 

provide financial statements on amended Form N-4 in the same way that insurance companies 

currently do on Form N-4. One consequence of this change would be that the financial 

statements filed in connection with a RILA registration statement could be prepared in SAP to 

the same extent as currently permitted for insurance companies’ financial statements filed on that 

form. The proposed rule would create a choice for certain insurance companies. They may 

prepare their registration statements in SAP, or they may prepare their registration statements in 

 

481  According to the most recent U.S. census data, approximately 85% of U.S. households had some form of 
broadband internet access in their home in 2018, and 92% had a computer (e.g., desktop, laptop, tablet or 
smartphone). See Michael Martin, Computer and Internet Usage in the United States: 2018, U.S. CENSUS 
BUREAU (Apr. 21, 2021), available at https://www.census.gov/library/publications/2021/acs/acs-49.html; 
see also Pew Research Center, Internet/Broadband Fact Sheet (Apr. 7, 2021), available at 
https://www.pewresearch.org/internet/fact-sheet/internet-broadband/ (“Today, 93% of American adults use 
the internet.” and “Today, roughly three-quarters of American adults have broadband internet service at 
home.”); see also Ani Petrosyan, Internet Usage in the United States - Statistics & Facts, STATISTA (Aug. 
31, 2023), available at https://www.statista.com/topics/2237/internet-usage-in-the-united-
states/#topicOverview (“Today, over 90 percent of Americans have access to the internet”).  

https://www.census.gov/library/publications/2021/acs/acs-49.html
https://www.pewresearch.org/internet/fact-sheet/internet-broadband/
https://www.statista.com/topics/2237/internet-usage-in-the-united-states/#topicOverview
https://www.statista.com/topics/2237/internet-usage-in-the-united-states/#topicOverview


271 

GAAP. Those insurance companies that expect to benefit from preparing their registration 

statements in SAP (e.g., through reduced costs) would choose SAP. Those insurance companies 

that do not expect to benefit from the option to prepare their registration statements in SAP 

would continue to prepare their registration statements in GAAP. Because the proposed rule 

would, for certain issuers, create the option, but not the obligation, to prepare their registration 

statements in SAP, we do not believe this provision of the proposed rule would create additional 

costs. 

Filing and Prospectus Delivery Rules. As discussed in section II.E, when a RILA issuer 

seeks to amend a RILA registration statement on Form S-1, the issuer must file a post-effective 

amendment that is typically declared effective by Commission staff acting pursuant to delegated 

authority on such date as the Commission may determine. To the extent that investors previously 

benefited from the Commission staff’s review of these filings before they become effective, 

allowing filings of RILA offerings to become automatically effective may eliminate such 

reviews and, as a result, possibly increase the costs to investors. However, issuers would still 

face liability under the Federal securities laws for registration statement disclosures (e.g., 

sections 12 and 17 of the Securities Act and section 10(b) and rule 10b-5 under the Exchange 

Act), which may ameliorate the potential costs associated with reduced staff review. Moreover, 

rule 485 only permits updates to become immediately effective in limited, enumerated 

circumstances, in order to provide an opportunity for staff review for all other changes. 

As discussed in section II.E.3, we understand that RILA issuers typically deliver 

prospectuses to accompany or precede other communications, such as annuity applications.  It is 

possible that providing layered disclosure through a summary contract prospectus regime 

(including costs of delivering initial summary and updating summary prospectuses and making 



272 

statutory prospectuses and other documents available online) could result in reduced costs for 

issuers.482  

Materially Misleading Statements in RILA Sales Literature. Issuers and third parties 

involved in preparing or disseminating investment company advertisements may incur costs to 

comply with the proposed advertising rule amendments. While reducing the potential for 

misleading or fraudulent statements in RILA sales literature would provide investors with 

protections and help ensure that investors receive the information necessary to make informed 

decisions about these products, investors could bear the costs of these amendments through 

increased expenses that funds would incur to implement the proposal. Alternatively, if the cost of 

compliance with these proposed amendments were significant, some RILAs might reduce 

advertising to lower the extra costs of compliance. If this were to occur, investors who would 

otherwise rely on advertisements to make investment decisions about RILAs or compare RILAs 

with other investment products might have less complete information for these purposes.  

D. Effects on Efficiency, Competition, and Capital Formation 

Efficiency. To investors, the costs of purchasing a RILA are more than just the dollar cost 

of the contract and include the value of an individual’s time spent evaluating the contract and its 

various aspects. Further, for those investors who do not gain a full understanding of the contract, 

there could be a cost stemming from a potential mismatch between an investor’s goals and the 

 

482  See VASP Adopting Release. In the VASP Adopting Release we estimate that printing and mailing 
expenses are $0.18 less for initial and updating summary prospectuses than for statutory prospectuses.  
Because we understand RILA prospectuses to not be as long as variable annuity prospectuses, we would 
expect savings among RILA issuers to be less than the VASP Adopting Release savings, but we do not 
have a basis for believing savings for RILA issuers will be of an order of magnitude less than the VASP 
Adopting Release savings.  We therefore believe savings for RILA issuers will be between approximately 
$.02 and $.18.  We estimate the internal cost time of online posting of contract documents to be $772.  See 
infra, Table 11.  



273 

purchased contract. Depending on the size of an individual’s potential purchase, certain of these 

additional costs could be considerable in comparison to the monetary costs associated with 

contract purchase and could discourage investors from considering RILAs even in circumstances 

where investment in a RILA would be beneficial. 

For their part, insurance companies only supply RILAs to the extent they expect the 

benefits derived from providing the contracts to be greater than the costs of supplying the 

contract. For issuers, costs include not only those costs associated with producing and servicing 

RILAs, but also those costs associated with meeting various statutory and regulatory obligations. 

These costs borne by both insurance companies and individuals are examples of market 

“frictions.” Market frictions have the effect of reducing the benefits from (i.e., the efficiency of) 

contracting between market participants.483 Rules that reduce costs for investors, issuers, or both, 

reduce market frictions and potentially enhance the benefits from contracting between market 

participants. By facilitating investor evaluation and comparison of RILAs as well as facilitating 

the comparison of RILAs to other annuity contracts, the proposed rule could reduce frictions for 

investors. Requiring insurance companies to use a single registration form and filing process for 

all RILAs as well as all variable annuity separate accounts that are structured as unit investment 

trusts, as well as allowing RILA issuers to provide financial statements on amended Form N-4 in 

the same way that insurance companies currently do on Form N-4, may also reduce certain 

compliance burdens for insurance companies. In addition, requiring RILA issuers to tag certain 

key information in Inline XBRL would enable investors, third-party information providers, 

Commission staff, and other data users to capture and analyze that information more quickly and 

 

483  If market frictions are sufficiently large, market frictions could eliminate exchange altogether. 



274 

efficiently than is possible when the same information is provided solely in a static, text-based 

format. 

These increases in efficiency could lead investors to save more appropriately to meet 

their retirement goals. For example, for existing RILA investors the proposal may increase the 

likelihood that investors choose to invest more or less money in RILAs in a manner that is 

consistent with their overall financial needs and objectives—a level that may be higher or lower 

than current levels. Similarly, the proposal may lead existing investors to choose to allocate their 

money into different investment options that the RILA offers, or different RILAs (or other 

insurance products like variable annuities) that best meet their needs. The proposal also may help 

promote investment in RILAs by investors who currently do not invest in RILAs, to the extent 

such investments are appropriate for them. Finally, access to clearer information about the 

contract provisions may reduce the chances that an investor makes mid-crediting period 

withdrawals or transfers or surrenders a RILA when the costs of doing so does not justify the 

benefits. 

Competition. If the proposed rule increases efficiency of exchange in the RILA market, 

then we may observe a change in investment in RILAs. For example, if there are individuals who 

currently do not invest in RILAs (or invest less than they would have) because the costs other 

than the price of the contract are too high (including the effort to gain sufficient understanding of 

the product) or they are not aware of RILAs as an investment, then to the extent the proposed 

rule lowers those costs or makes investor more aware of RILAs, we would expect to observe 

more investors entering the RILA market. Conversely, there may be RILA investors who, 

because of the burden, choose not to read statutory prospectuses. To the extent those investors 

are more likely to read summary prospectuses, those investors may decide, as a result, that other 



275 

investments or products are better suited to their investment goals. This could result in fewer 

investments in RILAs. If there are insurance companies who limit their participation in the RILA 

market as a result of the requirement to register RILA offerings on Form S-1 or Form S-3 or 

because of the costs of current prospectus delivery requirements, those insurance companies may 

increase participation in the RILA market. To the extent that competition in a market is related to 

the size of the market, the net effect of these potential changes in investor demand for, and issuer 

supply of, RILAs could affect competition in the RILA market. 

The proposed rule could also affect competition by requiring that information about 

RILAs be presented in a concise, user-friendly way, which could allow investors to compare 

information across products. Requiring RILA issuers to tag certain key information in Inline 

XBRL could further facilitate comparisons of information across registrants by making it easier 

for investors (directly or through third-party data aggregators) to extract and aggregate 

information through automated means for analysis and comparison, which could increase 

competition among RILA issuers for investor capital. For example, the proposed rule requires 

issuers to distill certain key product information into tables. The presentation of this information 

in a table facilitates evaluation among different RILAs as well as comparison to variable 

annuities. Greater comparison among different RILAs as well as comparison to variable 

annuities could lead to greater competition. Furthermore, by reducing the costs associated with 

aggregating data across RILAs, the proposed Inline XBRL requirement could reduce barriers to 

entry for third-party data aggregators and induce competition among firms that supply 

information about RILAs to investors, including other third-party aggregators and sales agents. 

The effect on competition between insurance companies could be limited, however, to the 

extent RILA investors rely on an agent to help them select their RILA contract and the 



276 

investment options under the contract and do not have access to broad comparisons across 

different RILAs (or among different investment options that the RILA offers) at the time of 

sale.484 Agents generally only provide their customers with a subset of all RILAs available in the 

general marketplace. Thus, while the product information in summary prospectuses would 

facilitate comparison across products offered by the agent, the effect would likely be limited to 

the agent’s set of products rather than to the broader market. 

Capital Formation. As discussed in connection with the potential effects of the proposed 

rule on competition, if the proposed rule increases the efficiency of exchange in the RILA 

market, then we may observe a change in investment in RILAs. As discussed in section III.B.3, 

unlike variable annuities that involve a direct investment of premiums into one or more mutual 

funds, which in turn invest in underlying securities, RILA premiums are not directly invested 

into the assets of the indexes that are associated with the index-linked options offered under the 

contract, but are typically invested into fixed-income securities such as corporate bonds. To the 

extent that an increase or decrease in the demand for RILAs is not driven by investors 

substituting either away from, or into, variable annuities or other investment vehicles as an 

alternative, we would not expect changing demand for RILAs to have any effect on the 

underlying securities. An increase or decrease in the demand for RILAs could, however, increase 

or decrease the demand for fixed-income securities such as corporate bonds.  To the extent the 

proposed rule would cause investors to either substitute away from, or into, variable annuities or 

another investment that entail investment in underlying funds (which, in turn, invest in a 

 

484  We do not have data on the extent to which investors rely on agents when purchasing RILAs. In 2019, 
$95.5 billion of total variable annuity sales of $98.3 billion (97%) were through a distribution channel 
involving an agent. If investors rely on agents when purchasing RILAs to the same extent they do when 
purchasing variable annuities, then the vast majority of RILA investors rely on agents when purchasing 
RILAs.   



277 

portfolio of securities), there could be an effect on capital formation. If investors substitute away 

from variable annuities or other investment vehicles into RILAs, there could be a reduction in the 

demand for the underlying securities and, by extension, a reduction in capital formation. If 

investors substitute away from RILAs and into variable annuities or other investment vehicles, 

there could be an increase in the demand for the underlying securities. To the extent issuers 

invest RILA proceeds into fixed-income securities such as corporate bonds, there could be an 

increase in the demand for those securities.   

The proposed Inline XBRL requirements could increase the efficiency of capital 

formation to the extent that making disclosures available in a structured format reduces some of 

the information barriers that make it costly for RILA issuers to find appropriate sources of new 

investors. Smaller issuers in particular may benefit more from enhanced exposure to investors. If 

tagging certain disclosures in a structured format increases the availability, or reduces the cost, of 

collecting and analyzing key information about RILAs, smaller RILA issuers may benefit from 

improved coverage by third-party information providers and data aggregators. 

E. Reasonable Alternatives 

1. Creating an Entirely New Registration Form for RILAs  

The proposed rule would require the registration of RILA offerings on Form N-4. Most 

variable annuities use Form N-4, which has disclosure requirements tailored to these investments 

that provide investors with key information about a variable annuity’s terms, benefits, and risks 

in a concise and reader-friendly presentation. Currently, insurance companies register RILA 

offerings on Forms S-1 or S-3, which allow registering general debt or equity offerings. Forms 

S-1 and S-3 require issuers to disclose not only information about the offering itself, but also 

extensive information about the registrant issuing the securities. In addition, registrants must 

include financial statements prepared in accordance with GAAP, unless an exemption has been 



278 

granted pursuant to 17 CFR 210.3-13 that permit insurance companies to substitute SAP 

financials in lieu of GAAP financials. Form N-4, on the other hand, allows insurance companies 

to file financial statements prepared in accordance with SAP if they do not otherwise prepare 

GAAP financial statements. As an alternative, we could have required insurance companies to 

register RILA offerings on an entirely new form. 

Form N-4 was designed for investment companies, and RILA issuers are not investment 

companies. A new form specifically tailored to RILAs could be more beneficial than working to 

fit them into an existing framework that was designed with a different structure in mind. 

A completely new registration form for RILA offerings could negatively affect investors’ 

ability to compare different RILAs with variable annuities that register on Form N-4 (including 

“combination” contracts that offer index-linked options as well as variable options). 

Furthermore, given that we are proposing to amend Form N-4 to address those aspects specific to 

RILAs, but many of the current form requirements are relevant to the registration of RILA 

offerings, a completely new and separate form for RILAs would not offer much (if any) benefit 

to investors in terms of new information compared to the proposed amendments to Form N-4. 

Since most variable annuity issuers already use Form N-4 to register their securities, and many 

RILA contracts are offered as “combination” contracts, the amended Form N-4 would efficiently 

provide investors with product-specific information about these combination contracts. As a 

result, investors would be able to compare annuity products, and the investment options that 

these products offer, with less time and effort. To the extent that investors use less time and 

effort to compare annuity products and their underlying investment options, investors may be 

more likely to make decisions that align better with their investment goals. 



279 

We preliminarily believe that requiring RILA offerings to be registered on Form N-4 

rather than on an entirely new form would also be more efficient for insurance companies since 

they would generally follow the same procedures they already use for the registration of variable 

annuities. Using Form N-4 to register variable annuities and RILA offerings would also be less 

costly for insurance companies than using Form N-4 for variable annuities and a completely new 

form for RILAs since registrants are already familiar with Form N-4. It also would be less costly 

because, if RILA offerings had to be registered on a form other than Form N-4, combination 

contracts offering variable options and index-linked options would have to use two separate 

registration forms. 

Commission staff would also benefit from using Form N-4 for RILAs because the 

disclosure requirements for variable annuities and RILAs would be located in one form only, and 

registration statements for these products would be subject to the same filing and review 

processes. This would reduce the use of resources by Commission staff needed to review the 

registration statements of RILAs and variable annuities. 

2. Alternatives to Specific Form N-4 Amendments 

The Commission is proposing amendments to Form N-4 so that insurance companies can 

register RILA offerings using that form. While the substance of many of the requirements in 

Form N-4 would not change from the current version of the form, we are proposing to update 

some items to include disclosures specifically tailored to RILAs. In certain limited 

circumstances, we have changed the disclosure requirements provided on the form for all filers, 

including those registering variable annuities.  

As an alternative, we could have proposed more or less tailoring the form for RILAs. A 

larger number of amendments tailored to RILAs than the number we propose would be more 

costly for insurance companies registering RILA offerings because insurance companies that 



280 

offer combination contracts (or that otherwise register variable annuities on Form N-4) would 

have to make more changes to their disclosure. For example, we could have required insurance 

companies to provide a diagram in the KIT to illustrate surrender charges and contract 

adjustments during different time periods of the contract, or illustrations showing how caps, 

floors, and/or buffers could affect an investor’s returns across different market scenarios.  

Also, we could require insurance companies to provide information related to the 

economic tradeoffs associated with index-linked options. For example, we could require the 

insurance company to compare a hypothetical investment in the index-linked option to the value, 

or cost, of a combination of (i) derivatives that would provide the index-linked option’s 

investment exposure; (ii) a fixed-income component; and (iii) the standard insurance features 

offered with the index-linked option, similar to the analysis in the Moenig Paper and the analysis 

conducted by the staff in section III.B.3.485 In such a comparison, we could either require that the 

insurance company should use the hypothetical investment discounted by the rate of interest the 

insurance company is crediting, or would credit, on fixed annuities with a term equal to the 

duration of the crediting periods of the index-linked option, or we could require the insurance 

company to use the value of a risk-free zero-coupon bond with a time to maturity equal to the 

crediting period of the index-linked option, consistent with our analysis in section III.B.3.486 We 

could also consider requiring additional disclosure related to the setting of early withdrawal 

charges or penalties and their impact on such a comparison of hypothetical investments. For 

example, we could require the calculation of a disclosure similar to the analysis in the Moenig 

Paper and the analysis conducted by the staff in section III.B.3 to explicitly include the impact of 

 

485  See supra section II.B.3.b. 
486  Id.281 

early withdrawal charges or penalties on the liquidity of the investment. We could also require 

more prominent placement of these features on marketing or other materials, or we could require 

a comparison of these features to potential benefits of the RILA to clarify for investors possible 

trade-offs. 

Conversely, a smaller number of amendments tailored to RILAs than the number we 

propose would be less costly for insurance companies. Since insurance companies already use 

Form N-4 to register variable annuities, and most RILA issuers offer variable annuities registered 

on Form N-4 (including, in many cases, combination contracts), we preliminarily believe that the 

costs of complying with the disclosure requirements of the amended form would not be 

substantial. 

The amendments to Form N-4 that we propose would promote investor understanding of 

RILA contracts by presenting information in a clear and concise manner. Proposing a larger 

number of amendments tailored to RILAs may add too much, or less relevant, information, 

which may overwhelm investors who may not have the time or capacity to process all the 

information.487 Proposing only a subset of amendments tailored to RILAs, as compared with the 

proposed approach, could result in less investor understanding relative to the understanding 

resulting from the proposed amendments. 

3. Require the Use of Form N-4 for Registered MVAs 

As discussed above, while we are not proposing to require insurance companies to 

register offerings of registered MVAs on Form N-4, one alternative would have been requiring 

 

487  See, e.g., Julie R. Agnew and Lisa R. Szykman (2005). Asset Allocation and Information Overload: The 
Influence of Information Display, Asset Choice, and Investor Experience, Journal of Behavioral 
Finance, 6(2), 57-70, and Alejandro Bernales, Marcela Valenzuela and Ilknur Zer (2023). Effects of 
Information Overload on Financial Markets: How Much Is Too Much? International Finance Discussion 
Papers 1372, Washington: Board of Governors of the Federal Reserve System. 



282 

insurance companies to register the offering of registered MVAs on Form N-4.488 These 

offerings are currently registered on Forms S-1 or S-3 but differ from RILAs only with respect to 

the manner in which interest is calculated and credited.489 As a result, many of the benefits and 

costs identified above regarding RILAs would also be true in applying the same registration and 

disclosure framework to offerings of registered MVAs, including potentially a change to the 

filing fee process to file on Form 24f-2 and requiring the issuers to follow rule 156. For example, 

as with RILAs, expanding the scope of Form N-4 to include registered MVAs would benefit 

investors by making it easier for them to compare registered MVAs, and also compare registered 

MVAs with other annuity product offerings registered using Form N-4.490 In particular, because 

both RILAs and registered MVAs include contract adjustments, the inclusion of specified 

disclosures about contract adjustments would benefit investors since they would be able to better 

evaluate the costs of purchasing and owning annuity contracts, including registered MVAs. 

Requiring the registration of registered MVAs on Form N-4 also would entail efficiency benefits 

to insurance companies that offer combination contracts, for example ones that include both 

variable annuities registered on Form N-4 and registered MVAs, as the use of the same 

registration form for all of these products may reduce these companies’ compliance burdens.  

Conversely, including registered MVAs on Form N-4 would also entail similar costs to 

those outlined above for the proposed registration and disclosure approach for RILAs. These 

would include direct costs to the insurance company, for example filing fees, as well as outside 

 

488  See supra section II.H. 
489  Based on internal estimates, there are 45 registered MVAs from 15 different insurance companies. 27 of 

these registered MVAs are in combination contracts whereas 18 are standalone. 27 of these registered 
MVAs use Form S-1 and 18 use Form S-3. Lastly, 26 of these registered MVAs use GAAP financials and 
19 use SAP. 

490  See supra section III.C.1. 



283 

legal and account fees. Direct costs also would include costs associated with filing the first Form 

N-4 registration statement in connection with the registration of a registered MVA offering, 

where the insurance company would be required to familiarize itself with the new registration 

form and may need to configure its systems to efficiently gather the required information. 

Further, investors would bear certain indirect costs, such as the cost of adapting to new materials 

and the changes in the presentation of information. 

Ultimately, we determined not to propose to require insurance companies to register 

offerings of registered MVAs on Form N-4 at this time, but we request comment on this 

reasonable alternative. 

4. Limiting Scope of Structured Data Requirements  

The proposed rule would require many of the newly added disclosures on Form N-4 to be 

tagged in Inline XBRL, and also would require RILA issuers to tag those prospectus disclosures 

that Form N-4 currently requires to be tagged. Alternatively, the Commission could have limited 

the tagging requirement to only those disclosures being added to Items of Form N-4 that are 

already tagged in Inline XBRL.491 Under this alternative, disclosures relating to: the overview of 

the contract; the description of the Insurance company, registered separate account, and 

investment options; charges; purchases and contract value; purchase of securities being offered; 

disagreements with and changes to accountants; information about contracts with index-linked 

options and fixed options subject to a contract adjustment; and fee representations and 

undertakings would not be tagged. 

 

491  See supra footnote 451. 



284 

Limiting the scope of tagging requirements in this manner would result in reduced 

compliance burdens for insurance companies, which would be required to apply fewer tags to 

their disclosures on Form N-4 filings. However, the alternative would also remove the 

informational benefits associated with making those disclosures available in a machine-readable 

manner. Furthermore, because Form N-4 filers already have Inline XBRL tagging obligations 

with respect to certain of the form’s disclosure requirements, the burden reductions resulting 

from such an alternative would be limited. 

F. Request for Comment 

Throughout this release, we have discussed the anticipated benefits and costs of the 

proposed rule and its potential effect on efficiency, competition, and capital formation. While we 

do not have comprehensive information on all aspects of RILA registration and reporting, we are 

using the data currently available in considering the effects of the proposed rule. We request and 

encourage any interested person to submit comments regarding the proposed rule, our analysis of 

the potential effects of the rules and other matters that may have an effect on the proposed rules. 

We request that commenters identify sources of data and information with respect to annuity 

contracts in general, but also with respect to RILAs in particular, as well as provide data and 

information to assist us in analyzing the economic consequences of the proposed rules. We are 

also interested in comments on the qualitative benefits and costs we have identified and any 

benefits and costs we may not have discussed. We urge commenters to be as specific as possible. 

Comments on the following questions are of particular interest. 

153. What additional qualitative or quantitative information should be considered as 

part of the baseline for the economic analysis of these amendments? 

154. Are the benefits and costs of proposed amendments accurately characterized? If 

not, why not? Should any of the costs or benefits be modified? What, if any, other 



285 

costs or benefits should be taken into account? If possible, please offer ways of 

estimating these benefits and costs. What additional considerations can be used to 

estimate the benefits and costs of the proposed amendments? 

155. To the extent commenters believe any specific additional data sources would help 

better quantify the benefits and costs of the proposal, we request that commenters 

provide this data. In particular, the following data could be particular informative: 

historical information about current limits on index gains associated with the 

index-linked options offered under a RILA, quantitative data about contract 

adjustments incurred by investors who make withdrawals from an index-linked 

option or from a RILA contract before the end of a specified period, and/or data 

regarding the frequency with which RILA contracts are annuitized.   

156. Are the effects on competition, efficiency, and capital formation arising from the 

proposal accurately characterized? If not, why not? 

157. Are there any other reasonable alternatives to the proposed new rule that should 

be considered? Are there any additional benefits or costs that should be associated 

with the reasonable alternatives considered? 

158. We indicate that insurance companies benefit from the sale of RILAs in at least 

three ways. First, insurance companies can benefit from a favorable imbalance 

between the downside protections that a RILA contract offers, and the upside caps 

the contract offers. Second, insurance companies invest RILA proceeds into fixed-

income securities such as corporate bonds, thereby earning a “credit risk 

premium.” Finally, insurance companies can benefit when a RILA offers index-

linked options whose index for measuring performance is a price-based index that 



286 

does not account for dividend payments. Are we correct in our characterization of 

how insurance companies benefit from the sale of RILAs? In what other ways, if 

any, do insurance companies benefit from the sale of RILAs?  

159. We characterize RILAs as combining features of fixed-index annuities and 

variable annuities – limiting or reducing downside risk in return for an investor 

accepting capped upside performance. In exchange for giving up the complete 

protection of principal offered by fixed annuities, a RILA investor is afforded 

greater upside potential than that provided by fixed annuities, though typically less 

than the potential upside of a variable annuity. Is our characterization of RILAs, 

compared to other annuity products, correct? If not, how do RILAs compare to 

other annuity products? 

160. In Section III.B.3, we analyze the imbalance between the downside protections 

that a RILA contract offers, and the upside limits the contract offers. Does our 

analysis reflect a risk-neutral valuation for a RILA with a cap and buffer or floor? 

What alternative considerations should we include in calculating such a valuation? 

Do the methodological assumptions (such as generating prices through the linear 

interpolation of implied volatilities) create significant bias or other problems for 

the analysis? How do RILAs set surrender charges or other early withdrawal 

charges or penalties, and should these charges or penalties be considered when 

performing this calculation since they reduce the liquidity of the investment? 

Should we require additional disclosure related to early withdrawal charges, fees, 

or penalties? For example, should we require more prominent placement of these 

features on marketing or other materials, or should we require a comparison of 



287 

these features to potential benefits of the RILA to clarify for investors possible 

trade-offs? Are there other data sources (e.g., pricing vendors) that should be 

considered for these calculations? Are there certain time periods or types of 

contracts that we should consider when doing these or similar calculations? What 

considerations should be used in assessing whether the cost derived in our analysis 

is large or small? Also, are other measures related to the economic content of 

downside protections and upside limits that would be beneficial for investors?  

161. We indicate that for shorter crediting periods and for common indexes such as the 

S&P 500, issuers are able to use exchange traded derivative securities to closely 

approximate the issuer’s liabilities from a RILA contract at the end of each 

crediting period. Do issuers use exchange derivative securities to approximate the 

issuer’s liabilities from a RILA contract? If not, how do issuers use the proceeds 

from RILA sales? 

162. Under the proposed rule, to what extent would insurance companies choose to 

meet their disclosure obligation by providing investors with summary prospectuses 

while making statutory and other documents available on a website? As discussed 

above, we expect the vast majority of investors will have the option to use both 

summary prospectuses and statutory prospectuses in their decision-making, in 

whatever proportion investors think is best for their preferences. To what extent 

would investors in RILA contracts whose issuers elect to rely on rule 498A request 

to receive statutory prospectuses in paper or electronically, or seek access to 

statutory prospectuses online?  



288 

163. Would any positive or negative effect of the proposed rule on investors be 

disproportionately greater for certain investors than for others? If so, which 

investors would be disproportionately affected, to what extent, and how would 

such effects manifest? What, if any, additional measures could help mitigate any 

such disproportionate effects? Please provide supportive data to the extent 

available. 

164. To what extent might reduced burdens (e.g., using SAP accounting rather than 

GAAP accounting) borne by issuers be passed on to existing investors? Under 

what circumstances, and in what form, would insurance companies pass benefits 

through to existing investors? 

165. To what extent would the proposed rule affect the ability of investors to 

understand the investment risks of RILAs and to efficiently allocate capital? 

Would investors be more likely to allocate additional capital to RILAs? What 

would be the effect on issuer competition for investor capital? 

166. To what extent would investors realize benefits from Inline XBRL tagging 

requirements for certain newly added disclosures on Form N-4, as opposed to 

tagging requirements for only those disclosures within currently tagged Form N-4 

Items? How would this approach affect costs for insurance companies? Would 

there be any cost saving? 

167. To what extent would an increase or decrease in the demand for RILAs be driven 

by investors substituting either away from, or into, variable annuities or other 

investment vehicles? We assume that if investors do substitute away from, or into, 

variable annuities or other investment vehicles into RILAs, that the effect on 



289 

capital formation would be small. Is our assumption correct?  If not, why would 

the effect on capital formation be larger than what we assumed? 

IV. PAPERWORK REDUCTION ACT 

We are proposing amendments to several rules and forms that would modify the 

registration, offering, and communications processes for RILAs under the Securities Act. We are 

also proposing amendments to Form N-4 and related rules that would apply to all issuers of that 

form.492 The proposed amendments, if adopted, would implement the requirements relating to 

RILAs in the RILA Act.493 The proposed amendments would have an impact on the current 

collections of information burdens under the Paperwork Reduction Act of 1995 (“PRA”) of the 

following rules and forms: Rule 498A, Form N-4, Investment Company Interactive Data, and 

Form 24F-2. The titles for the existing collections of information are: (1) “Rule 498A Summary 

Prospectus for Variable Annuity and Variable Life Insurance Contracts” (OMB Control No. 

3235-0765), which we would retitle to “Rule 498A Summary Prospectus for Variable and Index-

Linked Annuity and Variable Life Insurance Contracts;” (2) “Form N-4, Registration Statement 

of Separate Accounts Organized as Unit Investment Trust” (OMB Control No. 3235-0318), 

which we would retitle to “Form N-4, Registration Statement of Separate Accounts Organized as 

Unit Investment Trust or of Index-Linked Annuity Contracts;” (3) “Annual Notice of Securities 

 

492  We are proposing amendments rules 485 and 497 of Regulation C (OMB Control No. 3235-0074), which 
describes the procedures to be followed in preparing and filing registration statements with the 
Commission, and rule 405 of Regulation S-T (OMB Control No. 3235-0424), which specifies the 
requirements that govern the electronic submission of documents. The proposed amendments would require 
RILA issuers to tag specified information in registration statements filed on Form N-4 or post-effective 
amendments thereto, as well as in forms of prospectuses filed pursuant to rule 497(c) or 497(e) under the 
Securities Act that include information that varies from the registration statement using Inline XBRL These 
burdens are included in our estimates for the Investment Company Interactive Data collection of 
information discussed in section IV.D below. 

493  See Pub. L. 117-328; 136 Stat. 4459 (Dec. 29, 2022). 



290 

Sold Pursuant to Rule 24f-2.” (OMB Control No. 3235–0456), which we would retitle to 

“Annual Notice of Securities Sold Pursuant to 17 CFR 270.24f-2 or 230.456(e);” and (4) 

“Investment Company Interactive Data” (OMB Control No. 3235-0642). 

The Commission is submitting these collections of information to OMB for review and 

approval in accordance with 44 U.S.C. 3507(d) and 5 CFR 1320.11. The hours and costs 

associated with preparing and filing the forms constitute reporting and cost burdens imposed by 

each collection of information. An agency may not conduct or sponsor, and a person is not 

required to respond to, a collection of information unless it displays a currently valid OMB 

control number. We discuss below the collection of information burdens associated with 

proposed amendments to rule 498A and Investment Company Interactive Data, as well as Forms 

N-4 and 24F-2, which are filed with the Commission and are not kept confidential. A description 

of the proposed amendments, including the need for the information and its proposed use, as well 

as a description of the likely respondents, can be found in Section II above, and a discussion of 

the economic effects of the proposed amendments can be found in Section III above. 

A. Rule 498A 

We are proposing to amend rule 498A to permit RILA issuers, as well as issuers of 

“combination contracts” offering a combination of index-linked options and variable options, to 

use a summary prospectus to satisfy statutory prospectus delivery obligations. Consistent with 

current rule 498A, the proposed use of summary prospectuses for RILAs would be voluntary, but 

the rule’s requirements would be mandatory for issuers that elect to send or give a summary 

prospectus in reliance upon proposed rule 498A. We are also proposing to make certain 

amendments to Form N-4 that would affect the variable annuity summary prospectuses currently 

provided to investors. The proposed amendments to rule 498A are part of a layered disclosure 

approach that is designed to provide investors with a summary prospectus to help them make 



291 

informed investment decisions regarding RILAs, as discussed in more detail above. These 

amendments would result in a change in our estimate of the burdens associated with this 

collection of information, specifically to account for these additional requirements for issuers 

that use rule 498A currently and to add RILAs to the estimates. 

The respondents to these collections of information would be RILA issuers and registered 

variable annuity separate accounts. The information provided under rule 498A will not be kept 

confidential. 

In our most recent Paperwork Reduction Act submission for Rule 498A, we estimated for 

rule 498A a total aggregate annual hour burden of 14,688 hours, and a total aggregate annual 

external cost burden of $11,559,420.494 We estimate that 90 RILAs would be registered using 

Form N-4 if the proposal was adopted and that that there are 419 registrants on current Form N-4 

that would be impacted by the proposed amendments.495 The summary prospectus is voluntary, 

so the percentage of RILA issuers that will choose to utilize it is uncertain. Given this 

uncertainty, we have assumed that insurance companies will choose to use a summary prospectus 

for 90% of all RILAs, which is the same as our current estimate for variable annuity separate 

accounts. The table below summarizes our PRA initial and ongoing annual burden estimates 

associated with the proposed amendments to rule 498A. 

Table 11: Rule 498A PRA Estimates 

 Internal initial 
burden hours 

Internal annual 
burden hours  Wage rate2 Internal time 

costs 
Annual external 
cost burden 

PROPOSED ESTIMATES  

Separate Account Registrants 

 

494  On Nov. 13, 2020, the Office of Management and Budget approved this collection of information estimate 
for rule 498A.  

495  The RILA estimate is based on a review of RILA registration statements filed with the Commission as of 
May 2023 and the current Form N-4 registrants estimate is based on Form N-CEN reports through Apr. 15, 
2023.  



292 

Proposed Amendments 91 61  $425 (compliance attorney) $2,550 - 

Number of registrants3  x 419   x 419 - 

Total annual burden  2,514   $1,068,450 - 

Use of summary prospectus  x 90%   x 90% - 

Total new annual burden for Reliance 
on Rule 498A  2,262.60   $961,605 - 

RILA Registrants 

Preparation and filing of Initial Summary 
Prospectus/Updating Summary 

Prospectus 
40 24.674  $313 (blended rate)5 $7,709.38 $5,0008 

Online Posting of Contract Documents 2 2.676  $289 (webmaster) $771.63 - 

Total burden per registrant - 27.34  - 8,481.01 $5,000 

Number of registrants7 - x 90  - x 90 x 90 

Total annual burden - 2,460.60  - $763,290.90 $405,000 

Use of summary prospectus  x 90%   x 90% x 90% 

Total new annual burden for Reliance 
on Rule 498A  2,214.54   $686,961.81 $364,500 

ESTIMATES FOR PRINTING AND MAILING BY RILA REGISTRANTS9 

Initial Summary Prospectus      $120,000 

Updating Summary Prospectus      $1,048,000 

Total annual burden      $1,168,000 

Use of summary prospectus      x 90% 

Total new annual burden for Reliance 
on Rule 498A      $1,051,200 

Total Burdens 

 Responses Internal Hour 
Estimate 

  Internal Hour 
Cost Estimate 

External Cost 
Estimate 

Current aggregate annual burden 
estimates 676 14,688   $3,900,193 $11,559,420 

Aggregate proposed additional annual 
burden estimates +8310 +4,477.14   +1,648,566.81 +$1,415,700 

Revised aggregate annual burden 
estimates 

=759 =19,165.14   =5,548,759.81 =$12,975,120 

Notes:   

1. Burden estimates also include the burden associated with the proposed amendments for separate account registrants that use a notice document as part 
of the modernized alternative disclosure framework in connection with discontinued variable annuity contracts. See VASP Adopting Release at section II.E. 
Internal annual burden hours represents initial burden estimates annualized over a three-year period plus three hours of on-going annual burden hours.  

2. The Commission’s estimates of the relevant wage rates are based on salary information for the securities industry compiled by the Securities Industry and 
Financial Markets Association’s Office Salaries in the Securities Industry 2013. The estimated wage figures are modified by Commission staff to account for 
an 1,800-hour work-year and multiplied by 5.35 to account for bonuses, firm size, employee benefits, overhead, and adjusted to account for the effects of 
inflation. See Securities Industry and Financial Markets Association, Report on Management & Professional Earnings in the Securities Industry 2013 (as 
adjusted to account for inflation, the “SIFMA Wage Report”). 

3. Estimate is based on a review of N-CEN reports through Apr. 15, 2023. In its most recently approved PRA submission, the Commission estimated that 426 
registrants on Form N-4 would be subject to the information collection burden under current rule 498A. For the estimated burden of the proposed 
amendments to rule 498A, we have taken into account updated data regarding the number of registrants on Form N-4.  

4. Represents initial burden estimates annualized over a three-year period plus 11 hours of ongoing annual burden hours. 

5. Represents a blended wage rate of a compliance attorney ($425 per hour) and an intermediate accountant ($200 per hour). $313 is based on the 
following calculation: ($425 + $200)/2 = $313 rounded to the nearest whole dollar. 

6 Represents initial burden estimates annualized over a three-year period plus two hours of ongoing annual burden hours. 

7. This estimate is based on the number of RILAs, as estimated through review of RILA registration statements filed with the Commission as of May 2023. 

8. We estimate that each insurance company that chooses to rely on rule 498A with regards to a RILA will incur a one-time collective external cost burden of 
$10,000 per registration statement to prepare both a new initial summary prospectus and a new updating summary prospectus for offerings on Form N-4. We 



293 

also estimate an on-going collective burden of $2,500 per registration statement during each subsequent year to prepare updates to these materials. The 
three-year average cost of these estimates is $5,000.  

9. Costs associated with printing and mailing for separate account registrants are already accounted for in the currently approved burdens for rule 498A. 
Estimates for RILA issuers printing and mailing costs are based on the currently approved burdens for printing and mailing costs under rule 498A.  

10. The estimated number of new responses is based on the total of the number of RILA responses under the proposed amendments (90 responses) and the 
difference between the number of responses for registered separate accounts under the current aggregate annual burden estimate (426 responses) and the 
proposed additional annual burden estimates (419 responses). (90 RILA responses subtracted by 7 registered separate account responses).  

 

B. Form N-4 

Under the proposed amendments, RILA issuers would register offerings on Form N-4, as 

amended to address the features and risks of RILAs. We are also proposing other amendments to 

Form N-4 that would apply to all issuers that use that form. For example, we are proposing to 

switch the order of the Key Information Table and Overview of the Contract items, require 

issuers to present information in the KIT in a Q&A format, and to require more specific principal 

risk disclosures. These amendments would result in a change in our estimate of the burdens 

associated with this collection of information, specifically to account for these additional 

requirements for issuers that use Form N-4 currently and to add RILAs to the estimates. 

Form N-4 generally imposes two types of reporting burdens on issuers that use the form: 

(1) the burden of preparing and filing the initial registration statement; and (2) the burden of 

preparing and filing post-effective amendments to a previously effective registration statement. 

In our most recent Paperwork Reduction Act submission for Form N-4, we estimated for Form 

N-4 a total aggregate annual hour burden of 292,487 hours, and a total aggregate annual external 

cost burden of $33,348,866.496 Compliance with the disclosure requirements of Form N-4 is 

mandatory, and the responses to the disclosure requirements will not be kept confidential. The 

respondents to these collections of information would be RILA issuers and registered variable 

annuity separate accounts. The purpose of the information collection requirements on Form N-4 

 

496  On Oct. 26, 2021, the Office of Management and Budget approved without change this burden estimate.  



294 

are to meet the filing and disclosure requirements of the Securities Act and Investment Company 

Act, as applicable, and to provide investors with information necessary to evaluate an investment 

in an offering of securities registered on the form. 

We estimate that 90 RILA respondents and 419 separate account registrants would be 

subject to collection of information requirements under the proposed amendments to Form N-

4.497. The table below summarizes our PRA initial and ongoing annual burden estimates 

associated with the proposed amendments to Form N-4. 

Table 12: Form N-4 PRA Estimates For Initial Filings 

 Internal initial 
burden hours 

Internal annual 
burden hours  Wage rate2 Internal time 

costs 
Annual external 
cost burden 

PROPOSED ESTIMATES3  

Separate Account Registrants 

Proposed amendments 12 141  

$406 
(blended rate for compliance 

attorney and senior 
programmer)3 

$5,684 - 

Estimated number of annual 
responses4  x 42   x 42 - 

Total new annual burden  588   $238,728 - 

RILA Issuers 

Proposed amendments to Form N-4 300 390.895  

$406 
(blended rate for compliance 

attorney and senior 
programmer)3 

$158,701.34 

$40,0008 

Website availability requirement6 - 0.5  $286 (webmaster) $143 - 

Estimated number of annual 
responses7  x 20   x 20 x 20 

Total new annual burden  7,827.80   $3,176,886.80 $800,000 

Total Burdens 

 Responses Internal Hour 
Estimate 

  Internal Hour 
Cost Estimate 

External Cost 
Estimate 

Current aggregate annual burden 
estimates 

30 8,427   $2,494,716 $754,740 

Aggregate proposed additional annual 
burden estimates +329 +8,416.80   +$3,416,614.80 +$800,000 

Revised aggregate annual burden 
estimates =62 =16,843.80   =$5,911,330.80 =$1,554,740 

 

497  For RILA registrants, this estimate is based on a review of RILA registration statements filed with the 
Commission as of May 2023. For separate account registrants, this amount is based on Form N-CEN 
reports through Apr. 15, 2023. 



295 

Notes:  

1. This estimate includes the initial burden estimates annualized over a three-year period, plus 10 hours of ongoing annual burden hours. 

2. The Commission’s estimates of the relevant wage rates are based on the SIFMA Wage Report. The estimated wage figures are modified by Commission 
staff to account for an 1,800-hour work-year and multiplied by 5.35 to account for bonuses, firm size, employee benefits, overhead, and adjusted to account 
for the effects of inflation.  

3. The $406 wage rate reflects current estimates of the blended hourly rate for an in-house compliance attorney ($425) and a senior programmer ($386). 
$406 is based on the following calculation: ($425 + $386)/2 = $406 rounded to the nearest whole dollar. 

4. The estimate of the annual number of registration statements filed on Form N-4 is based on the average annual number of filings received by the 
Commission over the past three years (Jan. 1, 2020 to Dec. 31, 2022). In its most recently approved PRA submission, the Commission estimated that 
separate accounts will make approximately 30 initial registration statement filings per year. For the estimated burden of the proposed amendments to Form 
N-4, we have taken into account updated data regarding the number of initial filings on Form N-4. 

5. The proposed estimate includes the initial burden estimates annualized over a three-year period, plus 290.89 hours of ongoing annual burden hours. The 
ongoing annual burden is estimated to be equal to the currently approved ongoing annual burden for initial filings on Form N-4 plus 10 hours of ongoing 
annual burden hours.  

6. The proposed amendments would require RILA issuers to separately to include information about current contract limits on gains on their websites. See 
Item 17 of proposed Form N-4. 

7. This estimate is based on a review of Morningstar data regarding the number of new RILA product launches that occurred over the prior three calendar 
years (2020 – 2022), rounded to the nearest ten. Current RILA registration statements would make their first filing on proposed Form N-4 as a post-effective 
amendment. See supra footnote 202 and accompanying text. 

8. We estimate that the external cost to prepare and file an initial registration statement on Form N-4 is $40,000 per filing. 

9. The estimated number of new responses is based on the total of the number of RILA responses under the proposed amendments (20 responses) and the 
difference between the number of responses for registered separate accounts under the current aggregate annual burden estimate (30 responses) and the 
proposed additional annual burden estimates (42 responses). (20 RILA responses plus 12 registered separate account responses). 

Table 13: Form N-4 PRA Estimates For Post-Effective Amendment Filings 

 Internal initial 
burden hours 

Internal annual 
burden hours  Wage rate2 Internal time 

costs 
Annual external 
cost burden 

PROPOSED ESTIMATES3  

Separate Account Registrants 

Proposed amendments 12 61  

$406 
(blended rate for compliance 

attorney and senior 
programmer)3 

$2,436 

- 

Estimated number of annual 
responses4  x1,016   x1,016 - 

Total new annual burden  6,096   $2,474,976 - 

RILA Issuers 

Proposed amendments to Form N-4 210 279.955  

$406 
(blended rate for compliance 

attorney and senior 
programmer)3 

$113,659.70 $24,0008 

Website availability requirement6 - 0.5  $286 (webmaster) $143 - 

Estimated number of annual 
responses7  x90   x90 x90 

Total new annual burden  25,240.50   10,242,243 $2,160,000 

Total Burdens 

 Responses Internal Hour 
Estimate 

  Internal Hour 
Cost Estimate 

External Cost 
Estimate 

Current aggregate annual burden 
estimates 1,366 +284,060   $84,100,454 +$32,594,126 

Aggregate proposed additional annual 
burden estimates 

-2609 +31,336.50  + +$12,717,219 +$2,160,000 

Revised aggregate annual burden 
estimates =1,106 =315,369.50   =96,817,673 =$34,754,126 



296 

Notes:  

1. This estimate includes the initial burden estimates annualized over a three-year period, plus two hours of on-going annual burden hours. 

2. The Commission’s estimates of the relevant wage rates are based on the SIFMA Wage Report. The estimated wage figures are modified by Commission 
staff to account for an 1,800-hour work-year and multiplied by 5.35 to account for bonuses, firm size, employee benefits, overhead, and adjusted to account 
for the effects of inflation.  

3. The $406 wage rate reflects current estimates of the blended hourly rate for an in-house compliance attorney ($425) and a senior programmer ($386). 
$406 is based on the following calculation: ($425 + $386)/2 = $406 rounded to the nearest whole dollar. 

4. The estimate of the annual number of post-effective amendments to registration statements on Form N-4 is based on the average annual number of filings 
received by the Commission over the past three years (Jan. 1, 2020 to Dec. 31, 2022). In its most recently approved PRA submission, the Commission 
estimated that separate accounts will make approximately 1,366 post-effective amendment filings per year on Form N-4. For the estimated burden of the 
proposed amendments to Form N-4, we have taken into account updated data regarding the number of post-effective amendment filings on Form N-4.. 

5. The proposed estimate includes the initial burden estimates annualized over a three-year period, plus 207.95 hours of ongoing annual burden hours. The 
ongoing annual burden is estimated to be equal to the currently approved ongoing annual burden for initial filings on Form N-4 plus an addition 2 hours of 
ongoing annual burden hours. 

6. The proposed amendments would require RILA issuers to separately to include information about current contract limits on gains on their websites. See 
Item 17 of proposed Form N-4. 

7. This estimate is based on a review of RILA registration statements filed with the Commission as of May 2023. 

8. We estimate that the external cost to prepare and file a post-effective registration statement on Form N-4 is approximately $24,000 per filing. 

9. The estimated number of new responses is based on the total of the number of RILA responses under the proposed amendments (90 responses) and the 
difference between the number of responses for registered separate accounts under the current aggregate annual burden estimate (1,366 responses) and 
the proposed additional annual burden estimates (1,016 responses). (90 RILA responses subtracted by 350 registered separate account responses). 

Table 14: Total Burden Estimates For Form N-4 

Notes:  

 
1. This estimate includes the initial burden estimates annualized over a three-year period. 

C. Form 24F-2 

Under the proposed amendments, insurance companies would be required to pay 

applicable securities registration fees relating to RILAs in arrears on Form 24F-2. Consistent 

with the other elements of this proposal, these proposed amendments are designed to require 

insurance companies to use the same framework to pay securities registration fees for RILAs that 

they do for variable annuities. Form 24F-2 is the annual notice of securities sold by certain funds 

that accompanies the payment of registration fees with respect to the securities sold during the 

 Responses Internal annual burden 
hours1 

 Internal time costs  Annual 
external cost burden 

 TOTAL BURDEN ESTIMATES INCLUDING AMENDMENTS 

Current aggregate annual burden 
estimates 

1,366 292,487 $86,595,170 $33,348,866 

Aggregate proposed additional 
annual burden estimates 

-228 +39,753.30+ +$16,133,833.80 +$2,914,740 

Revised aggregate annual burden 
hours 

=1,168 =332,240.30 =$102,729,004 =$36,263,606 



297 

fiscal year, net of securities redeemed or repurchased during the year. Compliance with Form 

24F-2 is mandatory. Responses to this form are not kept confidential. 

In our most recent Paperwork Reduction Act submission for Form 24F-2, we estimated 

for Form 24F-2 a total aggregate annual hour burden of 27,176 hours, and a total aggregate 

annual external cost burden of $0.498 The likely respondents to the proposed amendments would 

include RILA issuers and current Form 24F-2 filers, which open-end investment companies, unit 

investment trusts, registered closed-end investment companies that make periodic repurchase 

offers under 17 CFR 270.23c-3, and face-amount certificate companies. We estimate that 90 

RILA respondents would be subject to these proposed amendments and would file one Form 

24F-2 filing each per year.499 The table below summarizes our PRA initial and ongoing annual 

burden estimates associated with the proposed amendments to Form 24F-2. 

Table 15: Form 24F-2 PRA Estimates 

 Internal initial 
burden hours 

Internal annual 
burden hours  Wage rate2 Internal time 

costs 
Annual external 

cost burden 

PROPOSED ESTIMATES 

Clerical work to file Form 24f-2 3 31  $82 (compliance clerk) $246 $0 

Submission in a structured data format 3 31  $316 (programmer) $948 $0 

Total annual burden per response  6  - $1,194  

Number of annual responses3  x 90  - x 90 X 90 

Total new annual burden  540  - $107,460 $0 

TOTAL ESTIMATED BURDENS INCLUDING AMENDMENTS 

 Responses Internal annual 
burden hours 

  Internal time 
costs 

Annual external 
cost burden 

Current aggregate annual burden 6,794 27,176  - $4,633,508 $0 

Aggregate proposed additional annual 
burden estimates +90 +540   +$107,460 +$0 

Revised aggregate burden estimates =6,884 =27,716  - =$4,140,968 =$0 

Notes:  

 

498  On May 14, 2021, the Office of Management and Budget approved this burden estimate.  
499  This estimate is based on a review of RILA registration statements filed with the Commission as of May 

2023. We do not believe that the proposed amendments to Form 24F-2 will affect the estimated burdens 
associated with current Form 24F-2 filers. We have not amended the currently approved burdens for 
current Form 24F-2 filers with more recent data for the purposes of this PRA estimate.  



298 

1. The proposed estimate includes the initial burden estimates annualized over a three-year period, plus 2 hours of ongoing annual burden hours. 

2. The Commission’s estimates of the relevant wage rates are based on the SIFMA Wage Report. The estimated wage figures are modified by Commission 
staff to account for an 1,800-hour work-year and multiplied by 5.35 to account for bonuses, firm size, employee benefits, overhead, and adjusted to account 
for the effects of inflation. 

3. This estimate is based on a review of RILA registration statements filed with the Commission as of May 2023. 

D. Investment Company Interactive Data 

The Investment Company Interactive Data collection of information references current 

requirements for certain registered investment companies and BDCs to submit to the 

Commission in Inline XBRL certain information provided in response to specified form and rule 

requirements included in their registration statements and Exchange Act reports. We are 

proposing amendments to Form N-4, as well as rule 405 of Regulation S-T, that would require 

certain new structured data reporting requirements for RILA issuers.500 The proposed 

amendments would require RILA issuers to tag specified information in registration statements 

filed on Form N-4 or post-effective amendments thereto, as well as in forms of prospectuses filed 

pursuant to rule 497(c) or 497(e) under the Securities Act that include information that varies 

from the registration statement using Inline XBRL.501 The purpose of the information collection 

is to make information regarding RILAs easier for investors to analyze and to help automate 

regulatory filings and business information processing, and to improve consistency across all 

types of investment products offered on Form N-4 with respect to the accessibility of information 

they provide to the market. 

 

500  The Investment Company Interactive Data collection of information do not impose any separate burden 
aside from that described in our discussion of the burden estimates for this collection of information. 

501  See supra section II.B.9.  



299 

Insurance companies that use Form N-4 to register variable annuities are currently 

required to tag certain registration statement disclosure items using Inline XBRL.502 For the 

insurance companies that would now be registering RILAs on Form N-4, our proposed data 

tagging requirements would represent new burdens. Nevertheless, RILA issuers generally do 

have prior experience submitting filings to the Commission in Inline XBRL. The vast majority of 

insurance companies that currently register RILAs on Forms S-1 and S-3 also separately file 

Form N-4 to register variable annuities and variable life insurance products or currently tag their 

RILA registration statements and are thus familiar with the current Form N-4 tagging 

requirements.503 In addition, insurance companies that register RILAs on Forms S-1 and S-3 that 

file GAAP financial statements must tag them using Inline XBRL.504 Given this prior 

experience, we do not expect the proposed tagging requirements to be as burdensome to many 

RILA issuers as it would be for issuers that would be going through the Inline XBRL tagging 

and submission process for the first time. 

In our most recent Paperwork Reduction Act submission for the Investment Company 

Interactive Data collection of information, we estimated a total annual hour burden of 323,724 

hours, and a total annual external cost burden of $16,041,450.505 Compliance with the interactive 

data requirements is mandatory, and the responses will not be confidential. 

 

502  See General Instruction C.3(h) of current Form N-4. As discussed above, some of the proposed items would 
also require certain variable annuity issuers to provide a few additional disclosures, which though relatively 
minor, would also have to tagged. 

503  Based on analysis of Forms S-1, S-3, and POS AM filed by RILA issuers, 22 of the 23 insurance 
companies that issue RILAs also offer variable products registered on Forms N-3, N-4, or N-6, all of which 
are currently structured, or otherwise have experience tagging registration statements. 

504  See Inline XBRL Filing of Tagged Data, Securities Act Release No. 10514 (June 28, 2018) [83 FR 40846 
(Aug. 16, 2018)]. 

505  This estimate is based on the last time the PRA renewal for the Investment Company Interactive Data 
information collection was approved in 2023. See ICR Reference No. 202212-3235-007, available at 
https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=202212-3235-007.  



300 

The table below summarizes our PRA estimates for the burdens associated with the 

proposed tagging requirements that would apply to RILAs that file with the Commission on 

Form N-4. 

Table 16: Investment Company Interactive Data 
 Internal 

initial 
burden 
hours 

Internal annual 
burden hours1  Wage rate2 

Internal time 
costs 

Annual external 
cost burden 

PROPOSED BURDENS 

Proposed disclosures for 
current N-4 filers3 

1 hour 1 hour4  

$406 
(blended rate for 

compliance attorney and 
senior programmer) 

$406 $505 

Number of current N-4 
filers6 

 × 400   × 400 ×400 

Total new burden 
estimates for current N-4 

filers 
 400 hours   $162,400 $20,000 

Proposed Form N-4 
disclosures for RILAs7 

9 hours 4 hours8  

$406 
(blended rate for 

compliance attorney and 
senior programmer) 

$1,624 $7009 

Number of RILAs10  × 90   × 90 x 90 

Total new burden 
estimates for RILAs 

 360 hours   $146,160 $63,000 

Total new aggregate 
annual burden 

  760 hours11   $308,56012 $63,00013 

TOTAL PROPOSED ESTIMATED BURDENS INCLUDING AMENDMENTS 

 Responses 
Internal Hour 

Estimate 
  Internal Hour 

Cost Estimate 
External Cost 

Estimate 

Current aggregate annual 
burden estimates 

14,702 
 

323,724 hours 
   

  
 

$27,066,240 
 

$16,041,450 

Proposed additional 
annual burdens   +90 + 760 hours     + $308,560    + $63,000 

Revised aggregate annual 
burden estimates 

14,792 324,484 hours    $27,374,800 $16,124,450 

 
Notes: 
 
1. Includes initial burden estimates annualized over a 3-year period.  
 
2. The PRA estimates assume that the types of professionals that will be involved in complying with the new interactive data requirements. 
The Commission’s estimates of the relevant wage rates are based on the SIFMA Wage Report. The $406 wage rate reflects current 
estimates of the blended hourly rate for an in-house compliance attorney ($425) and a senior programmer ($386). $406 is based on the 
following calculation: ($425 + $386)/2 = $406. This estimate represents the average burden for a filer on Form N-4 that is currently 
subject to interactive data requirements.  
 
3. Estimated incremental burden for a variable annuity Form N-4 filer that is subject to the form’s current interactive data requirements. 
 
4. Includes initial burden estimates annualized over a three-year period, plus 0.67 hour of ongoing annual burden hours. The estimate of 1 
hour is based on the following calculation: ((1 initial hour /3) + 0.67 hour of additional ongoing burden hours) = 1 hour.301 

 
5. Estimated incremental external cost for Form N-4 variable annuity registrants that already submit certain information using Inline XBRL. 
 
6. Based on Form N-CEN filing data for 2022, we estimate that 400 variable annuity registrants file on Form N-4. 
 
7. Estimated average burden for a RILA that files on Form N-4 that is currently subject to interactive data requirements on other 
Commission forms. 
 
8. Includes initial burden estimates annualized over a three-year period, plus 1 hour of ongoing annual burdens. The estimate of 4 hours is 
based on the following calculation: ((9 initial hours /3) + 1 hour of additional ongoing burden hours) = 4 hours. 
 
9. We estimate an incremental external cost for RILAs that would be newly filing on Form N-4 of $700 to reflect one-time compliance and 
initial set-up costs. Because RILAs are currently subject to Inline XBRL tagging requirements on other forms, we do not estimate any 
burdens related to one time-costs associated with becoming familiar with structured data requirements (e.g., the acquisition of new 
software or the services of consultants). 
 

10. Estimated number of RILAs that currently file on Forms S-1 and S-3. 
 
 
11. 760 hours = (400 variable annuity registrants x 1 hour = 400) + (90 RILAs x 4 hours = 360). 
 
12. $308,560 internal time cost = (400 variable annuity registrants x $406 = $162,400) + (90 RILAs x $1,624 = $146,160).  
 
13. $63,000 annual external cost = (400 variable annuity registrants x $50 = $20,000) + (90 RILAs x $700 = $63,000).  
  

E. Request for Comment 

We request comment on whether our estimates are reasonable. Pursuant to 44 U.S.C. 

3506(c)(2)(B), the Commission solicits comments to: (1) evaluate whether the proposed 

collection of information is necessary for the proper performance of the functions of the 

Commission, including whether the information will have practical utility; (2) evaluate the 

accuracy of the Commission’s estimate of the burden of the proposed collection of information; 

(3) determine whether there are ways to enhance the quality, utility, and clarity of the 

information to be collected; and (4) determine whether there are ways to minimize the burden of 

the collection of information on those who are to respond, including through the use of 

automated collection techniques or other forms of information technology. Persons wishing to 

submit comments on the collection of information requirements of the proposed amendments 

should direct them to the OMB Desk Officer for the Securities and Exchange Commission, 

[email protected], and should send a copy to Vanessa 

Countryman, Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, 

DC 20549-1090, with reference to File No. S7-16-23. OMB is required to make a decision 



302 

concerning the collections of information between 30 and 60 days after publication of this 

release; therefore a comment to OMB is best assured of having its full effect if OMB receives it 

within 30 days after publication of this release. Requests for materials submitted to OMB by the 

Commission with regard to these collections of information should be in writing, refer to File 

No. S7-16-23, and be submitted to the Securities and Exchange Commission, Office of FOIA 

Services, 100 F Street NE, Washington, DC 20549-2736. 

V. REGULATORY FLEXIBILITY CERTIFICATION 

Section 3(a) of the Regulatory Flexibility Act of 1980 (“Regulatory Flexibility Act”)506 

requires the Commission, when issuing a rulemaking proposal, to prepare and make available for 

public comment an initial regulatory flexibility analysis that describes the impact of the proposed 

rule and form amendments on small entities unless we certify that the rule and form 

amendments, if adopted, would not have a significant economic impact on a substantial number 

of small entities.507 Pursuant to 5 U.S.C. 605(b), we hereby certify that the proposed 

amendments to Forms N-4 and 24F-2, rules 313 and 405 of Regulation S-T, and rules 156, 172, 

405, 415, 424, 456, 457, 485, 497, and 498A under the Securities Act, would not, if adopted, 

have a significant economic impact on a substantial number of small entities.  

We are proposing amendments to Form N-4 pursuant to the authority set forth in the 

Securities Act, particularly sections 6, 7, 8, 10, 19, and 28 thereof [15 U.S.C. 77f, 77g, 77h, 77j, 

77s, and 77z-3], the Exchange Act, particularly sections 3, 4, 10, 12, 13, 14, 15, 17, 23, 35A, and 

36 thereof [15 U.S.C. 78c, 78d, 78j, 78l, 78m, 78n, 78o, 78q, 78w, 78ll, and 78mm]; the 

Investment Company Act, particularly sections 8, 30, and 38 thereof [15 U.S.C. 80a-8, 80a-29, 

 

506  5 U.S.C. 603(a). 
507  5 U.S.C. 605(b). 



303 

and 80a-37], and the RILA Act, particularly section 101 thereof [Pub. L. No. 117-328, div. AA, 

title I, 136 Stat. 4459 (2022)]. Form-N-4 is the registration form currently used by most variable 

annuity separate accounts. These proposed amendments would implement the requirements 

relating to RILAs contained in the RILA Act by allowing Form N-4 to also be used for the 

registration of RILAs. 

The proposed amendments would add to Form N-4 new disclosure requirements that 

specifically address the features and risks of RILAs. Specifically, the proposal would amend the 

contents of Form N-4, including the form’s general instructions, requirements for front and back 

cover pages, the key information table, principal disclosures regarding RILA investment options, 

and contract adjustment and fee disclosures. These amendments would apply only to insurance 

companies registering RILAs. We are also proposing applying the form’s existing disclosure 

requirements to RILAs where appropriate. For example, we are proposing to permit insurance 

companies to provide financial statements on amended Form N-4 regarding RILAs in the same 

way that that they do under the current Form N-4 for variable annuities, including permitting the 

use of SAP to the same extent as variable annuities. 

In addition to adding RILAs to Form N-4, we are proposing amendments to the form that 

would be applicable to all issuers, which are designed to improve disclosures based upon our 

experience in administering the form and feedback received in investor testing. For example, we 

are proposing to switch the order of the key information table and overview of the contract items 

in the prospectus to require more specific principal risk disclosures. All Form N-4 filers would 

be subject to these proposed amendments.  

To facilitate to the inclusion of RILAs on Form N-4, we are proposing amending Form 

24F-2, rules 313 and 405 of Regulation S-T, and rules 156, 172, 405, 415, 424, 456, 457, 485, 



304 

497, and 498A, pursuant to authority set forth in the Securities Act, particularly sections 6, 7, 8, 

10, and 19(a), and 28 thereof [15 U.S.C. 77e, 77f, 77g, 77h, 77j, and 77s, and 77z-3(a)], the 

Exchange Act, particularly sections 3, 4, 10, 12, 13, 14, 15, 17, 23, 35A, and 36 thereof [15 

U.S.C. 78c, 78d, 78j, 78l, 78m, 78n, 78o, 78q, 78w, 78ll, and 78mm]; the Investment Company 

Act, particularly sections 8, 30, and 38 thereof [15 U.S.C. 80a-8, 80a-29, and 80a-37], and the 

RILA Act, particularly section 101 thereof [Pub. L. No. 117-328, div. AA, title I, 136 Stat. 4459 

(2022)]. For example, the proposed amendment to rule 498A would permit RILA issuers to use a 

summary prospectus to satisfy statutory prospectus delivery obligations, and the proposed 

amendments to rules 485 and 497 would make those rules applicable to RILA issuers when 

amending RILA registration statements on Form N-4 or when filing prospectuses and prospectus 

supplements with the Commission.508 The proposed amendments to Form 24F-2, Rule 313 of 

Reg S-T, and rules 456 and 457 would require insurance companies to pay securities registration 

fees relating to RILA offerings according to the same method used for variable annuities. 

Because we propose subjecting RILA offerings to an investor communication framework similar 

to the framework applicable to variable annuity offerings, the proposed amendments to rule 172 

would exclude RILA offerings from that rule’s provisions. The proposed amendment of rule 405 

of Reg S-T would require inline XBRL tagging of RILA-specific disclosures, while the proposed 

amendment of rule 405 would add a new defined term for RILAs to facilitate their registration on 

Form N-4 and to simplify references to RILAs in our proposed rule amendments. The proposed 

amendments to rule 156 would require RILA issuers to comply with the rule’s guidance as to 

when sales literature is materially misleading under the Federal securities laws.  

 

508  Relatedly, we propose amending rule 424 to specify that RILA issuers must use rule 497 rather than rule 
424 when filing prospectuses and prospectus supplements, and making similar amendments to rule 415 to 
exempt RILA offerings from its provisions, consistent with the framework applied to existing N-4 issuers.  



305 

For purposes of the Securities Act and the Regulatory Flexibility Act, generally, an 

issuer, other than an investment company, will be considered a small entity if it has net assets of 

$5 million or less as of the end of its most recent fiscal year, and the issuer’s offering does not 

exceed $5 million.509 RILA issuers are not investment companies and based on a review of 

EDGAR filings of existing RILA issuers, we do not expect any RILA issuers will be treated as 

small entities. The analysis is different for existing N-4 filers (i.e., variable annuity issuers), as 

the insurance company separate accounts registering variable annuities are deemed to be 

investment companies. Generally, for purposes of the Investment Company Act and the 

Regulatory Flexibility Act, an investment company is a small entity if, together with other 

investment companies in the same group of related investment companies, it has net assets of 

$50 million or less as of the end of its most recent fiscal year.510 Because State law generally 

treats separate account assets as the property of the sponsoring insurance company, rule 0-10 

aggregates each separate account’s assets with the assets of the sponsoring insurance company, 

together with assets held in other sponsored separate accounts.511 As a result, the Commission 

expects few, if any, separate account to be treated as small entities.  

For this reason, we believe that the proposed amendments would not, if adopted, have a 

significant economic impact on a substantial number of small entities.  

The Commission encourages written comments on the certification. We solicit comment 

as to whether the proposed form and rule amendments could have an effect on small entities that 

 

509  17 CFR 230.157 (defining “small business” or “small organization” under the Securities Act for purposes 
of the Regulatory Flexibility Act); 15 U.S.C 77c(b)(1) (defining “small entity” to mean “small business,” 
“small organization,” or “small governmental jurisdiction”). 

510  17 CFR 270.0-10(a). 
511  17 CFR 270.0-10(b). 



306 

has not been considered. We ask that commenters describe the nature of any impact on small 

entities and provide empirical data to support the extent of the impact. 

VI. CONSIDERATION OF IMPACT ON THE ECONOMY 

For purposes of the Small Business Regulatory Enforcement Fairness Act of 1996 

(“SBREFA”), the Commission must advise OMB whether a proposed regulation constitutes a 

184 “major” rule. Under SBREFA, a rule is considered “major” where, if adopted, it results in or 

is likely to result in: 

• An annual effect on the economy of $100 million or more;  

• A major increase in costs or prices for consumers or individual industries; or 

• Significant adverse effects on competition, investment, or innovation. 

We request comment on whether our proposal would be a “major rule” for purposes of 

SBREFA. We solicit comment and empirical data on: 

• The potential effect on the U.S. economy on an annual basis; 

• Any potential increase in costs or prices for consumers or individual industries; 

and 

• Any potential effect on competition, investment, or innovation. 

Commenters are requested to provide empirical data and other factual support for their 

views to the extent possible. 

STATUTORY AUTHORITY 

The amendments contained in this release are being proposed under the authority set 

forth in the Securities Act, particularly sections 6, 7, 8, 10, 19, and 28 thereof [15 U.S.C. 77a et 

seq.]; the Exchange Act, particularly sections 3, 4, 10, 12, 13, 14, 15, 17, 23, 35A, and 36 thereof 

[15 U.S.C. 78a et seq.]; the Investment Company Act, particularly, Sections 8, 30, and 38 



307 

thereof, and the RILA Act, particularly section 101 thereof [Pub. L. No. 117–328, div. AA, title 

I, 136 Stat. 4459 (2022)].  

List of Subjects 

17 CFR Part 230 

Advertising, Confidential business information, Investment companies, Reporting and 

recordkeeping requirements, Securities. 

17 CFR Part 232 

Administrative practice and procedure, Reporting and recordkeeping requirements, 

Securities. 

17 CFR Part 239 

Reporting and recordkeeping requirements, Securities. 

17 CFR Part 274 

Investment companies, Reporting and recordkeeping requirements, Securities.  

TEXT OF RULE AND FORM AMENDMENTS 

For reasons set forth in the preamble, we are proposing to amend title 17, chapter II of the 

Code of Federal Regulations as follows: 

PART 230 – GENERAL RULES AND REGULATIONS, SECURITIES ACT OF 1933 

1. The authority citation for part 230 continues to read in part as follows: 

Authority: 15 U.S.C. 77b, 77b note, 77c, 77d, 77f, 77g, 77h, 77j, 77r, 77s, 77z-3, 77sss, 

78c, 78d, 78j, 78l, 78m, 78n, 78o, 78o-7 note, 78t, 78w, 78ll(d), 78mm, 80a-8, 80a-24, 80a-28, 

80a-29, 80a-30, and 80a-37, and Pub. L. 112-106, sec. 201(a), sec. 401, 126 Stat. 313 (2012), 

unless otherwise noted. 

* * * * * 



308 

Sections 230.400 to 230.499 issued under secs. 6, 8, 10, 19, 48 Stat. 78, 79, 81, and 85, as 

amended (15 U.S.C. 77f, 77h, 77j, 77s). 

Sec. 230.457 also issued under secs. 6 and 7, 15 U.S.C. 77f and 77g. 

* * * * * 

2. Revise §230.156 to read as follows: 

§ 230.156 Investment company and registered index-linked annuity sales literature. 

(a) Under the Federal securities laws, including section 17(a) of the Securities Act of 

1933 (15 U.S.C. 77q(a)) and section 10(b) of the Securities Exchange Act of 1934 (15 U.S.C. 

78j(b)) and § 240.10b-5 of this chapter (Rule 10b-5) thereunder, it is unlawful for any person, 

directly or indirectly, by the use of any means or instrumentality of interstate commerce or of the 

mails, to use sales literature which is materially misleading in connection with the offer or sale of 

registered index-linked annuity (as defined in § 230.405 (Rule 405)) securities or securities 

issued by an investment company. Under these provisions, sales literature is materially 

misleading if it:  

(1) Contains an untrue statement of a material fact; or  

(2) Omits to state a material fact necessary in order to make a statement made, in the light 

of the circumstances of its use, not misleading. 

(b) Whether or not a particular description, representation, illustration, or other statement 

involving a material fact is misleading depends on evaluation of the context in which it is made. 

In considering whether a particular statement involving a material fact is or might be misleading, 

weight should be given to all pertinent factors, including, but not limited to, those listed below. 

(1) A statement could be misleading because of: 



309 

(i) Other statements being made in connection with the offer of sale or sale of the 

securities in question; 

(ii) The absence of explanations, qualifications, limitations or other statements necessary 

or appropriate to make such statement not misleading; or 

(iii) General economic or financial conditions or circumstances. 

(2) Representations about past or future investment performance could be misleading 

because of statements or omissions made involving a material fact, including situations where: 

(i) Portrayals of past income, gain, or growth of assets convey an impression of the net 

investment results achieved by an actual or hypothetical investment which would not be justified 

under the circumstances, including portrayals that omit explanations, qualifications, limitations, 

or other statements necessary or appropriate to make the portrayals not misleading; and 

(ii) Representations, whether express or implied, about future investment performance, 

including: 

(A) Representations, as to security of capital, possible future gains or income, or 

expenses associated with an investment; 

(B) Representations implying that future gains or income may be inferred from or 

predicted based on past investment performance; or 

(C) Portrayals of past performance, made in a manner which would imply that gains or 

income realized in the past would be repeated in the future. 

(3) A statement involving a material fact about the characteristics or attributes of an 

investment company or registered index-linked annuity could be misleading because of: 



310 

(i) Statements about possible benefits connected with or resulting from services to be 

provided or methods of operation which do not give equal prominence to discussion of any risks 

or limitations associated therewith; 

(ii) Exaggerated or unsubstantiated claims about management skill or techniques, 

characteristics of the investment company or registered index-linked annuity or an investment in 

securities issued by such company, services, security of investment or funds, effects of 

government supervision, or other attributes; and 

(iii) Unwarranted or incompletely explained comparisons to other investment vehicles or 

to indexes. 

(4) Representations about the fees or expenses associated with an investment in the fund 

or registered index-linked annuity could be misleading because of statements or omissions made 

involving a material fact, including situations where portrayals of the fees and expenses 

associated with an investment in the fund or registered index-linked annuity omit explanations, 

qualifications, limitations, or other statements necessary or appropriate to make the portrayals 

not misleading. 

(c) For purposes of this section, the term sales literature shall be deemed to include any 

communication (whether in writing, by radio, or by television) used by any person to offer to sell 

or induce the sale of securities of any investment company or registered index-linked annuity. 

Communications between issuers, underwriters and dealers are included in this definition of 

sales literature if such communications, or the information contained therein, can be reasonably 

expected to be communicated to prospective investors in the offer or sale of securities or are 

designed to be employed in either written or oral form in the offer or sale of securities. 



311 

(d) Nothing in this section may be construed to prevent a business development company 

or a registered closed-end investment company from qualifying for an exemption under § 

230.168 or § 230.169. 

3. Amend §230.172 by revising paragraph (d) to read as follows: 

§ 230.172 Delivery of prospectuses. 

* * * * * 

(d) Exclusions. This section shall not apply to any:  

(1) Offering of any investment company registered under the Investment Company Act of 

1940 (15 U.S.C. 80a-1 et seq.), other than a registered closed-end investment company;  

(2) A business combination transaction as defined in § 230.165(f)(1);  

(3) Offering registered on Form S-8 (§ 239.16b of this chapter); or 

(4) Offering of any registered index-linked annuity (as defined in §230.405 (Rule 405)) 

securities. 

4. Amend §230.405 by adding in alphabetical order definitions for “Form available solely 

to investment companies registered under the Investment Company Act of 1940” and 

“Registered index-linked annuity” to read as follows: 

§ 230.405 Definitions of terms. 

* * * * * 

Form available solely to investment companies registered under the Investment Company 

Act of 1940. A form available solely to investment companies registered under the Investment 

Company Act of 1940 includes the form used to register the offering of securities of a registered 

index-linked annuity for purposes of the Securities Act of 1933. 

* * * * * 



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Registered index-linked annuity. The term registered index-linked annuity means an 

annuity or an option available under an annuity: 

(1) That is deemed a security; 

(2) That is offered or sold in a registered offering; 

(3) That is issued by an insurance company that is the subject to the supervision of either 

the insurance commissioner or bank commissioner of any State or any agency or officer 

performing like functions as such commissioner; 

(4) That is not issued by an investment company; and  

(5) Whose value, either during the accumulation period or after annuitization or both, will 

earn positive or negative interest based, in part, on the performance of any index, rate, or 

benchmark. 

* * * * * 

5. Amend §230.415 by revising paragraph (b) to read as follows: 

§ 230.415 Delayed or continuous offering and sale of securities. 

* * * * * 

(b) This section shall not apply to any registration statement pertaining to a registered 

index-linked annuity (as defined in §230.405 (Rule 405)), securities issued by a face-amount 

certificate company, or redeemable securities issued by an open-end management company or 

unit investment trust under the Investment Company Act of 1940 or any registration statement 

filed by any foreign government or political subdivision thereof. 

6. Amend §230.424 by revising paragraph (f) to read as follows: 

§ 230.424 Filing of prospectuses, number of copies. 

* * * * * 



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(f) This section shall not apply with respect to prospectuses of an investment company 

registered under the Investment Company Act of 1940 (other than a registered closed-end 

investment company) or prospectuses that pertain to a registered index-linked annuity (as defined 

in §230.405 (Rule 405)). References to “form of prospectus” in paragraphs (a), (b), and (c) of 

this section shall be deemed also to refer to the form of Statement of Additional Information. 

* * * * * 

7. Amend §230.456 by adding paragraph (e) to read as follows: 

§ 230.456 Date of filing; timing of fee payment. 

* * * * * 

(e)(1) Notwithstanding paragraph (a) of this section, where a registration statement 

relates to an offering of registered index-linked annuity (as defined in §230.405 (Rule 405)) 

securities, an issuer shall be deemed to register an offering of an indeterminate amount of such 

securities and shall, not later than 90 days after the end of any fiscal year during which it has 

publicly offered such securities, pay a registration fee to the Commission calculated in 

accordance with § 230.457(u) (Rule 457(u)) and file Form 24F-2 (referenced in 17 CFR 274.24) 

with the Commission. 

Instruction 1 to paragraph (e)(1): To determine the date on which the registration fee 

must be paid, the first day of the 90-day period is the first calendar day of the fiscal year 

following the fiscal year for which the registration fee is to be paid. If the last day of the 90-day 

period falls on a Saturday, Sunday, or Federal holiday, the registration fee is due on the first 

business day thereafter.  

(2) When registering an offering of an indeterminate amount of registered index-linked 

annuity securities pursuant to paragraph (e)(1) of this section, the securities sold will be 

considered registered, for purposes of section 6(a) of the Act, if the registration fee has been paid 



314 

and the issuer has filed a Form 24F-2 filing pursuant to paragraph (e)(1) of this section not later 

than the end of the 90-day period.  

(3) A registration statement filed in accordance with the registration fee payment 

provisions of paragraph (e)(1) of this section will be considered filed as to the securities 

identified in the registration statement for purposes of this section and section 5 of the Act when 

it is received by the Commission, if it complies with all other requirements under the Act, 

including this part.  

(4) For purposes of this section, if an issuer ceases operations, the date the issuer ceases 

operations will be deemed to be the end of its fiscal year. In the case of a liquidation, merger, or 

sale of all or substantially all of the assets (“merger”) of the issuer, the issuer will be deemed to 

have ceased operations for the purposes of this section on the date the merger is consummated; 

provided, however, that in the case of a merger of an issuer or a series of an issuer 

(“Predecessor”) with another issuer or a series of an issuer (“Successor”), the Predecessor will 

not be deemed to have ceased operations and the Successor will assume the obligations, fees, and 

redemption credits of the Predecessor incurred pursuant to this section if the Successor:  

(i) Had no assets or liabilities, other than nominal assets or liabilities, and no operating 

history immediately prior to the merger;  

(ii) Acquired substantially all of the assets and assumed substantially all of the liabilities 

and obligations of the Predecessor; and  

(iii) The merger is not designed to result in the Predecessor merging with, or substantially 

all of its assets being acquired by, an issuer (or a series of an issuer) that would not meet the 

conditions of paragraph (e)(4)(i) of this section.  



315 

(5) An issuer paying the fee required by paragraph (e)(1) of this section or any portion 

thereof more than 90 days after the end of the fiscal year of the issuer shall pay to the 

Commission interest on unpaid amounts, calculated based on the interest rate in effect at the time 

of the interest payment by reference to the “current value of funds rate” on the Treasury 

Department's Bureau of Fiscal Service internet site at https://fiscal.treasury.gov/, or by calling 

(202) 874-6995, and using the following formula: I = (X) (Y) (Z/365), where: I = Amount of 

interest due; X = Amount of registration fee due; Y = Applicable interest rate, expressed as a 

fraction; Z = Number of days by which the registration fee payment is late. The payment of 

interest pursuant to this paragraph (e)(5) shall not preclude the Commission from bringing an 

action to enforce the requirements of this paragraph (e).  

(6) An immaterial or unintentional failure to comply with a requirement of this paragraph 

(e) will not result in a violation of section 6(a) of the Act (15 U.S.C. 77f(a)), so long as:  

(i) A good faith and reasonable effort was made to comply with the requirement; and  

(ii) In the case of a late payment of a registration fee, the issuer pays the registration fee 

and any interest due thereon as soon as practicable after discovery of the failure to pay the 

registration fee. 

8. Amend §230.457 by revising paragraph (u) to read as follows: 

§ 230.457 Computation of fee. 

* * * * * 

(u) Where an issuer elects or is required to register an offering of an indeterminate 

amount of exchange-traded vehicle securities in accordance with § 230.456(d) (Rule 456(d)) or 

registered index-linked annuity securities (as defined in §230.405 (Rule 405)) in accordance with 

§ 230.456(e) (Rule 456(e)), the registration fee is to be calculated in the following manner: 

(1) Determine the aggregate sale price of such securities sold during the fiscal year. 

https://www.ecfr.gov/current/title-17/section-230.456#p-230.456(d)
https://www.ecfr.gov/current/title-17/section-230.456#p-230.456(d)
https://www.ecfr.gov/current/title-17/section-230.456#p-230.456(d)


316 

(2) Determine the sum of: 

(i) The aggregate redemption or repurchase price of such securities redeemed or 

repurchased during the fiscal year; and 

(ii) The aggregate redemption or repurchase price of such securities redeemed or 

repurchased during a prior fiscal year that were not used previously to reduce registration fees 

payable to the Commission, if the prior fiscal year ended no earlier than August 1, 2021 in the 

case of exchange traded vehicle securities, or [EFFECTIVE DATE OF THE FINAL RULE] in 

the case of registered index-linked annuity securities. 

(3) Subtract the amount in paragraph (u)(2) of this section from the amount in paragraph 

(u)(1) of this section. If the resulting amount is positive, the amount is the net sales amount. If 

the resulting amount is negative, it is the amount of redemption credits available for use in future 

years to offset sales. 

(4) The registration fee is calculated by multiplying the net sales amount by the fee 

payment rate in effect on the date of the fee payment. If the issuer determines that it had net 

redemptions or repurchases for the fiscal year, no registration fee is due. 

9. Amend §230.485 by revising the section heading and paragraphs (a)(1) and (b) 

introductory text to read as follows: 

§ 230.485 Effective date of post-effective amendments filed by certain registered investment 

companies or issuers offering registered index-linked annuities. 

(a) * * * 

(1) Except as otherwise provided in this section, a post-effective amendment to a 

registration statement filed by a registered open-end management investment company, unit 

investment trust or, separate account as defined in section 2(a)(37) of the Investment Company 



317 

Act of 1940 [15 U.S.C. 80a-2(a)(37)] or to register an offering of a registered index-linked 

annuity securities (as defined in §230.405 (Rule 405)) shall become effective on the sixtieth day 

after the filing thereof, or a later date designated by the registrant on the facing sheet of the 

amendment, which date shall be no later than eighty days after the date on which the amendment 

is filed. 

* * * * * 

(b) Immediate effectiveness. Except as otherwise provided in this section, a post-effective 

amendment to a registration statement filed by a registered open-end management investment 

company, unit investment trust or separate account as defined in section 2(a)(37) of the 

Investment Company Act of 1940 [15 U.S.C. 80a-2(a)(37)] or to register an offering of a 

registered index-linked annuity securities shall become effective on the date upon which it is 

filed with the Commission, or a later date designated by the registrant on the facing sheet of the 

amendment, which date shall be not later than thirty days after the date on which the amendment 

is filed, except that a post-effective amendment including a designation of a new effective date 

pursuant to paragraph (b)(1)(iii) of this section shall become effective on the new effective date 

designated therein, Provided, that the following conditions are met: 

* * * * * 

10. Amend §230.497 by revising the section heading and paragraphs (c) and (e) to read as 

follows: 

§ 230.497 Filing of investment company or registered index-linked annuity prospectuses—

number of copies 

* * * * * 



318 

(c) For investment companies filing on §§239.15A and 274.11A of this chapter (Form N-

1A), §§239.17a and 274.11b of this chapter (Form N-3), §§239.17b and 274.11c of this chapter 

(Form N-4), or §§239.17c and 274.11d of this chapter (Form N-6), or an offering of registered 

index-linked annuities (as defined in Rule 405 (§230.405)) being filed on Form N-4, within five 

days after the effective date of a registration statement or the commencement of a public offering 

after the effective date of a registration statement, whichever occurs later, 10 copies of each form 

of prospectus and form of Statement of Additional Information used after the effective date in 

connection with such offering shall be filed with the Commission in the exact form in which it 

was used. Investment companies filing on Forms N-1A, N-3, N-4, or N-6 and issuers of 

registered index-linked annuities filing on Form N-4 must, if applicable pursuant to General 

Instruction C.3.(g) of Form N-1A, General Instruction C.3.(h) of Form N-3, General Instruction 

C.3.(h) of Form N-4, or General Instruction C.3.(h) of Form N-6, submit an Interactive Data File 

(as defined in §232.11 of this chapter).  

* * * * * 

(e) For investment companies filing on §§239.15A and 274.11A of this chapter (Form N-

1A), §§239.17a and 274.11b of this chapter (Form N-3), §§239.17b and 274.11c of this chapter 

(Form N-4), or §§239.17c and 274.11d of this chapter (Form N-6), or an offering of registered 

index-linked annuities being filed on Form N-4, after the effective date of a registration 

statement, no prospectus that purports to comply with Section 10 of the Act (15 U.S.C. 77j) or 

Statement of Additional Information that varies from any form of prospectus or form of 

Statement of Additional Information filed pursuant to paragraph (c) of this section shall be used 

until five copies thereof have been filed with, or mailed for filing to the Commission. Investment 

companies filing on Forms N-1A, N-3, N-4, or N-6 and issuers of registered index-linked 



319 

annuities filing on Form N-4 must, if applicable pursuant to General Instruction C.3.(g) of Form 

N-1A, General Instruction C.3.(h) of Form N-3, General Instruction C.3.(h) of Form N-4, or 

General Instruction C.3.(h) of Form N-6, submit an Interactive Data File (as defined in §232.11 

of this chapter).  

* * * * * 

11. Revise §230.498A to read as follows: 

§ 230.498A Summary Prospectuses for separate accounts offering variable annuity and 

variable life insurance contracts, and contracts offering registered index-linked options. 

(a) Definitions. For purposes of this section: 

Class means a class of a Contract that varies principally with respect to distribution-

related fees and expenses. 

Contract means a Variable Annuity Contract, a Variable Life Insurance Contract, or a 

RILA Contract as defined in this section, respectively, as well as any Variable Annuity Contract 

or RILA Contract that offers a combination of Index-Linked Options, Variable Options, and/or 

Fixed Options. 

Fixed Option means an Investment Option under a Contract pursuant to which the value 

of the Contract (for a Form N-3 or Form N-4 Registrant, either during an accumulation period or 

after annuitization, or both) will earn interest at a rate specified by the Company, subject to a 

minimum guaranteed rate under the Contract. 

Index-Linked Option means an Investment Option offered under a Contract, pursuant to 

which the value of the Contract, either during an accumulation period or after annuitization, or 

both, will earn positive or negative interest based, in part, on the performance of a specified 

index, rate, or benchmark (such as a registered exchange-traded fund that tracks an index). 



320 

Initial Summary Prospectus means the initial summary prospectus described in paragraph 

(b) of this section. 

Insurance Company means the insurance company issuing the Contract, which company 

is subject to State supervision. The Insurance Company may also be the depositor or sponsor of 

any Registered Separate Account in which the Contract participates. 

Investment Option means a Fixed Option, an Index-Linked Option, and/or a Variable 

Option, as applicable. 

Portfolio Company means any company in which a Registrant on Form N-4 or Form N-6 

invests and which may be selected as a Variable Option by the investor. 

Portfolio Company Prospectus means the Statutory Prospectus of a Portfolio 

Company and a summary prospectus of a Portfolio Company permitted by § 230.498. 

Registered Separate Account means a separate account (as defined in section 2(a)(14) of 

the Securities Act (15 U.S.C. 77b(a)(14)) that has an effective registration statement on §§ 

239.17a and 274.11b of this chapter (Form N-3), §§ 239.17b and 274.11c of this chapter (Form 

N-4), or §§ 239.17c and 274.11d of this chapter (Form N-6) and that has a 

current prospectus that satisfies the requirements of section 10(a) of the Act (15 U.S.C. 77j(a)). 

Registrant means, as applicable, a Registered Separate Account or the Insurance 

Company.  

RILA Contract means any accumulation contract or annuity contract, any portion thereof, 

or any unit of interest or participation therein, issued by an Insurance Company, that offers 

Index-Linked Options. 

Statement of Additional Information means the statement of additional 

information required by Part B of Form N-1A, Form N-3, Form N-4, or Form N-6.321 

Statutory Prospectus means a prospectus that satisfies the requirements of section 10(a) 

of the Act (15 U.S.C. 77j(a)). 

Summary Prospectus refers to both the Initial Summary Prospectus and the Updating 

Summary Prospectus. 

Updating Summary Prospectus means the updating summary prospectus described 

in paragraph (c) of this section. 

Variable Annuity Contract means any accumulation contract or annuity contract, any 

portion thereof, or any unit of interest or participation therein, issued by an Insurance Company, 

pursuant to which the value of the contract, either during an accumulation period or after 

annuitization, or both, varies according to the investment experience of a Portfolio Company. 

Variable Life Insurance Contract means a life insurance contract, issued by an Insurance 

Company, that provides for death benefits and cash values that may vary with the investment 

performance of any separate account. 

Variable Option means:  

(1) In the context of a Registrant on Form N-4 or Form N-6, an Investment Option under 

any Contract pursuant to which the value of the Contract (for a Form N-4 Registrant, either 

during an accumulation period or after annuitization, or both) varies according to the investment 

experience of a Portfolio Company;  

(2) In the context of a Registrant on Form N-3, any portfolio of investments in which 

a Registrant on Form N-3 invests and which may be selected as an option by the investor. 

(b) General Requirements for Initial Summary Prospectus. An Initial Summary 

Prospectus that complies with this paragraph (b) will be deemed to be a prospectus that is 

authorized under section 10(b) of the Act (15 U.S.C. 77j(b)) and section 24(g) of the Investment 



322 

Company Act (15 U.S.C. 80a-24(g)) for the purposes of section 5(b)(1) of the Act (15 U.S.C. 

77e(b)(1)). 

(1) Scope of Initial Summary Prospectus. An Initial Summary Prospectus may only 

describe a single Contract (but may describe more than one Class of the Contract) currently 

offered by the Registrant under the Statutory Prospectus to which the Initial Summary 

Prospectus relates. 

(2) Cover Page or Beginning of Initial Summary Prospectus. Include on the front cover 

page or the beginning of the Initial Summary Prospectus: 

(i) The Insurance Company’s name; 

(ii) The name of the Contract, and the Class or Classes if any, to which the Initial 

Summary Prospectus relates; 

(iii) A statement identifying the document as a “Summary Prospectus for New Investors”; 

(iv) The approximate date of the first use of the Initial Summary Prospectus; 

(v) The following legend, which for Initial Summary Prospectuses of Contracts registered 

on Form N-4 would be included along with the statements described in Item 1(a)(6) through (8) 

of Form N-4: 

This Summary Prospectus summarizes key features of the [Contract]. 

Before you invest, you should also review the prospectus for the [Contract], which 

contains more information about the [Contract's] features, benefits, and risks. You can find this 

document and other information about the [Contract] online at [______]. You can also obtain 

this information at no cost by calling [________] or by sending an email request to [______]. 

You may cancel your [Contract] within 10 days of receiving it without paying fees or 

penalties. In some states, this cancellation period may be longer. Upon cancellation, you will 



323 

receive either a full refund of the amount you paid with your application or your total contract 

value. You should review the prospectus, or consult with your investment professional, for 

additional information about the specific cancellation terms that apply. 

Additional information about certain investment products, including [variable 

annuities/registered index-linked annuities/variable life insurance contracts], has been prepared 

by the Securities and Exchange Commission's staff and is available at Investor.gov. 

(A) A Registrant may modify the legend so long as the modified legend contains 

comparable information. 

(B) The legend must provide a website address, other than the address of the 

Commission's electronic filing system; toll-free telephone number; and email address that 

investors can use to obtain the Statutory Prospectus and other materials, request other 

information about the Contract, and make investor inquiries. The website address must be 

specific enough to lead investors directly to the Statutory Prospectus and other materials that are 

required to be accessible under paragraph (h)(1) of this section, rather than to the home page or 

other section of the website on which the materials are posted. The website could be a central site 

with prominent links to each document. The legend may indicate, if applicable, that the Statutory 

Prospectus and other information are available from a financial intermediary (such as a broker-

dealer) through which the Contract may be purchased or sold. If a Registered Separate Account 

that has an effective registration statement on Form N-3 relies on § 270.30e-3 of this chapter to 

transmit a report, the legend must also include the website address required by § 270.30e-

3(c)(1)(iii) of this chapter if different from the website address required by this paragraph 

(b)(2)(v)(B). 



324 

(C) The paragraph of the legend regarding cancellation of the Contract may be omitted if 

not applicable. If this paragraph is included in the legend, the paragraph must be presented in a 

manner reasonably calculated to draw investor attention to that paragraph. 

(D) The legend may include instructions describing how a shareholder can elect to 

receive prospectuses or other documents and communications by electronic delivery. 

(3) Back Cover Page or Last Page of Initial Summary Prospectus. 

(i) If a Registrant incorporates any information by reference into the Summary 

Prospectus, include a legend identifying the type of document (e.g., Statutory Prospectus) from 

which the information is incorporated and the date of the document. If a Registrant incorporates 

by reference a part of a document, the legend must clearly identify the part by page, paragraph, 

caption, or otherwise. If information is incorporated from a source other than the Statutory 

Prospectus, the legend must explain that the incorporated information may be obtained, free of 

charge, in the same manner as the Statutory Prospectus. 

(ii) Include on the bottom of the back cover page or the last page of the Initial Summary 

Prospectus the EDGAR contract identifier for the contract in type size smaller than that generally 

used in the prospectus (e.g., 8-point modern type). 

(4) Table of Contents. An Initial Summary Prospectus may include a table of contents 

meeting the requirements of § 230.481(c). 

(5) Contents of Initial Summary Prospectus. An Initial Summary Prospectus must contain 

the information required by this paragraph (b)(5) with respect to the applicable registration form, 

and only the information required by this paragraph (b)(5), in the order provided in paragraphs 

(b)(5)(i) through (ix) of this section, except that, for an Initial Summary Prospectus related to a 



325 

Contract registered on Form N-4, provide the information provided in paragraph (b)(5)(ii) before 

the information provided by paragraph (b)(5)(i). 

(i) Under the heading “Important Information You Should Consider About the 

[Contract],” the information required by Item 2 of Form N-3, Item 3 of Form N-4, or Item 2 of 

Form N-6. 

(ii) Under the heading “Overview of the [Contract],” the information required by Item 3 

of Form N-3, Item 2 of Form N-4, or Item 3 of Form N-6. 

(iii) Under the heading “Standard Death Benefits,” the information required by Item 

10(a) of Form N-6. 

(iv) Under the heading “Benefits Available Under the [Contract],” the information 

required by Item 11(a) of Form N-3 or Item 10(a) of Form N-4. Under the heading “Other 

Benefits Available Under the [Contract],” the information required by Item 11(a) of Form N-6. 

(v) Under the heading “Buying the [Contract],” the information required by Item 12(a) of 

Form N-3, Item 11(a) of Form N-4, or Item 9(a) through (c) of Form N-6. 

(vi) Under the heading “How Your [Contract] Can Lapse,” the information required by 

Item 14(a) through (c) of Form N-6. 

(vii) Under the heading “Making Withdrawals: Accessing the Money in Your 

[Contract],” the information required by Item 13(a) of Form N-3, Item 12(a) of Form N-4, or 

Item 12(a) of Form N-6. 

(viii) Under the heading “Additional Information About Fees,” the information required 

by Item 4 of Form N-3, Item 4 of Form N-4, or Item 4 of Form N-6. 

(ix) Under the heading “Appendix: [Portfolio Companies][Investment Options/Portfolio 

Companies] Available Under the Contract,” include as an appendix the information required by 



326 

Item 18 of Form N-3, Item 17 of Form N-4, or Item 18 of Form N-6. Alternatively, an Initial 

Summary Prospectus for a Contract registered on Form N-3 may include the information 

required by Item 19 of Form N-3, under the heading “Additional Information About Investment 

Options Available Under the Contract.” 

(c) General Requirements for Updating Summary Prospectus. An Updating Summary 

Prospectus that complies with this paragraph (c) will be deemed to be a prospectus that is 

authorized under section 10(b) of the Act (15 U.S.C. 77j(b)) and section 24(g) of the Investment 

Company Act (15 U.S.C. 80a-24(g)) for the purposes of section 5(b)(1) of the Act (15 U.S.C. 

77e(b)(1)). 

(1) Use of Updating Summary Prospectus. A Registrant may only use an Updating 

Summary Prospectus if the Registrant uses an Initial Summary Prospectus for each currently 



327 

offered Contract described under the Statutory Prospectus to which the Updating Summary 

Prospectus relates. 

(2) Scope of Updating Summary Prospectus. An Updating Summary Prospectus may 

describe one or more Contracts (and more than one Class) described under the Statutory 

Prospectus to which the Updating Summary Prospectus relates. 

(3) Cover Page or Beginning of Updating Summary Prospectus. Include on the front 

cover page or at the beginning of the Updating Summary Prospectus: 

(i) The Insurance Company’s name; 

(ii) The name of the Contract(s) and the Class or Classes, if any, to which the Updating 

Summary Prospectus relates; 

(iii) A statement identifying the document as an “Updating Summary Prospectus”; 

(iv) The approximate date of the first use of the Updating Summary Prospectus; and 

(v) The following legend, which must meet the requirements of paragraphs (b)(2)(v)(A), 

(B), and (D) of this section, as applicable, and for Updating Summary Prospectuses of Contracts 

registered on Form N-4 would be included along with the statements described in Item 1(a)(6) 

through (8) of Form N-4: 

The prospectus for the [Contract] contains more information about the [Contract], 

including its features, benefits, and risks. You can find the current prospectus and other 



328 

information about the [Contract] online at [______]. You can also obtain this information at no 

cost by calling [________] or by sending an email request to [______]. 

Additional information about certain investment products, including [variable 

annuities/registered index-linked annuities/variable life insurance contracts], has been prepared 

by the Securities and Exchange Commission's staff and is available at Investor.gov. 

(4) Back Cover Page or Last Page of Updating Summary Prospectus. Include on the 

bottom of the back cover page or the last page of the Updating Summary Prospectus: 

(i) The legend required by paragraph (b)(3)(i) of this section; and 

(ii) The EDGAR contract identifier(s) for each contract in type size smaller than that 

generally used in the prospectus (e.g., 8-point modern type). 

(5) Table of Contents. An Updating Summary Prospectus may include a table of 

contents meeting the requirements of § 230.481(c). 

(6) Contents of Updating Summary Prospectus. An Updating Summary Prospectus must 

contain the information required by this paragraph (c)(6) with respect to the applicable 

registration form, in the order provided in paragraphs (c)(6)(i) through (iv) of this section. 

(i) If any changes have been made with respect to the Contract after the date of the most 

recent Updating Summary Prospectus or Statutory Prospectus that was sent or given to investors 

with respect to the availability of Investment Options (for Registrants on Form N-3) or Portfolio 

Companies (for Registrants on Forms N-4 and N-6) under the Contract (including, for RILA 

Contracts, a change to any of the features of the Index-Linked Options disclosed in the table 

that Item 17(b) of Form N-4 requires), or the disclosure that the Registrant included in response 

to Item 2 (Key Information), Item 3 (Overview of the Contract), Item 4 (Fee Table), Item 11 

(Benefits Available Under the Contract), Item 12 (Purchases and Contract Value), or Item 13 



329 

(Surrenders and Withdrawals) of Form N-3; Item 2 (Overview of the Contract), Item 3 (Key 

Information), Item 4 (Fee Table), Item 10 (Benefits Available Under the Contract), Item 11 

(Purchases and Contract Value), or Item 12 (Surrenders and Withdrawals) of Form N-4; and 

Item 2 (Key Information), Item 3 (Overview of the Contract), Item 4 (Fee Table), Item 9 

(Premiums), Item 10 (Standard Death Benefits), Item 11 (Other Benefits Available Under the 

Contract), Item 12 (Surrenders and Withdrawals), or Item 14 (Lapse and Reinstatement) of 

Form N-6, include the following as applicable, under the heading “Updated Information About 

Your [Contract]”: 

(A) The following legend: “The information in this Updating Summary Prospectus is a 

summary of certain [Contract] features that have changed since the Updating Summary 

Prospectus dated [date]. This may not reflect all of the changes that have occurred since you 

entered into your [Contract].” 

(B) As applicable, provide a concise description of each change specified in paragraph 

(c)(6)(i) of this section. Provide enough detail to allow investors to understand the change and 

how it will affect investors, including indicating whether the change only applies to certain 

Contracts described in the Updating Summary Prospectus. 

(ii) In addition to the changes specified in paragraph (c)(6)(i) of this section, a Registrant 

may provide a concise description of any other information relevant to the Contract within the 

time period that paragraph (c)(6)(i) of this section specifies, under the heading “Updated 

Information About Your [Contract].” Any additional information included pursuant to this 



330 

paragraph (c)(6)(ii) should not, by its nature, quantity, or manner of presentation, obscure or 

impede understanding of the information that paragraph (c)(6)(i) of this section requires. 

(iii) Under the heading “Important Information You Should Consider About the 

[Contract],” provide the information required by Item 2 of Form N-3, Item 3 of Form N-4, or 

Item 2 of Form N-6. 

(iv) Under the heading “Appendix: [Portfolio Companies/Investment Options/Portfolio 

Companies] Available Under the [Contract],” include as an appendix the information required by 

Item 18 of Form N-3, Item 17 of Form N-4, or Item 18 of Form N-6. Alternatively, an Updating 

Summary Prospectus for a Contract registered on Form N-3 may include, under the heading 

“Additional Information About [Investment Options] Available Under the [Contract],” the 

information required by Item 19 of Form N–3. 

(d) Incorporation by Reference into a Summary Prospectus. 

(1) Except as provided by paragraph (d)(2) of this section, information may not be 

incorporated by reference into a Summary Prospectus. Information that is incorporated by 

reference into a Summary Prospectus in accordance with paragraph (d)(2) of this section need 

not be sent or given with the Summary Prospectus. 

(2) A Registrant may incorporate by reference into a Summary Prospectus any or all of 

the information contained in the Registrant's Statutory Prospectus and Statement of Additional 

Information, and any information from the Registrant's reports under § 270.30e-1 of this chapter 

that the Registrant has incorporated by reference into the Registrant's Statutory Prospectus, 

provided that: 

(i) The conditions of paragraphs (b)(2)(v)(B), (c)(3)(v), and (h) of this section are met; 



331 

(ii) A Registrant may not incorporate by reference into a Summary Prospectus 

information that paragraphs (b) and (c) of this section require to be included in an Initial 

Summary Prospectus or Updating Summary Prospectus, respectively; and 

(iii) Information that is permitted to be incorporated by reference into the Summary 

Prospectus may be incorporated by reference into the Summary Prospectus only by reference to 

the specific document that contains the information, not by reference to another document that 

incorporates such information by reference. 

(3) For purposes of § 230.159, information is conveyed to a person not later than the time 

that a Summary Prospectus is received by the person if the information is incorporated by 

reference into the Summary Prospectus in accordance with paragraph (d)(2) of this section. 

(e) Terms used in the Summary Prospectus. Define special terms used in the Initial 

Summary Prospectus and Updating Summary Prospectus using any presentation style that clearly 

conveys their meaning to investors, such as the use of a glossary or list of definitions. 

(f) Transfer of the Contract Security. Any obligation under section 5(b)(2) of the Act (15 

U.S.C. 77e(b)(2)) to have a Statutory Prospectus precede or accompany the carrying or delivery 

of a Contract security in an offering registered on Form N-3, Form N-4, or Form N-6 is satisfied 

if: 

(1) A Summary Prospectus is sent or given no later than the time of the carrying or 

delivery of the Contract security (an Initial Summary Prospectus in the case of a purchase of a 

new Contract, or an Updating Summary Prospectus in the case of additional purchase payments 

in an existing Contract); 



332 

(2) The Summary Prospectus is not bound together with any materials except Portfolio 

Company Prospectuses for Portfolio Companies available as Variable Options under the 

Contract, provided that: 

(i) All of the Portfolio Companies are available as investment options to the person to 

whom such documents are sent or given; and 

(ii) A table of contents identifying each Portfolio Company Prospectus that is bound 

together, and the page number on which each document is found, is included at the beginning or 

immediately following a cover page of the bound materials. 

(3) The Summary Prospectus that is sent or given satisfies the requirements of paragraph 

(b) or (c) of this section, as applicable, at the time of the carrying or delivery of the Contract 

security; and 

(4) The conditions set forth in paragraph (h) of this section are satisfied. 

(g) Sending Communications. A communication relating to an offering registered on 

Form N-3, Form N-4, or Form N-6 sent or given after the effective date of a Contract's 

registration statement (other than a prospectus permitted or required under section 10 of the Act) 

shall not be deemed a prospectus under section 2(a)(10) of the Act (15 U.S.C. 77b(a)(10)) if: 

(1) It is proved that prior to or at the same time with such communication a 

Summary Prospectus was sent or given to the person to whom the communication was made; 

(2) The Summary Prospectus is not bound together with any materials, except as 

permitted by paragraph (f)(2) of this section; 

(3) The Summary Prospectus that was sent or given satisfies the requirements of 

paragraph (b) or (c) of this section, as applicable, at the time of such communication; and 

(4) The conditions set forth in paragraph (h) of this section are satisfied. 



333 

(h) Availability of the Statutory Prospectus and Certain Other Documents. 

(1) The current Initial Summary Prospectus, Updating Summary Prospectus, Statutory 

Prospectus, Statement of Additional Information, and in the case of a Registrant on Form N-3, 

the Registrant’s most recent annual and semi-annual reports to shareholders under § 270.30e-1 of 

this chapter, are publicly accessible, free of charge, at the website address specified on the cover 

page or beginning of the Summary Prospectuses, on or before the time that the 

Summary Prospectuses are sent or given and current versions of those documents remain on the 

website through the date that is at least 90 days after: 

(i) In the case of reliance on paragraph (f) of this section, the date that 

the Contract security is carried or delivered; or 

(ii) In the case of reliance on paragraph (g) of this section, the date that the 

communication is sent or given. 

(2) The materials that are accessible in accordance with paragraph (h)(1) of this section 

must be presented on the website in a format, or formats, that: 

(i) Are human-readable and capable of being printed on paper in human-readable format; 

(ii) Permit persons accessing the Statutory Prospectus or Statement of Additional 

Information for the Contract to move directly back and forth between each section heading in a 

table of contents of such document and the section of the document referenced in that section 

heading; provided that, in the case of the Statutory Prospectus, the table of contents is either 

required by § 230.481(c) or contains the same section headings as the table of contents required 

by § 230.481(c); and 

(iii) Permit persons accessing a Summary Prospectus to move directly back and forth 

between: 



334 

(A) Each section of the Summary Prospectus and any section of the Statutory 

Prospectus and Contract Statement of Additional Information that provides additional detail 

concerning that section of the Summary Prospectus; or 

(B) Links located at both the beginning and end of the Summary Prospectus, or that 

remain continuously visible to persons accessing the Summary Prospectus, and tables of contents 

of both the Statutory Prospectus and the Contract Statement of Additional Information that meet 

the requirements of paragraph (h)(2)(ii) of this section. 

(iv) Permit persons accessing the Summary Prospectus to view the definition of each 

special term used in the Summary Prospectus (as required by paragraph (e) of this section) upon 

command (e.g., by moving or “hovering” the computer's pointer or mouse over the term, or 

selecting the term on a mobile device); or permits persons accessing 

the Contract Summary Prospectus to move directly back and forth between each special term and 

the corresponding entry in any glossary or list of definitions in 

the Contract Summary Prospectus (as described in paragraph (e) of this section). 

(3) Persons accessing the materials specified in paragraph (h)(1) of this section must be 

able to permanently retain, free of charge, an electronic version of such materials in a format, or 

formats, that meet each of the requirements of paragraphs (h)(2)(i) and (ii) of this section. 

(4) The conditions set forth in paragraphs (h)(1) through (3) of this section shall be 

deemed to be met, notwithstanding the fact that the materials specified in paragraph (h)(1) of this 

section are not available for a time in the manner required by paragraphs (h)(1) through (3) of 

this section, provided that: 



335 

(i) The Registrant has reasonable procedures in place to ensure that the 

specified materials are available in the manner required by paragraphs (h)(1) through (3) of this 

section; and 

(ii) The Registrant takes prompt action to ensure that the specified documents become 

available in the manner required by paragraphs (h) through (3) of this section, as soon as 

practicable following the earlier of the time at which it knows or reasonably should have known 

that the documents are not available in the manner required by paragraphs (h)(1) through (3) of 

this section. 

(i) Other Requirements 

(1) Delivery upon request. If paragraph (f) or (g) of this section is relied on with respect 

to a Contract, the Registrant (or a financial intermediary through which the Contract may be 

purchased) must send, at no cost to the requestor and by U.S. first class mail or other reasonably 

prompt means, a paper copy of the Contract Statutory Prospectus, Contract Statement of 

Additional Information, and in the case of a Registrant on Form N-3, the Registrant's most recent 

annual and semi-annual reports to shareholders under § 270.30e-1 of this chapter, to any person 

requesting such a copy within three business days after receiving a request for a paper copy. If 

paragraph (f) or (g) of this section is relied on with respect to a Contract, the Registrant (or a 

financial intermediary through which Contract may be purchased) must send, at no cost to the 

requestor, and by email, an electronic copy of any of the documents listed in this paragraph (i)(1) 

to any person requesting a copy of such document within three business days after receiving a 

request for an electronic copy. The requirement to send an electronic copy of a document may be 

satisfied by sending a direct link to the online document; provided that a current version of the 

document is directly accessible through the link from the time that the email is sent through the 



336 

date that is six months after the date that the email is sent and the email explains both how long 

the link will remain useable and that, if the recipient desires to retain a copy of the document, he 

or she should access and save the document. 

(2) Greater prominence. If paragraph (f) or (g) of this section is relied on with respect to 

a Contract, the Summary Prospectus shall be given greater prominence than any materials that 

accompany the Summary Prospectus. 

(3) Convenient for reading and printing. If paragraph (f) or (g) of this section is relied on 

with respect to a Contract: 

(i) The materials that are accessible in accordance with paragraph (h)(1) of this section 

must be presented on the website in a format, or formats, that are convenient for both reading 

online and printing on paper; and 

(ii) Persons accessing the materials that are accessible in accordance with paragraph 

(h)(1) of this section must be able to permanently retain, free of charge, an electronic version of 

such materials in a format, or formats, that are convenient for both reading online and printing on 

paper. 

(4) Website addresses. If paragraph (f) or (g) of this section is relied on with respect to 

a Contract, any website address that is included in an electronic version of the 

Summary Prospectus must include an active hyperlink or provide another means of facilitating 

access through equivalent methods or technologies that lead directly to the relevant website 

address. This paragraph (i)(4) does not apply to electronic versions of a 

Summary Prospectus that are filed on the EDGAR system. 

(5) Compliance with this paragraph (i) not a condition to reliance on paragraph (f) or 

(g) of this section. Compliance with this paragraph (i) is not a condition to the ability to rely on 



337 

paragraph (f) or (g) of this section with respect to a Contract, and failure to comply with this 

paragraph (i) does not negate the ability to rely on paragraph (f) or (g) of this section. 

(j) Portfolio Company Prospectuses –  

(1) Transfer of the Portfolio Company security. Any obligation under section 5(b)(2) of 

the Act to have a Statutory Prospectus precede or accompany the carrying or delivery of 

a Portfolio Company security is satisfied if, and information contained in the documents 

referenced in paragraph (j)(1)(ii) of this section is conveyed for purposes of § 230.159 when: 

(i) An Initial Summary Prospectus is used for each currently offered Contract described 

under the related registration statement; 

(ii) A summary prospectus is used for the Portfolio Company (if the Portfolio 

Company is registered on Form N-1A); and 

(iii) The current summary prospectus, Statutory Prospectus, Statement of Additional 

Information, and most recent annual and semi-annual reports to shareholders under § 270.30e-1 

of this chapter for the Portfolio Company are publicly accessible, free of charge, at the same 

website address referenced in paragraph (h)(1) of this section, and are accessible under 

the conditions set forth in paragraphs (h)(1), (h)(2)(i) and (ii), and (h)(3) and (4) of this section, 

with respect to the availability of documents relating to the Contract. 

(2) Communications. Any communication relating to a Portfolio Company (other than 

a prospectus permitted or required under section 10 of the Act) shall not be deemed 

a prospectus under section 2(a)(10) of the Act (15 U.S.C. 77b(a)(10)) if the conditions set forth 

in paragraph (j)(1) of this section are satisfied. 

(3) Other requirements. The materials referenced in paragraph (j)(1)(iii) of this section 

must be delivered upon request, presented, and able to be retained under the conditions set forth 



338 

in paragraphs (i)(1) and (3) of this section. Compliance with this paragraph (j)(3) is not a 

condition to the ability to rely on paragraph (j)(1) or (2) of this section, and failure to 

comply with this paragraph (j)(3) does not negate the ability to rely on paragraph (j)(1) or (2) of 

this section. 

PART 232— REGULATION S-T—GENERAL RULES AND REGULATIONS FOR 

ELECTRONIC FILINGS 

12. The general authority citation for part 232 continues to read as follows: 

Authority: 15 U.S.C. 77c, 77f, 77g, 77h, 77j, 77s(a), 77z-3, 77sss(a), 78c(b), 78l, 78m, 

78n, 78o(d), 78w(a), 78ll, 80a-6(c), 80a-8, 80a-29, 80a-30, 80a-37, 80b-4, 80b-6a, 80b-11, 7201 

et seq.; and 18 U.S.C. 1350, unless otherwise noted. 

* * * * * 

13. Amend §232.313 by revising paragraphs (a) and (b) to read as follows: 

§ 232.313 Identification of investment company type and series and/or class (or contract). 

(a) Registered investment companies, business development companies, and offerings of 

registered index-linked annuities must indicate their investment company type, based on whether 

the registrant's last effective registration statement or amendment (other than a merger/proxy 

filing on Form N-14 (§ 239.23 of this chapter) was filed on Form N-1 (§§ 239.15 and 274.11 of 

this chapter), Form N-1A (§§ 239.15A and 274.11A of this chapter), Form N-2 (§§ 239.14 and 

274.11a-1 of this chapter), Form N-3 (§§ 239.17A and 274.11b of this chapter), Form N-4 (§§ 

239.17b and 274.11c of this chapter), Form N-5 (§§ 239.24 and 274.5 of this chapter), Form N-6 

(§§ 239.17c and 274.11d of this chapter), Form S-1 (§ 239.11 of this chapter), Form S-3 (§ 

239.13 of this chapter), or Form S-6 (§ 239.16 of this chapter) in those EDGAR submissions 

identified in the EDGAR Filer Manual.  



339 

(b) Registered investment companies or offerings of registered index-linked annuities 

whose last effective registration statement or amendment (other than a merger/proxy filing on 

Form N-14 (§ 239.23 of this chapter) was filed on Form N-1A (§§ 239.15A and 274.11A of this 

chapter), Form N-3 (§§ 239.17A and 274.11b of this chapter), Form N-4 (§§ 239.17b and 

274.11c of this chapter), or Form N-6 (§§ 239.17c and 274.11d of this chapter) must, under the 

procedures set forth in the EDGAR Filer Manual:  

(1) Provide electronically, and keep current, information concerning their existing and 

new series and/or classes (or contracts, in the case of separate accounts), including series and/or 

class (contract) name and ticker symbol, if any, and be issued series and/or class (or contract) 

identification numbers;  

(2) Deactivate for EDGAR purposes any series and/or class (or contract, in the case of 

separate accounts) that are no longer offered, go out of existence, or deregister following the last 

filing for that series and/or class (or contract, in the case of separate accounts), but the registrant 

must not deactivate the last remaining series unless the registrant deregisters; and  

(3) For those EDGAR submissions identified in the EDGAR Filer Manual, include all 

series and/or class (or contract) identifiers of each series and/or class (or contract) on behalf of 

which the filing is made. 

* * * * *  

14. Amend §232.405 by revising paragraphs (a)(3)(i) introductory text, (a)(3)(ii), (b)(1) 

introductory text, (b)(2) introductory text, (b)(2)(iii), and the final sentence of Note 1 to the 

section to read as follows: 

§ 232.405 Interactive Data File Submissions. 

* * * * * 



340 

(a) *    *    * 

(3) *    *    * 

(i) If the electronic filer is not a management investment company registered under the 

Investment Company Act of 1940 (15 U.S.C. 80a et seq.), a separate account as defined in 

Section 2(a)(14) of the Securities Act (15 U.S.C. 77b(a)(14)) registered under the Investment 

Company Act of 1940, a registered index-linked annuity issuer as defined in Rule 405 under the 

Securities Act (17 CFR 232.405), a business development company as defined in Section 

2(a)(48) of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(48)), a unit investment 

trust as defined in Section 4(2) of the Investment Company Act of 1940 (15 U.S.C. 80a-4), or a 

clearing agency that provides a central matching service, and is not within one of the categories 

specified in paragraph (f)(1)(i) of this section, as partly embedded into a filing with the 

remainder simultaneously submitted as an exhibit to:  

*    *    *    *    * 

(ii) If the electronic filer is a management investment company registered under the 

Investment Company Act of 1940 (15 U.S.C. 80a et seq.), a separate account (as defined in 

Section 2(a)(14) of the Securities Act (15 U.S.C. 77b(a)(14)) registered under the Investment 

Company Act of 1940, a registered index-linked annuity issuer as defined in Rule 405 under the 

Securities Act (17 CFR 232.405), a business development company as defined in Section 

2(a)(48) of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(48)), a unit investment 

trust as defined in Section 4(2) of the Investment Company Act of 1940 (15 U.S.C. 80a-4), or a 

clearing agency that provides a central matching service, and is not within one of the categories 

specified in paragraph (f)(1)(ii) of this section, as partly embedded into a filing with the341 

remainder simultaneously submitted as an exhibit to a filing that contains the disclosure this 

section requires to be tagged; and 

*    *    *    *    * 

(b) *    *    * 

(1) If the electronic filer is not a management investment company registered under the 

Investment Company Act of 1940 (15 U.S.C. 80a et seq.), a separate account (as defined in 

Section 2(a)(14) of the Securities Act (15 U.S.C. 77b(a)(14)) registered under the Investment 

Company Act of 1940, a registered index-linked annuity issuer as defined in Rule 405 under the 

Securities Act (17 CFR 232.405), a business development company as defined in Section 

2(a)(48) of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(48)), a unit investment 

trust as defined in Section 4(2) of the Investment Company Act of 1940 (15 U.S.C. 80a-4), or a 

clearing agency that provides a central matching service, an Interactive Data File must consist of 

only a complete set of information for all periods required to be presented in the corresponding 

data in the Related Official Filing, no more and no less, from all of the following categories: 

*    *    *    *    * 

(2) If the electronic filer is an open-end management investment company registered 

under the Investment Company Act of 1940, a separate account (as defined in Section 2(a)(14) of 

the Securities Act) registered under the Investment Company Act of 1940 (15 U.S.C. 80a et 

seq.), a registered index-linked annuity issuer as defined in Rule 405 under the Securities Act (17 

CFR 232.405), a unit investment trust as defined in Section 4(2) of the Investment Company Act 

of 1940 (15 U.S.C. 80a-4), or a clearing agency that provides a central matching service, an 

Interactive Data File must consist of only a complete set of information for all periods required 



342 

to be presented in the corresponding data in the Related Official Filing, no more and no less, 

from the information set forth in: 

* * * * * 

(iii) Items 2(b)(2), 2(d), 3, 4, 5, 6(a) (instruction), 6(c)(1), 6(d), 7(e), 10, 17, 26(c), and 

31A of §§ 239.17b and 274.11c of this chapter (Form N-4); 

* * * * * 

Note 1 to § 232.405: *   *   *   For an issuer that is a management investment company or 

separate account registered under the Investment Company Act of 1940 (15 U.S.C. 80a et seq.), a 

registered index-linked annuity issuer as defined in Rule 405 under the Securities Act (17 CFR 

232.405), a business development company as defined in Section 2(a)(48) of the Investment 

Company Act of 1940 (15 U.S.C. 80a-2(a)(48)), or a unit investment trust as defined in Section 

4(2) of the Investment Company Act of 1940 (15 U.S.C. 80a-4), General Instruction C.3.(g) of 

Form N-1A, General Instruction I of Form N-2, General Instruction C.3.(h) of Form N-3, 

General Instruction C.3.(h) of Form N-4, General Instruction C.3.(h) of Form N-6, General 

Instruction 2.(l) of Form N-8B-2 (§ 274.12 of this chapter), General Instruction 5 of Form S-6, 

and General Instruction C.4 of Form N-CSR, as applicable, specifies the circumstances under 

which an Interactive Data File must be submitted. 

PART 239—FORMS PRESCRIBED UNDER THE SECURITIES ACT OF 1933 

15. The general authority citation for part 239 continues to read as follows: 

Authority: 15 U.S.C. 77c, 77f, 77g, 77h, 77j, 77s, 77z-2, 77z-3, 77sss, 78c, 

78l, 78m,78n, 78o(d), 78o-7 note, 78u-5, 78w(a), 78ll,78mm, 80a-2(a), 80a-3, 80a-8, 80a-9, 80a-

10, 80a-13, 80a-24, 80a-26, 80a-29, 80a-30, 80a-37; and sec. 71003 and sec. 84001, Pub. L. 114-

94, 129 Stat. 1321, unless otherwise noted. 

* * * * * 



343 

16. Revise Form N-4 (referenced in §§ 239.17b and 274.11c). 

Note: Form N-4 is attached as Appendix A to this document. Form N-4 does not appear in 

the Code of Federal Regulations. 

17. Amend Form N-6 (referenced in §§ 239.17c and 274.11d) by revising Instruction 3 to 

Item 30. 

Note: Form N-6 is attached as Appendix B to this document. Form N-6 will not appear in 

the Code of Federal Regulations. 

18. Add § 239.66 to read as follows: 

§ 239.66 Form 24F–2, annual filing of securities sold pursuant to registration of certain 

investment company securities and registered index-linked annuities. 

Form 24F–2 shall be used as the annual report filed by face amount certificate 

companies, open-end management companies, unit investment trusts, and registered index-linked 

annuities pursuant to §§ 230.456, § 230.457, or 270.24f-2 of this chapter for reporting securities 

sold during the fiscal year.  

19. Revise Form 24F-2 (referenced in §§ 239.66 and 274.24). 

Note: Form 24F-2 is attached as Appendix C to this document. Form 24F-2 will not appear 

in the Code of Federal Regulations. 

PART 274 — FORMS PRESCRIBED UNDER THE INVESTMENT COMPANY ACT OF 

1940 

20. The authority citation for part 274 continues to read as follows: 

Authority:  15 U.S.C. 77f, 77g, 77h, 77j, 77s, 78c(b), 78l, 78m, 78n, 78o(d), 80a-8, 

80a-24, 80a-26, 80a-29, and 80a-37, unless otherwise noted. 

* * * * * 



344 

21. Revise § 274.24 to read as follows: 

§ 274.24 Form 24F-2, annual filing of securities sold pursuant to registration of certain 

investment company securities and registered index-linked annuities. 

Form 24F-2 shall be used as the annual report filed by face amount certificate companies, 

open-end management companies, unit investment trusts, and registered index-linked annuities 

pursuant to §§ 230.456, 230.457, or 270.24f–2 of this chapter for reporting securities sold during 

the fiscal year. 

By the Commission. 

Dated: September 29, 2023. 

 

 

Vanessa Countryman 

Secretary. 

Note: The following appendices will not appear in the Code of Federal Regulations. 

  



 

Appendix A—Form N-4 

UNITED STATES 
SECURITIES AND EXCHANGE COMMISSION 

Washington, DC 20549 
 

FORM N-4 
 

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 

Pre-Effective Amendment No. _____  

Post-Effective Amendment No. _____  

and/or 

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 

Amendment No. _____  

(Check appropriate box or boxes.) 

__________________________________________________________________________ 
(Exact Name of Registered Separate Account) 

__________________________________________________________________________ 
(Name of Insurance Company) 

__________________________________________________________________________ 
(Address of Insurance Company’s Principal 

Executive Offices) 
(Zip Code) 

__________________________________________________________________________ 
(Insurance Company’s Telephone Number, including Area Code) 

__________________________________________________________________________ 
(Name and Address of Agent for Service) 

Approximate Date of Proposed Public Offering: __________________________________________ 
 

It is proposed that this filing will become effective (check appropriate box): 

 immediately upon filing pursuant to paragraph (b) 
 on (date) pursuant to paragraph (b) 
 60 days after filing pursuant to paragraph (a)(1) 
 on (date) pursuant to paragraph (a)(1) of rule 485 under the Securities Act. 

 

 



 
 

If appropriate, check the following box: 
 
 This post-effective amendment designates a new effective date for a previously filed post-

effective amendment. 

Check each box that appropriately characterizes the Registrant: 

 New Registrant (as applicable, a Registered Separate Account or Insurance Company that 
has not filed a Securities Act registration statement or amendment thereto within 3 years 
preceding this filing) 

 Emerging Growth Company (as defined by Rule 12b-2 under the Securities Exchange Act of 
1934 (“Exchange Act”)) 

 If an Emerging Growth Company, indicate by check mark if the Registrant has elected not 
to use the extended transition period for complying with any new or revised financial 
accounting standards provided pursuant to Section 7(a)(2)(B) of Securities Act. 

 Relying on Rule 12h-7 under the Exchange Act 
 

Omit from the facing sheet reference to the other Act if the registration statement or 
amendment is filed under only one of the Acts. Include the “Approximate Date of Proposed 
Public Offering” only where securities are being registered under the Securities Act of 1933. 

Form N-4 is to be used by (1) separate accounts that are unit investment trusts that 
offer variable annuity contracts to register under the Investment Company Act of 1940 and 
to offer their securities under the Securities Act of 1933, (2) insurance companies to 
register index-linked annuity contracts under the Securities Act of 1933, and (3) insurance 
companies to register annuity contracts that have any combination of these options under 
the applicable statutes. The Commission has designed Form N-4 to provide investors with 
information that will assist them in making a decision about investing in these contracts. 
The Commission also may use the information provided on Form N-4 in its regulatory, 
disclosure review, inspection, and policy making roles. 

A Registrant is required to disclose the information specified by Form N-4, and the 
Commission will make this information public. A Registrant is not required to respond to the 
collection of information contained in Form N-4 unless the Form displays a currently valid 
Office of Management and Budget (“OMB”) control number. Please direct comments 
concerning the accuracy of the information collection burden estimate and any suggestions 
for reducing the burden to Secretary, Securities and Exchange Commission, 100 F Street, 
N.E., Washington, DC  20549. The OMB has reviewed this collection of information under 
the clearance requirements of 44 U.S.C. § 3507.



  

CONTENTS OF FORM N-4 

GENERAL INSTRUCTIONS................................................................................................................................................................. iv 
A. Definitions........................................................................................................................................................................................ iv 
B. Filing and Use of Form N-4 .............................................................................................................................................................. v 
C. Preparation of the Registration Statement .................................................................................................................................... vi 
D. Incorporation by Reference ............................................................................................................................................................. x 

PART A - INFORMATION REQUIRED IN A PROSPECTUS .................................................................................................................... 1 
Item 1. Front and Back Cover Pages ....................................................................................................................................................... 1 
Item 2. Overview of the Contract ............................................................................................................................................................. 2 
Item 3. Key Information ............................................................................................................................................................................ 4 
Item 4. Fee Table ................................................................................................................................................................................... 10 
Item 5. Principal Risks of Investing in the Contract ............................................................................................................................. 14 
Item 6. Description of Insurance Company, Registered Separate Account, and Investment Options.............................................. 15 
Item 7. Charges ...................................................................................................................................................................................... 21 
Item 8. General Description of Contracts ............................................................................................................................................. 23 
Item 9. Annuity Period ........................................................................................................................................................................... 25 
Item 10. Benefits Available Under the Contract................................................................................................................................... 25 
Item 11. Purchases and Contract Value ............................................................................................................................................... 27 
Item 12. Surrenders and Withdrawals .................................................................................................................................................. 27 
Item 13. Loans ....................................................................................................................................................................................... 28 
Item 14. Taxes ....................................................................................................................................................................................... 29 
Item 15. Legal Proceedings ................................................................................................................................................................... 29 
Item 16. Financial Statements .............................................................................................................................................................. 29 
Item 17. Investment Options Available Under the Contract ................................................................................................................ 29 

PART B - INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION ................................................................... 35 
Item 18. Cover Page and Table of Contents ........................................................................................................................................ 35 
Item 19. General Information and History ............................................................................................................................................ 35 
Item 20. Non-Principal Risks of Investing in the Contract ................................................................................................................... 36 
Item 21. Services ................................................................................................................................................................................... 36 
Item 22. Purchase of Securities Being Offered .................................................................................................................................... 37 
Item 23. Underwriters ............................................................................................................................................................................ 38 
Item 24. Calculation of Performance Data ........................................................................................................................................... 39 
Item 25. Annuity Payments ................................................................................................................................................................... 41 
Item 26. Financial Statements .............................................................................................................................................................. 41 

PART C - OTHER INFORMATION ...................................................................................................................................................... 44 
Item 27. Exhibits .................................................................................................................................................................................... 44 
Item 28. Directors and Officers of the Insurance Company ................................................................................................................ 46 
Item 29. Persons Controlled by or Under Common Control with the Insurance Company or the Registered Separate Account ... 46 
Item 30. Indemnification ....................................................................................................................................................................... 46 
Item 31. Principal Underwriters ............................................................................................................................................................ 47 
Item 31A. Information about Contracts with Index-Linked Options .................................................................................................... 48 
Item 32. Location of Accounts and Records ........................................................................................................................................ 48 
Item 33. Management Services ............................................................................................................................................................ 48 
Item 34. Fee Representation and Undertakings .................................................................................................................................. 48 

SIGNATURES .................................................................................................................................................................................. 50 
 

  



  

GENERAL INSTRUCTIONS 

A. Definitions 

References to sections and rules in this Form N-4 are to the Investment Company Act of 1940 [15 
U.S.C. 80a-1 et seq.] (the “Investment Company Act”), unless otherwise indicated. Terms used in this Form 
N-4 have the same meaning as in the Investment Company Act or the related rules, unless otherwise 
indicated. As used in this Form N-4, the terms set out below have the following meanings: 

“Class” means a class of a Contract that varies principally with respect to distribution-related fees 
and expenses. 

“Contract” means any accumulation contract or annuity contract, any portion thereof, or any unit of 
interest or participation therein issued by an Insurance Company that offers Index-Linked Options, and/or 
Variable Options, and/or Fixed Options, as applicable, pursuant to the registration statement prepared on 
this Form. 

“Contract Adjustment” means a positive or negative adjustment made to the value of the Contract 
by the Insurance Company if amounts are withdrawn from an Index-Linked Option or from the Contract 
before the end of a specified period. This adjustment may be based on calculations using a predetermined 
formula, or a change in interest rates, or some other factor or benchmark. 

“Crediting Period” means the period of time over which an Index’s performance is measured, 
subject to applicable limits on Index gains and losses, to determine the amount of positive or negative 
interest that will be credited to an Index-Linked Option at the end of the period. 

“Fixed Option” means an Investment Option under the Contract pursuant to which the value of the 
Contract, either during an accumulation period or after annuitization, or both, will earn interest at a rate 
specified by the Insurance Company, subject to a minimum guaranteed rate under the Contract. 

“Index” or "Indexes" means any index, rate, or benchmark (such as a registered exchange-traded 
fund that tracks an index) used in the calculation of positive or negative interest credited to an Index-
Linked Option. 

 
“Index-Linked Option” means an Investment Option offered under any Contract, pursuant to which 

the value of the Contract, either during an accumulation period or after annuitization, or both, will earn 
positive or negative interest based, in part, on the performance of a specified Index. 

“Insurance Company” means the insurance company issuing the Contract, which company is 
subject to state supervision. The Insurance Company may be the depositor or sponsor of any Registered 
Separate Account in which the Contract participates. If there is more than one Insurance Company, the 
information called for in this Form about the Insurance Company shall be provided for each Insurance 
Company. 

“Investment Option” means a Fixed Option, an Index-Linked Option, and/or a Variable Option, as 
applicable. 

“Platform Charge” means any fee charged by the Insurance Company to make a Portfolio Company 
available in connection with a Variable Option under the Contract, and that varies solely on the basis of the 
Portfolio Company selected. 

“Portfolio Company” means any investment company in which the Registered Separate Account 
invests and which may be selected by the investor in connection with a Variable Option. 

“Registered Separate Account” means a separate account (as defined in section 2(a)(37) of the 



  

Investment Company Act [15 U.S.C. 80a-2(a)(37)]) in which the Contract participates with respect to 
Variable Options offered under the Contract. 

“Registrant” means, as applicable, a Registered Separate Account or the Insurance Company.  

“SAI” means the Statement of Additional Information required by Part B of this Form. 

“Securities Act” means the Securities Act of 1933 [15 U.S.C. 77a et seq.]. 

“Securities Exchange Act” means the Securities Exchange Act of 1934 [15 U.S.C. 78a et seq.]. 

“Statutory Prospectus” means a prospectus that satisfies the requirements of section 10(a) of the 
Securities Act [15 U.S.C. 77j(a)]. 

“Summary Prospectus” has the meaning provided by paragraph (a)(11) of rule 498A under the 
Securities Act [17 CFR 230.498A(a)(11)]. 

“Variable Option” means an Investment Option under any Contract pursuant to which the value of 
the Contract, either during an accumulation period or after annuitization, or both, varies according to the 
investment experience of a Portfolio Company. 

B. Filing and Use of Form N-4 

1. What is Form N-4 used for? 

Form N-4 is used by all separate accounts organized as unit investment trusts and offering 
Contracts with Variable Options and all Insurance Companies that offer Contracts with Variable 
Options and/or Index-Linked Options to file:  

(a) An initial registration statement under the Investment Company Act and any amendments to 
the registration statement; 

(b) An initial registration statement required under the Securities Act and any amendments to 
the registration statement, including amendments required by section 10(a)(3) of the 
Securities Act [15 U.S.C. 77j(a)(3)]; or  

(c) Any combination of the filings in paragraph (a) or (b). 

2. What is included in the registration statement? 

(a) For registration statements or amendments filed under both the Investment Company Act and the 
Securities Act or only under the Securities Act, include the facing sheet of the Form, Parts A, B, and 
C, and the required signatures. 

(b) For registration statements or amendments filed only under the Investment Company Act, include 
the facing sheet of the Form, responses to all Items of Parts A (except Items 1, 4, 5, 9, and 16), B, 
and C (except Items 27(c), (k), (l), and (m)), and the required signatures. 

3. What are the fees for Form N-4? 

No registration fees are required for a filing on Form N-4 to register as an investment company 
under the Investment Company Act or to register securities under the Securities Act. If a filing on 
Form N-4 is made to register securities under the Securities Act and securities are sold to the 
public, registration fees must be paid on an ongoing basis after the end of the Registrant’s fiscal 
year. See section 24(f) [15 U.S.C. 80a-24(f)] and rules 24f-2 [17 CFR 270.24f-2], 456 [17 CFR 
230.456], and 457 [17 CFR 230.457]. 



  

 

4. What rules apply to the filing of a registration statement on Form N-4? 

(a) For registration statements and amendments filed under both the Investment Company Act 
and the Securities Act or under only the Securities Act, the general rules under the Securities 
Act, particularly the rules regarding the filing of registration statements in Regulation C [17 
CFR 230.400 – 230.498A], apply to the filing of registration statements on Form N-4. 
Specific requirements concerning investment companies and registered index-linked 
annuities appear in rules 480 - 488 and 495 - 498A of Regulation C. 

(b) For registration statements and amendments filed only under the Investment Company Act, 
the general rules under the Investment Company Act, particularly the provisions in rules 8b-
1 – 8b-31 [17 CFR 270.8b-1 to 8b-31], apply to the filing of registration statements on Form 
N-4. 

(c) The plain English requirements of rule 421(d) under the Securities Act [17 CFR 230.421(d)] 
apply to prospectus disclosure in Part A of Form N-4. 

(d) Regulation S-T [17 CFR 232.10 – 232.501] applies to all filings on the Commission’s 
Electronic Data Gathering, Analysis, and Retrieval system (“EDGAR”). 

C. Preparation of the Registration Statement 

1. Administration of the Form N-4 Requirements 

(a) The requirements of Form N-4 are intended to promote effective communication between 
the Registrant and prospective investors. A Registrant’s prospectus should clearly disclose 
the fundamental features and risks of the Contracts, using concise, straightforward, and 
easy to understand language. A Registrant should use document design techniques that 
promote effective communication. 

(b) The prospectus disclosure requirements in Form N-4 are intended to elicit information for an 
average or typical investor who may not be sophisticated in legal or financial matters. The 
prospectus should help investors to evaluate the risks of an investment and to decide 
whether to invest in a Contract by providing a balanced disclosure of positive and negative 
factors. Disclosure in the prospectus should be designed to assist an investor in comparing 
and contrasting a Contract with other Contracts. 

(c) Responses to the Items in Form N-4 should be as simple and direct as reasonably possible 
and should include only as much information as is necessary to enable an average or typical 
investor to understand the particular characteristics of the Contracts. The prospectus should 
avoid including lengthy legal and technical discussions and simply restating legal or 
regulatory requirements to which Contracts generally are subject. Brevity is especially 
important in describing the practices or aspects of the Registrant’s operations that do not 
differ materially from those of other separate accounts or insurance companies. Avoid 
excessive detail, technical or legal terminology, and complex language, including the use of 
formulas as the primary means of communicating certain terms or features of the Contract. 
Also avoid lengthy sentences and paragraphs that may make the prospectus difficult for 
investors to understand and detract from its usefulness. 

(d) The requirements for prospectuses included in registration statements on Form N-4 will be 
administered by the Commission in a way that will allow variances in disclosure or 
presentation if appropriate for the circumstances involved while remaining consistent with 
the objectives of Form N-4. 



  

2. Form N-4 is divided into three parts: 

(a) Part A. Part A includes the information required in a Registrant’s prospectus under section 10(a) of 
the Securities Act. The purpose of the prospectus is to provide essential information about the 
Registrant and the Contracts in a way that will help investors to make informed decisions about 
whether to purchase the securities described in the prospectus. In responding to the Items in Part 
A, avoid cross-references to the SAI unless otherwise prescribed by the Form. Cross-references 
within the prospectus are most useful when their use assists investors in understanding the 
information presented and does not add complexity to the prospectus. 

(b) Part B. Part B includes the information required in a Registrant’s SAI. The purpose of the SAI is to 
provide additional information about the Registrant and the Contracts that the Commission has 
concluded is not necessary or appropriate in the public interest or for the protection of investors to 
be in the prospectus, but that some investors may find useful. Part B affords the Registrant an 
opportunity to expand discussions of the matters described in the prospectus by including 
additional information that the Registrant believes may be of interest to some investors. The 
Registrant should not duplicate in the SAI information that is provided in the prospectus, unless 
necessary to make the SAI comprehensible as a document independent of the prospectus. 

(c) Part C. Part C includes other information required in a Registrant’s registration statement. 

3. Additional Matters 

(a) Organization of Information. Organize the information in the prospectus and SAI to make it 
easy for investors to understand. Notwithstanding rule 421(a) under the Securities Act [17 
CFR 230.421(a)] regarding the order of information required in a prospectus, disclose the 
information required by Item 2 (Overview of the Contract), Item 3 (Key Information), and 
Item 4 (Fee Table) in numerical order at the front of the prospectus. Do not precede Items 2, 
3, and 4 with any other Item except the Cover Page (Item 1), a glossary, if any (General 
Instruction C.3.(d)), or a table of contents meeting the requirements of rule 481(c) under the 
Securities Act [17 CFR 230.481(c)].  

(b) Other Information. A Registrant may include, except in response to Items 2 and 3, 
information in the prospectus or the SAI that is not otherwise required so long as the 
information is not incomplete, inaccurate, or misleading and does not, because of its nature, 
quantity, or manner of presentation, obscure or impede understanding of the information 
that is required to be included. For example, Registrants are free to include in the 
prospectus financial statements required to be in the SAI, and may include in the SAI 
financial statements that may be placed in Part C. However, information regarding non-
principal risks that is not otherwise required to be in the prospectus must be disclosed in the 
SAI and not the prospectus, in accordance with Items 5 and 20. 

(c) Presentation of Information. To aid investor comprehension, Registrants are encouraged to 
use, as appropriate, question-and-answer formats, tables, side-by-side comparisons, 
captions, bullet points, numeric examples, illustrations or similar presentation methods. For 
example, such presentation methods would be appropriate when presenting disclosure for 
similar Contract features, prospectuses describing multiple Contracts, or the operation of 
optional benefits or annuitization. 

(d) Use of Terms. 

(i) Definitions. Define the special terms used in the prospectus (e.g., accumulation unit, 
participant, Crediting Period, etc.) in any presentation that clearly conveys meaning to 
investors. If the Registrant elects to include a glossary or list of definitions, only special 



  

terms used throughout the prospectus must be defined or listed. If a special term is 
used in only one section of the prospectus, it may be defined there (and need not be 
included in any glossary or list of definitions that the Registrant includes). 

(ii) Alternate Terminology. A Registrant may use alternate terminology other than that used 
in the form so long as the terminology used by the Registrant clearly conveys the 
meaning of, or provides comparable information as, the terminology included in the 
form. 

(e)  Use of Form N-4 to Register Multiple Contracts 

(i) A single prospectus may describe multiple Contracts that are essentially identical. 
Whether the prospectus describes Contracts that are “essentially identical” will depend 
on the facts and circumstances. For example, a Contract that does not offer optional 
benefits would not be essentially identical to one that does for a charge. Similarly, group 
and individual Contracts would not be essentially identical. However, Contracts that vary 
only due to state regulatory requirements would be essentially identical.  

(A) Paragraph (a) of General Instruction C.3 requires Registrants to disclose the 
information required by Items 2, 3, and 4 in numerical order at the front of the 
prospectus and generally not to precede the Items with other information. As a 
general matter, Registrants providing disclosure in a single prospectus for more 
than one Contract, may depart from the requirement of paragraph (a) as necessary 
to present the required information clearly and effectively (although the order of 
information required by each Item must remain the same). For example, the 
prospectus may present all of the Item 2 information for the Contracts, followed by 
all of the Item 3 information for several Contracts (e.g., by providing several Key 
Information Tables sequentially or by providing a single Key Information Table 
containing separate disclosures for each Contract to the extent that such 
disclosures would vary by Contract), and followed by all of the Item 4 information 
for the Contracts. Alternatively, the prospectus may present Items 2, 3, and 4 for 
each of several Contracts sequentially. Other presentations also would be 
acceptable if they are consistent with the Form’s intent to disclose the information 
required by Items 2, 3, and 4 in a standard order at the beginning of the 
prospectus. Registrants that present Items 2, 3, and 4 for each of several Contracts 
sequentially or that utilize another presentation should consider whether investors 
might benefit from a brief explanation about how the information in the prospectus 
is presented, such as headings for each contract in the prospectus’ table of 
contents and/or a brief narrative at the beginning of the prospectus explaining the 
presentation. Registrants are encouraged to present information in a manner that 
limits repetition. 

(B) The Registrant should generally include appropriate titles, headings, or any other 
information to promote clarity and facilitate understanding regarding which 
disclosures apply to which Contract, if such disclosures would vary based on the 
Contract. 

(ii) Multiple prospectuses may be combined in a single registration statement on Form N-4 
when the prospectuses describe Contracts that are substantially similar. For example, a 
Registrant could determine it is appropriate to include multiple prospectuses in a 
registration statement in the following situations: (i) the prospectuses describe the same 
Contract that is sold through different distribution channels; (ii) the prospectuses 
describe Contracts that differ only with respect to Portfolio Companies offered; or (iii) the 



  

prospectuses describe both the original and a modified version of the same Contract 
(where the “modified” version differs in the features or options that the Registrant offers 
under that Contract). 

(f) Dates. Rule 423 under the Securities Act [17 CFR 230.423] applies to the dates of the 
prospectus and the SAI. The SAI should be made available at the same time that the 
prospectus becomes available for purposes of rules 430 and 460 under the Securities Act 
[17 CFR 230.430 and 230.460]. 

(g) Sales Literature. A Registrant may include sales literature in the prospectus so long as the 
amount of this information does not add substantial length to the prospectus and its 
placement does not obscure essential disclosure. 

(h) Interactive Data File  

(i) An Interactive Data File (see rule 232.11 of Regulation S-T [17 CFR 232.11]) is required 
to be submitted to the Commission in the manner provided by rule 405 of Regulation S-T 
[17 CFR 232.405] for any registration statement or post-effective amendment thereto on 
Form N-4 that includes or amends information provided in response to Items 2(b)(2), 
2(d), 3, 4, 5, 6(a) (instruction), 6(c)(1), 6(d), 6(e), 7(e), 10, 17, 26(c), or 31A with regard 
to Contracts that are being sold to new investors.  

(A) Except as required by paragraph (h)(i)(B), the Interactive Data File must be 
submitted as an amendment to the registration statement to which the Interactive 
Data File relates. The amendment must be submitted on or before the date the 
registration statement or post-effective amendment that contains the related 
information becomes effective. 

(B) In the case of a post-effective amendment to a registration statement filed 
pursuant to paragraphs (b)(1)(i), (ii), (v), (vi), or (vii) of rule 485 under the Securities 
Act [17 CFR 230.485(b)], the Interactive Data File must be submitted either with 
the filing, or as an amendment to the registration statement to which the 
Interactive Data Filing relates that is submitted on or before the date the post-
effective amendment that contains the related information becomes effective. 

(ii) An Interactive Data File is required to be submitted to the Commission in the manner 
provided by rule 405 of Regulation S-T for any form of prospectus filed pursuant to 
paragraphs (c) or (e) of rule 497 under the Securities Act [17 CFR 230.497(c) or (e)] that 
includes information provided in response to Items 2(b)(2), 2(d), 3, 4, 5, 6(a) 
(instruction), 6(c)(1), 6(d), 6(e), 7(e), 10, 17, 26(c), or 31A that varies from the 
registration statement with regard to Contracts that are being sold to new investors. The 
Interactive Data File must be submitted with the filing made pursuant to rule 497. 

(iii) The Interactive Data File must be submitted in accordance with the specifications in the 
EDGAR Filer Manual, and in such a manner that will permit the information for each 
Contract, and, for any information that does not relate to all of the Classes in a filing, 
each Class of the Contract to be separately identified. 

(i) Website Addresses. Any website address included in an electronic version of the Statutory 
Prospectus must include an active hyperlink or other means of facilitating access that leads 
directly to the relevant website address. This requirement does not apply to an electronic 
Statutory Prospectus filed on the EDGAR system. 

D. Incorporation by Reference 



  

1. General Requirements   

All incorporation by reference must comply with the requirements of this Form and the following 
rules on incorporation by reference: rule 411 under the Securities Act [17 CFR 230.411] (general 
rules on incorporation by reference in a prospectus); rule 303 of Regulation S-T [17 CFR 232.303] 
(specific requirements for electronically filed documents); and rule 0-4 under the Investment 
Company Act [17 CFR 270.0-4] (additional rule on incorporation by reference for investment 
companies). In general, a Registrant may incorporate by reference, in the answer to any item of 
Form N-4 not required to be in the prospectus, any information elsewhere in the registration 
statement or in other statements, applications, or reports filed with the Commission. 

2. Specific Rules for Incorporation by Reference in Form N-4: 

(a) A Registrant may not incorporate by reference into a prospectus information that Part A of 
this Form requires to be included in a prospectus, except as specifically permitted by Part A 
of the Form. 

(b) A Registrant may incorporate by reference any or all of the SAI into the prospectus (but not 
to provide any information required by Part A to be included in the prospectus) without 
delivering the SAI with the prospectus. 

(c) A Registrant may incorporate by reference into the SAI or its response to Part C information 
that Parts B and C require to be included in the Registrant’s registration statement. 

 



 

 
PART A - INFORMATION REQUIRED IN A PROSPECTUS 

Item 1. Front and Back Cover Pages 

(a) Front Cover Page. Include the following information on the outside front cover page of the 
prospectus: 

(1) The Registered Separate Account’s name. 
 

(2) The Insurance Company’s name.  
 
(3) The types of Contracts offered by the prospectus (e.g., group, individual, single premium 

immediate, flexible premium deferred). 
 

(4) The name of the Contract and the Class or Classes, if any, to which the Contract relates.   
 
(5) The types of Investment Options offered under the Contract, and a cross-reference to the 

prospectus appendix providing additional information about each option. 
 
(6) A statement that the Contract is a complex investment and involves risks, including potential 

loss of principal. For Contracts with Index-Linked Options, prominently state that the Insurance 
Company limits the amount an investor can earn on an Index-Linked Option, the potential for 
investment loss could be significantly greater than the potential for investment gain, and an 
investor could lose a significant amount of money if the Index declines in value. Prominently 
disclose as a percentage the maximum amount of loss from negative Index performance that an 
investor could experience after taking into account the minimum guaranteed limit on Index loss 
provided under the Contract. 

 
(7) A statement that the Contract is not a short-term investment and is not appropriate for an 

investor who needs ready access to cash. Briefly state that withdrawals could result in 
surrender charges, negative Contract Adjustments, taxes, and tax penalties, as applicable. 
Prominently state as a percentage the maximum potential loss resulting from a negative 
Contract Adjustment, if applicable. 

 
(8) A statement that the Insurance Company’s obligations under the Contract are subject to its 

financial strength and claims-paying ability. 
 
(9) The date of the prospectus. 
 
(10) The statement required by rule 481(b)(1) under the Securities Act [17 CFR 230.481(b)(1)].  
 
(11) The statement that additional information about certain investment products, including [type of 

Contract], has been prepared by the Securities and Exchange Commission’s staff and is 
available at Investor.gov. 

(12) If applicable, the legend: “If you are a new investor in the Contract, you may cancel your 
Contract within 10 days of receiving it without paying fees or penalties[, although we will apply 
the Contract Adjustment]. In some states, this cancellation period may be longer. Upon 
cancellation, you will receive either a full refund of the amount you paid with your application or 
your total Contract value. You should review this prospectus, or consult with your investment 
professional, for additional information about the specific cancellation terms that apply.” 



 

Instruction. A Registrant may include on the front cover page any additional information, subject to the 
requirements of General Instruction C.3.(b) and (c). 

(b) Back Cover Page. Include the following information on the outside back cover page of the prospectus: 

(1) A statement that the SAI includes additional information about the Registrant. Explain that the SAI 
is available, without charge, upon request, and explain how investors may make inquiries about 
their Contracts. Provide a toll-free (or collect) telephone number for investors to call to request the 
SAI, to request other information about the Contracts, and to make investor inquiries.  

Instructions. 

1. A Registrant may indicate, if applicable, that the SAI and other information are available on its 
website and/or by email request. 

2. A Registrant may indicate, if applicable, that the SAI and other information are available from 
an insurance agent or financial intermediary (such as a broker-dealer or bank) through which 
the Contracts may be purchased or sold. 

3. When a Registrant (or an insurance agent or financial intermediary through which Contracts 
may be purchased or sold) receives a request for the SAI, the Registrant (or insurance agent 
or financial intermediary) must send the SAI within 3 business days of receipt of the request, 
by first-class mail or other means designed to ensure equally prompt delivery. 

(2) A statement whether and from where information is incorporated by reference into the prospectus 
as permitted by General Instruction D. Unless the information is delivered with the prospectus, 
explain that the Registrant will provide the information without charge, upon request (referring to 
the telephone number provided in response to paragraph (b)(1)).  

Instruction. The Registrant may combine the information about incorporation by reference with the 
statements required under paragraph (b)(1). 

(3) A statement that reports and other information about the Registered Separate Account are 
available on the Commission’s website at http://www.sec.gov, and that copies of this information 
may be obtained, upon payment of a duplicating fee, by electronic request at the following email 
address: [email protected]. 

 
(4) The EDGAR contract identifier for the Contract on the bottom of the back cover page in type size 

smaller than that generally used in the prospectus (e.g., 8-point modern type). 
 

Item 2. Overview of the Contract 

Provide a concise description of the Contract including the following information: 

(a) Purpose. Briefly describe the purpose(s) of the Contract (e.g., to help the investor accumulate assets 
through an investment portfolio, to provide or supplement the investor’s retirement income, to 
provide death and/or other benefits). State for whom the Contract may be appropriate (e.g., by 
discussing a representative investor’s time horizon, liquidity needs, and financial goals).  

(b) Phases of Contract. Briefly describe the accumulation (savings) phase and annuity (income) phase of 
the Contract. 

(1) This discussion should include a brief overview of the Investment Options available under the 
Contract. 

http://www.sec.gov/
mailto:[email protected]


 

Instructions. 

1. Prominently disclose that additional information about each Investment Option is provided in 
an appendix to the prospectus and provide a cross-reference to the appendix. 

2. A detailed explanation of the Registered Separate Account, Portfolio Companies, Indexes, and 
Investment Options is not necessary and should be avoided. 

(2) With respect to any Index-Linked Option currently offered under the Contract, include the 
following information. 

(i) State that the Insurance Company will credit positive or negative interest at the end of a 
Crediting Period to amounts allocated to an Index-Linked Option based, in part, on the 
performance of the Index.  

(ii) Disclose that an investor could lose a significant amount of money if the Index declines in 
value.  

Instruction. Prominently state as a percentage the maximum amount of loss an investor 
could experience from negative Index performance, after taking into account the minimum 
guaranteed limit on Index loss provided under the Contract. 

(iii) Briefly explain that the Insurance Company limits the negative Index return used in 
calculating interest credited to an Index-Linked Option at the end of its Crediting Period. 
Briefly describe the manner(s) in which the Insurance Company limits negative returns 
through the use of a floor, buffer, or some other rate or measure. Provide an example of 
how such rate could operate to limit a negative Index return (e.g., “if the Index return is -
25% and the buffer rate is -10%, we will credit -15% (the amount that exceeds the buffer 
rate) at the end of the Crediting Period, meaning your Contract value will decrease by 
15%”). Disclose the minimum limit on Index losses guaranteed for the life of the Contract 
for any Index-Linked Option. 

(iv) Briefly explain that the Insurance Company limits the positive Index return used in 
calculating interest credited to an Index-Linked Option at the end of its Crediting Period. 
Briefly describe the manner(s) in which the Insurance Company limits positive returns 
through the use of a cap, participation rate, or some other rate or measure. Provide an 
example of how such rate could operate to limit a positive Index return (e.g., “if the Index 
return is 12% and the cap rate is 4%, we will credit 4% in interest at the end of the 
Crediting Period, meaning your Contract value will increase by 4%”). Disclose the minimum 
limit on Index gains guaranteed for the life of the Contract for any Index-Linked Option. 

(3) State, if applicable, that if an investor annuitizes, the investor will receive a stream of income 
payments, however (i) the investor will be unable to make withdrawals, and (ii) death benefits and 
living benefits will terminate. 

(c) Contract Features. Summarize the Contract’s primary features, including death benefits, withdrawal 
options, loan provisions, and Contract benefits. If applicable, state that the investor will incur an 
additional fee for selecting a particular benefit. 

(d) Contract Adjustment. If applicable, state that an investor could lose a significant amount of money 
due to the Contract Adjustment if amounts are removed from an Index-Linked Option or from the 
Contract prior to the end of a specified period. Briefly describe the transactions subject to the 
Contract Adjustment. 



 

Instruction. Prominently state as a percentage the maximum amount of loss an investor could 
experience from a negative Contract Adjustment. State that this loss could be greater due to 
surrender charges and tax consequences. 

Item 3. Key Information 

Include the following information: 

Important Information You Should Consider About the [Contract] 

FEES AND EXPENSES 

Are There Charges for Early 
Withdrawals? 

 

Are There Transaction 
Charges? 

 

Are There Ongoing Fees and 
Expenses? 

 

RISKS 

Is There a Risk of Loss From 
Poor Performance? 

 

Is this a Short-Term 
Investment? 

 

What are the Risks 
Associated with the 
Investment Options? 

  

Is There Any Chance the 
Insurance Company Won’t 
Pay Amounts Due to Me 
Under the Contract? 

 

RESTRICTIONS 

Are There Restrictions on the 
Investment Options? 

 

Are there any Restrictions on 
Contract Benefits? 

 

TAXES 

What are the Contract’s Tax 
Implications? 

 



 

CONFLICTS OF INTEREST 

How are Investment 
Professionals Compensated? 

 

Should I Exchange My 
Contract? 

 

  
Instructions. 

1. General. 

(a) Disclose the required information in the tabular presentation(s) reflected herein, in the order 
specified. A Registrant may exclude any disclosures that are not applicable, or modify any of 
the statements required to be included, so long as the modified statement contains 
comparable information. Notwithstanding this instruction and General Instruction C.3.(d)(ii), 
the title, headings, and sub-headings for this tabular presentation may not be modified or 
substituted with alternate terminology unless otherwise provided. 

(b) Provide cross-references to the location in the Statutory Prospectus where the subject matter 
is described in greater detail. Cross-references in electronic versions of the Summary 
Prospectus and/or Statutory Prospectus should link directly to the location in the Statutory 
Prospectus where the subject matter is discussed in greater detail, or should provide a means 
of facilitating access to that information through equivalent methods or technologies. The 
cross-reference should be adjacent to the relevant disclosure, either within the table row, or 
presented in an additional table column. 

(c) All disclosures provided in response to this Item should be short and succinct, consistent with 
the limitations of a tabular presentation. 

(d) All disclosures provided in this tabular presentation also must be presented in a question and 
answer format. Unless the context otherwise requires, when answering a question presented 
on a given row of the table, begin the response with “Yes” or “No” in bold text. 

2. Fees and Expenses. 

(a) Are There Charges for Early Withdrawals? Include a statement that if the investor withdraws 
money from the Contract within [x] years following the investor’s last purchase payment, the 
investor will be assessed a surrender charge. Include in this statement the maximum 
surrender charge (as a percentage of [purchase payment or amount surrendered]), and the 
maximum number of years that a surrender charge may be assessed since the last purchase 
payment under the Contract. Provide an example of the maximum surrender charge an 
investor could pay (in dollars) under the Contract assuming a $100,000 investment (e.g., “[i]f 
you make an early withdrawal, you could pay a surrender charge of up to $9,000 on a 
$100,000 investment. This loss will be greater if there is a negative Contract Adjustment, 
taxes, or tax penalties.”). 

If applicable, include a statement that if all or a portion of account value is removed from an 
Index-Linked Option or from the Contract before the expiration of a specified period, the 
Insurance Company will apply a Contract Adjustment, which may be negative. Include in this 
statement the maximum potential loss (as a percentage of the investment) resulting from a 
negative adjustment (e.g., “[y]ou could lose up to XX% of your investment due to the contract 



 

adjustment”). Provide an example of the maximum negative adjustment that could be applied 
(in dollars) assuming a $100,000 investment (e.g., “[i]f you allocate $100,000 to an 
investment option with a 3-year Crediting Period and later withdraw the entire amount before 
the 3 years have ended, you could lose up to $90,000 of your investment. This loss will be 
greater if you also have to pay a surrender charge, taxes, and tax penalties.”). Provide a brief 
narrative description of the Contract transactions subject to the Contract Adjustment (e.g., 
withdrawals, surrender, annuitization, etc.). 

(b) Are There Transaction Charges? State that in addition to surrender charges and Contract 
Adjustments (if applicable), the investor may also be charged for other transactions, and 
provide a brief narrative description of the types of such charges (e.g., front-end loads, 
charges for transferring cash value between Investment Options, charges for wire transfers, 
etc.). 

(c) Are There Ongoing Fees and Expenses? 

Include the following information, in the order specified: 
(i) Minimum and Maximum Annual Fee Table. 

 
(A) The legend: “The table below describes the fees and expenses that you may pay each 

year, depending on the Investment Options and optional benefits you choose. Please 
refer to your Contract specifications page for information about the specific fees you 
will pay each year based on the options you have elected.” 

(B) Provide Minimum and Maximum Annual Fees in substantially the following tabular 
format, in the order specified. 

 

  
(C) Explain, in a parenthetical or footnote to the table or each caption, the basis for each 

percentage (e.g., % of separate account value or benefit base, or % of net asset value).  
 

(D) Calculate Base Contract fees by dividing the total amount of Base Contract fees 
(including dollar-based Contract expenses) collected during the year that are 
attributable to the Contract by the total average net assets that are attributable to the 
Contract. 

 
(E) If the Insurance Company offers multiple Portfolio Companies under the Contract, it 

should disclose the minimum and maximum “Annual Portfolio Company Expenses” 
calculated in accordance with Item 3 of Form N-1A [17 CFR §§ 239.15A and 274.11A] 
(before expense reimbursements or fee waiver arrangements). If the Insurance 
Company charges a Platform Charge to make any of the Portfolio Companies available 
as investment options under the Contract, the Insurance Company should include the 
maximum Platform Charge associated with each Portfolio Company when calculating 
minimum and maximum Annual Portfolio Company Expenses. 

Annual Fee Minimum Maximum  
Base Contract 
(varies by Contract Class) 

[ ]% [ ]% 

Portfolio Company fees and expenses [ ]% [ ]% 
Optional benefits available for an 
additional charge 
(for a single optional benefit, if 
elected)  

[ ]% [ ]% 

https://www.law.cornell.edu/cfr/text/17/239.15A(F) The Minimum Annual Fee means the lowest current fee for each annual fee category 

(i.e., the least expensive Contract Class, the lowest Portfolio Company Total Annual 
Operating Expenses, and the least expensive optional benefit available for an 
additional charge). The Maximum Annual Fee means the highest current fee for each 
annual fee category (i.e., the most expensive Contract Class, the highest Portfolio 
Company Total Annual Operating Expenses, and the most expensive optional benefit 
available for an additional charge).  
 

(G) For Contracts that offer Index-Linked Options and impose ongoing fees and expenses 
on the Index-Linked Options, Variable Options, and/or Fixed Options, precede the table 
with a prominent statement explaining that: (1) there is an implicit ongoing fee on 
Index-Linked Options by the Insurance Company limiting, through the use of a cap, 
participation rate, or some other rate or measure, the amount an investor can earn on 
an Index-Linked Option; (2) imposing this limit helps the Insurance Company make a 
profit on the Index-Linked Option; and (3) in return for accepting this limit on Index 
gains, an investor will receive some protection from Index losses. 
 

(ii) Lowest and Highest Annual Cost Table. 

(A) The legend: “Because your Contract is customizable, the choices you make affect how 
much you will pay. To help you understand the cost of owning your Contract, the 
following table shows the lowest and highest cost you could pay each year, based on 
current charges. This estimate assumes that you do not take withdrawals from the 
Contract, which could add surrender charges and negative Contract Adjustments that 
substantially increase costs.” 

(B) Provide Lowest and Highest Annual Costs in substantially the following tabular format, 
in the order specified. 

 
Lowest Annual Cost: 

$[ ] 
Highest Annual Cost: 

$[ ] 
Assumes: 
 

• Investment of $100,000 
• 5% annual appreciation  
• Least expensive combination 

of Contract Classes and 
Portfolio Company fees and 
expenses 

• No optional benefits 
• No sales charges    
• No additional purchase 

payments, transfers or 
withdrawals 

 

Assumes: 
 

• Investment of $100,000 
• 5% annual appreciation 
• Most expensive combination 

of Contract Classes, optional 
benefits, and Portfolio 
Company fees and expenses 

• No sales charges   
• No additional purchase 

payments, transfers or 
withdrawals 

  
(C) Calculate the Lowest and Highest Annual Cost estimates in the following manner: 

 
a. Calculate the dollar amount of fees that would be assessed based on the 

assumptions described in the table above for each of the first 10 Contract years.   
 



 

b. Total each year’s fees (discounted to the present value using a 5% annual discount 
rate) and divide by 10 to calculate the estimated dollar amounts that are required 
to be set forth in the table above. 
 

c. Sales loads, other than ongoing sales charges, should be excluded from the Lowest 
and Highest Annual Cost estimates. 
 

d. Amounts of any bonus payment should be excluded from the Lowest and Highest 
Annual Cost estimates. 

 
e. Unless otherwise provided, the least and most expensive combination of Contract 

Classes, Portfolio Company fees and expenses, and optional benefits should be 
based on the disclosures provided in the Example in Item 4. If a different 
combination of Contract Classes, Annual Portfolio Company Expenses, and/or 
optional benefits would result in different Minimum or Maximum fees in different 
years, use the least expensive and most expensive combination of Contract 
Classes, Annual Portfolio Company Expenses, and optional benefits each year. 

 
(iii) For Contracts that offer Index-Linked Options and that do not impose any ongoing fees and 

expenses under the Contract, prominently state, in lieu of the disclosure required by 
Instructions 2(c)(i) and (ii), that (1) there is an implicit ongoing fee on Index-Linked Options 
by the Insurance Company limiting, through the use of a cap, participation rate, or some 
other rate or measure, the amount an investor can earn on an Index-Linked Option; (2) 
imposing this limit helps the Insurance Company make a profit on the Index-Linked 
Options; and (3) in return for accepting this limit on Index gains, an investor will receive 
some protection from Index losses. 

 
3. Risks. 

 
(a) Is There a Risk of Loss From Poor Performance? State that an investor can lose money by 

investing in the Contract. For a Contract with Index-Linked Options, prominently state as a 
percentage the maximum amount of loss an investor could experience from negative Index 
performance, after taking into account the minimum guaranteed limit on Index loss provided 
under the Contract. 
 

(b) Is This a Short-Term Investment? State that a Contract is not a short-term investment and is 
not appropriate for an investor who needs ready access to cash, accompanied by a brief 
explanation. State that amounts withdrawn from the Contract may result in surrender charges, 
taxes, and tax penalties. If applicable, state that amounts removed from an Index-Linked 
Option or from the Contract before the end of a specified period may also result in a negative 
Contract Adjustment and loss of positive Index performance. 

 
For Index-Linked Options, state that Contract value will be reallocated at the end of the 
Crediting Period according to the investor’s instructions, and disclose the default reallocation 
in the absence of such instructions. 
 

(c) What are the Risks Associated with the Investment Options? State that an investment in the 
Contract is subject to the risk of poor investment performance and can vary depending on the 
performance of the Investment Options available under the Contract (e.g., Portfolio 
Companies, if a Variable Option, or the Index, if an Index-Linked Option), that each Investment 
Option (including any Fixed Option) will have its own unique risks, and that the investor should 
review the available Investment Options before making an investment decision. For Index-



 

Linked Options, also state that: 
 

(A) The cap, participation rate, or some other rate or measure, as applicable, will limit positive 
Index returns (e.g., limited upside). Provide an example for each type of limit imposed 
under the Contract (e.g., “if the Index return is 12% and the cap rate is 4%, we will credit 
4% in interest at the end of the Crediting Period”), and prominently state that this may 
result in the investor earning less than the Index return; and 

 
(B) The floor, buffer, or some other rate or measure, as applicable, will limit negative Index 

returns (e.g., limited protection in the case of market decline). Provide an example for 
each type of limit imposed under the Contract (e.g., “if the Index return is -25% and the 
buffer rate is -10%, we will credit -15% (the amount that exceeds the buffer rate) at the 
end of the Crediting Period”), and prominently state that even after limiting a negative 
Index return, the investor could still lose up to XX% of their investment. 

 
(d) Is There Any Chance the Insurance Company Won’t Pay Amounts Due to Me Under the 

Contract? State that an investment in the Contract is subject to the risks related to the 
Insurance Company, including that any obligations (including under any Fixed Options and 
Index-Linked Options), guarantees, or benefits are subject to the claims-paying ability of the 
Insurance Company. Further state that more information about the Insurance Company, 
including if applicable its financial strength ratings, is available upon request, and indicate 
how such requests can be made (e.g., via toll-free telephone number). 
 

Instruction. A Registrant may include the Insurance Company’s financial strength rating(s) and 
omit the portion of the disclosures regarding the availability of the Insurance Company’s financial 
strength ratings specified by the last sentence of Instruction 3.(d). 

4. Restrictions. 
 

(a) Are There Limits on the Investment Options? State whether there are any restrictions that may 
limit the Investment Options that an investor may choose, as well as any limitations on the 
transfer of Contract value among Investment Options. State any reservation of rights by the 
Insurance Company or the Registered Separate Account under the Contract, including if 
applicable, the right to remove or substitute Portfolio Companies, add or remove Index-Linked 
Options and change the features of an Index-Linked Option from one Crediting Period to the 
next, including the Index and the current limits on Index gains and losses (subject to 
contractual minimum guarantees), substitute the Index of an Index-Linked Option during its 
Crediting Period, and stop accepting additional purchase payments. 
 

(b) Are There Any Restrictions on Contract Benefits? State whether there are any restrictions or 
limitations relating to benefits offered under the Contract (e.g., death benefits, living benefits, 
Contract loans, performance “locks” relating to the Contract Adjustment, etc.), and/or whether 
a benefit may be modified or terminated by the Insurance Company. If applicable, state that 
withdrawals that exceed limits specified by the terms of a Contract benefit may affect the 
availability of the benefit by reducing the benefit by an amount greater than the value 
withdrawn, and/or could terminate the benefit. 

 
5. Taxes—What are the Contract’s Tax Implications? State that an investor should consult with a tax 

professional to determine the tax implications of an investment in and purchase payments 
received under the Contract, and that there is no additional tax benefit to the investor if the 
Contract is purchased through a tax-qualified plan or individual retirement account (IRA). Explain 
that withdrawals will be subject to ordinary income tax and may be subject to tax penalties. 
 



 

6. Conflicts of Interest. 
 
(a) How Are Investment Professionals Compensated? State that some investment professionals 

may receive compensation for selling the Contract to investors, and briefly describe the basis 
upon which such compensation is typically paid (e.g., commissions, revenue sharing, 
compensation from affiliates and third parties). State that these investment professionals may 
have a financial incentive to offer or recommend the Contract over another investment. 
 

(b) Should I Exchange my Contract? State that some investment professionals may have a 
financial incentive to offer an investor a new contract in place of the one the investor already 
owns, and that an investor should only exchange their contract if the investor determines, 
after comparing the features, fees, and risks of both contracts, and any fees or penalties to 
terminate the existing contract, that it is preferable for the investor to purchase the new 
contract rather than continue to own the existing contract. 

Instruction. A Registrant may omit these line-items if neither the Registrant nor any of its related 
companies pay financial intermediaries for the sale of the Contract or related services. 

Item 4. Fee Table 

Include the following information: 

The following tables describe the fees and expenses that you will pay when buying, owning, and 
surrendering or making withdrawals from an Investment Option or from the Contract. Please refer to your 
Contract specifications page for information about the specific fees you will pay each year based on the 
options you have elected. 

The first table describes the fees and expenses that you will pay at the time that you buy the Contract, 
surrender or make withdrawals from an Investment Option or from the Contract, or transfer Contract 
value between Investment Options. State premium taxes may also be deducted. 

Transaction Expenses 

 Sales Load Imposed on Purchases (as a percentage of purchase payments) __% 

 Deferred Sales Load (or Surrender Charge) (as a percentage of purchase 
payments or amount surrendered, as applicable) 

__% 

 Transfer Fee __% 

 Contract Adjustment Maximum Potential Loss (as a percentage of Contract 
value at the start of the Crediting Period or amount withdrawn, as applicable ) 

__% 

The next table describes the fees and expenses that you will pay each year during the time that you own 
the Contract (not including Portfolio Company fees and expenses). 

If you choose to purchase an optional benefit, you will pay additional charges, as shown below. 

Annual Contract Expenses 

 Administrative Expenses $__ 



 

Annual Contract Expenses 

 Base Contract Expenses (as a percentage of average account value or 
Contract value)  

__% 

 Optional Benefit Expenses (as a percentage of benefit base or other (e.g., 
average account value))   

__% 

 In addition to the fees described above, we limit the amount you can earn on an 
Index-Linked Option. Imposing this limit helps us make a profit on the Index-
Linked Option. In return for accepting this limit on Index gains, you will receive 
some protection from Index losses. 

 

The next item shows the minimum and maximum total operating expenses charged by the Portfolio 
Companies that you may pay periodically during the time that you own the Contract. Expenses shown 
may change over time and may be higher or lower in the future. These amounts also include applicable 
Platform Charges if you choose to invest in certain Portfolio Companies. A complete list of Portfolio 
Companies available under the Contract, including their annual expenses, may be found at the back of 
this document. 

Annual Portfolio Company Expenses Minimum Maximum 

 (expenses that are deducted from Portfolio Company assets, 
including management fees, distribution and/or service 
(12b-1) fees, and other expenses) 

__% __% 

 
Example 

This Example is intended to help you compare the cost of investing in the Variable Options with the cost 
of investing in other annuity contracts that offer variable options. These costs include transaction 
expenses, annual Contract expenses, and Annual Portfolio Company Expenses.  

The Example assumes all Contract value is allocated to the Variable Options. The Example does not 
reflect the Contract Adjustment. Your costs could differ from those shown below if you invest in Index-
Linked Options or Fixed Options. 

The Example assumes that you invest $100,000 in the Variable Options for the time periods indicated. 
The Example also assumes that your investment has a 5% return each year and assumes the most 
expensive combination of Annual Portfolio Company Expenses and optional benefits available for an 
additional charge. Although your actual costs may be higher or lower, based on these assumptions, your 
costs would be: 

If you surrender your 
Contract at the end of 
the applicable time 
period: 

 1 year 

 

$___ 

3 years 

 

$___ 

5 years 

 

$___ 

10 years 

 

$___ 

If you annuitize at the 
end of the applicable 

 1 year 3 years 5 years 10 years 



 

If you surrender your 
Contract at the end of 
the applicable time 
period: 

 1 year 

 

$___ 

3 years 

 

$___ 

5 years 

 

$___ 

10 years 

 

$___ 

time period:  

$___ 

 

$___ 

 

$___ 

 

$___ 

If you do not 
surrender your 
Contract: 

 1 year 

 

$___ 

3 years 

 

$___ 

5 years 

 

$___ 

10 years 

 

$___ 

Instructions 

1. Include the narrative explanations in the order indicated. A Registrant may modify a narrative 
explanation if the explanation contains comparable information to that shown, and may omit a 
narrative explanation that is not applicable under the Contract. 

2. Assume that the Contract is owned during the accumulation period for purposes of the table 
(including the Example). If an annuitant would pay different fees or be subject to different 
expenses, disclose this in a brief narrative and provide a cross-reference to those portions of the 
prospectus describing these fees. 

3. A Registrant may omit captions if the Registrant does not charge or reserve the right to charge the 
fees or expenses covered by the captions. 

4. Round all dollar figures to the nearest dollar and all percentages to the nearest hundredth of one 
percent. 

5. In the Transaction Expenses and Annual Contract Expenses tables, the Registrant must disclose 
the maximum guaranteed charge, unless a specific instruction directs otherwise. If a fee other 
than a Contract Adjustment is calculated based on a benchmark (e.g., a fee that varies according 
to volatility levels or Treasury yields), the Registrant must also disclose the maximum guaranteed 
charge as a single number. The Registrant may disclose the current charge, in addition to the 
maximum charge, if the disclosure of the current charge is no more prominent than, and does not 
obscure or impede understanding of, the disclosure of the maximum charge. In addition, the 
Registrant may include in a footnote to the table a tabular, narrative, or other presentation 
providing further detail regarding variations in the charge. For example, if deferred sales charges 
decline over time, the Registrant may include in a footnote a presentation regarding the 
scheduled reductions in the deferred sales charges. 

6. Provide a separate fee table (or separate column within the table) for each Contract offered by 
the prospectus that has different fees.  

7. For a Contract with more than one Class, provide a separate response for each Class.  

Transaction Expenses 

8. “Sales Load Imposed on Purchases” includes the maximum sales load imposed upon purchase 



 

payments and may include a tabular presentation, within the larger table, of the range of such 
sales loads. 

9. “Deferred Sales Load” includes the maximum contingent deferred sales load (or surrender 
charge), expressed as a percentage of the original purchase price or amount surrendered, and 
may include a tabular presentation, within the larger table, of the range of contingent deferred 
sales loads over time. 

10. “Transfer Fee” includes the maximum fee charged for any exchange or transfer of Contract value 
between Investment Options or from the Registered Separate Account to another investment 
company or from the Registered Separate Account to the insurance company’s general account. 
The Registrant may include a tabular presentation of the range of transfer fees unless such a 
presentation would be so lengthy as to encumber the larger table, in which case the Registrant 
should only provide a cross-reference to the narrative portion of the prospectus discussing the 
transfer fee. 

11. “Contract Adjustment Maximum Potential Loss” includes the maximum negative Contract 
Adjustment that may be imposed, expressed as a percentage of Contract value at the start of the 
Crediting Period or of the amount withdrawn, as applicable. The Registrant should list in a 
footnote the Contract transactions subject to a Contract Adjustment. 

12. If the Registrant (or any other party pursuant to an agreement with the Registrant) charges any 
other transaction fee, add another caption describing it and list the (maximum) amount or basis 
on which the fee is deducted. 

Annual Contract Expenses 

13. Administrative Expenses include any Contract, account, or similar fee imposed on a dollar basis 
and charged on any recurring basis (e.g., $50 per year). 

14. Base Contract Expenses include mortality and expense risk fees and account fees and expenses. 
Account fees and expenses include all fees and expenses charged to any Investment Option 
(except sales loads, mortality and expense risk fees, and optional benefits expenses) that are 
deducted on a percentage basis. 

15. Optional Benefits Expenses include any optional features (e.g., enhanced death benefits and 
living benefits) offered under the Contract for an additional charge. 

16. If the Registrant (or any other party pursuant to an agreement with the Registrant) imposes any 
other recurring charge (other than Annual Portfolio Company Expenses), add another caption 
describing it and list the (maximum) amount or basis on which the charge is deducted. 

Annual Portfolio Company Expenses 

17. If a Registrant offers multiple Portfolio Companies, it should disclose the minimum and maximum 
“Annual Portfolio Company Expenses” for any Portfolio Company calculated in accordance with 
Item 3 of Form N-1A [17 CFR §§ 239.15A and 274.11A (before expense reimbursements or fee 
waiver arrangements). If the Insurance Company charges a Platform Charge to make any of the 
Portfolio Companies available as investment options under the Contract, the Registrant should 
include the maximum Platform Charge associated with each Portfolio Company when calculating 
minimum and maximum Annual Portfolio Company Expenses. 

18. A Registrant may also reflect, in an additional line-item to the range of Annual Portfolio Company 
Expenses, minimum and maximum Annual Portfolio Company Expenses calculated in accordance 

https://www.law.cornell.edu/cfr/text/17/239.15A


 

with Item 3 of Form N-1A that include expense reimbursements or fee waiver arrangements that 
are in place and reflected in the Portfolio Company’s registration statement pursuant to Item 3 of 
Form N-1A. If the Registrant provides this disclosure, also disclose the period for which the 
expense reimbursements or fee waiver arrangement is expected to continue, and, if applicable, 
that it can be terminated at any time at the option of a Portfolio Company. If the Registrant 
charges a Platform Charge to make any of the Portfolio Companies available as investment 
options under the Contract, the Registrant should include the current Platform Charge associated 
with each Portfolio Company when calculating minimum and maximum Annual Portfolio Company 
Expenses that include expense reimbursements or fee waiver arrangements. 

Example 

19. For purposes of the Example(s) in the table, provide the following for each Variable Option 
Contract Class: 

(a) Assume that the percentage amounts listed under “Annual Contract Expenses” remain the 
same in each year of the 1-, 3-, 5-, and 10-year periods;  

(b) The most expensive combination of Contract features must be shown first. Additional expense 
presentations are permitted, but not required; 

(c) Assume the maximum sales load that may be deducted from purchase payments is deducted; 

(d) For any breakpoint in any fee, assume that the amount of Variable Option (and Portfolio 
Company) assets remains constant as of the level at the end of the most recently completed 
fiscal year; 

(e) Assume no exchanges or other transactions; 

(f) Reflect any Contract expenses by dividing the total amount of Contract expenses (including 
dollar-based Contract expenses) collected during the year that are attributable to the Contract 
by the total average net assets that are attributable to the Contract. Add the resulting 
percentage to Base Contract expenses and assume that it remains the same in each year of 
the 1-, 3-, 5-, and 10-year periods; 

(g) Reflect any deferred sales load (or surrender charge) by assuming a complete surrender on 
the last day of the year; 

(h) Provide the information required in the second section of the Example only if Variable Option 
fees upon annuitization are different from those charged upon surrender; and 

(i) Provide the information required in the third section of the Example only if a sales load or 
other fee is charged upon a complete surrender. 

Item 5. Principal Risks of Investing in the Contract 

Summarize the principal risks of purchasing a Contract, including as applicable: 

(a) Investment Option Risk. Explain the principal risks of investing in an Investment Option, including 
the risks of poor investment performance and, for Index-Linked Options, the maximum potential 
loss from negative Index performance over the Crediting Period, as a percentage. 

(b) Early Withdrawal Risk. State that Contracts are unsuitable as short-term savings vehicles. Explain 
the limitations on access to cash value through withdrawals, including, as applicable, surrender 
charges, negative Contract Adjustments, loss of interest, and the possibility of adverse tax 



 

consequences. State the maximum potential loss resulting from a negative Contract Adjustment, 
as a percentage. 

(c) Index-Linked Option Risk. In addition to the potential loss from negative Index performance, 
describe the principal risks of investing in any Index-Linked Option offered under the Contract. 
State that an investor is not invested in the Index or in the securities tracked by the Index. 

Instructions. Include in this discussion:  

(1) The principal risks relating to, as applicable, limiting positive Index returns, the possibility of 
losses despite limits on negative Index returns, interest crediting methodologies, the impact 
of Contract fees on the amount of interest credited, and the reallocation of Contract value at 
the end of an Index-Linked Option’s Crediting Period,  

(2) The principal risks associated with the Index, including, as applicable, risks relating to type 
(e.g., market risk, small-cap risk, foreign securities risk, emerging market risk, etc.), the 
exclusion of dividends from Index return, and market volatility. Specify which risks relate to 
each Index offered under the Contract. Describe the principal risks related to the possible 
substitution of the Index before the end of an Index-Linked Option’s Crediting Period. 

(d) Contract Benefits Risk. Describe the principal risks associated with any benefits under the 
Contract, including the impact of excess withdrawals, if applicable. 

(e) Insurance Company Risk. Explain the principal risks associated with the Insurance Company’s 
ability to meet its guarantees under the Contract, including risks relating to its financial strength 
and claims-paying ability. 

(f) Contract Changes Risk. Describe the principal risks relating to any material reservation of rights 
under the Contract, including if applicable, the right to remove or substitute Portfolio Companies, 
add or remove Index-Linked Options and change the features of an Index-Linked Option from one 
Crediting Period to the next, stop accepting additional purchase payments, and impose 
investment restrictions or limitations on transfers. 

Item 6. Description of Insurance Company, Registered Separate Account, and Investment Options  

Concisely discuss the organization and operation or proposed operation of the Insurance Company, 
Registered Separate Account, Variable Options, Index-Linked Options, and Fixed Options. Include the 
information specified below, as applicable. 

(a) Insurance Company. Provide the name and address of the Insurance Company. State that the 
Insurance Company is obligated to pay all amounts promised to investors under the Contracts, subject to 
its financial strength and claims-paying ability. 

Instruction. If applicable, indicate that the Insurance Company is relying on the exemption provided by 
rule 12h-7 under the Securities Exchange Act (17 CFR 240.12h-7). 

(b) Registered Separate Account. Briefly describe the Registered Separate Account. Include a statement 
indicating that: 

(1) income, gains, and losses credited to, or charged against, the separate account reflect the 
separate account’s own investment experience and not the investment experience of the 
Insurance Company’s other assets; and 

(2) the assets of the separate account may not be used to pay any liabilities of the Insurance 
Company other than those arising from the Contracts. 



 

(c) Variable Options. Briefly describe the Variable Options currently offered under the Contract, including 
statements indicating that: 

(1) Contract value allocated to a Variable Option will vary based on the investment experience of the 
corresponding Portfolio Company in which the Variable Option invests. There is a risk of loss of 
the entire amount invested. 

(2) Information regarding each Portfolio Company, including (i) its name, (ii) its type (e.g., money 
market fund, bond fund, balanced fund, etc.) or a brief statement concerning its investment 
objectives, (iii) its investment adviser and any sub-investment adviser, (iv) current expenses, and 
(v) performance is available in an appendix to the prospectus, and provide cross-references. State 
that each Portfolio Company has issued a prospectus that contains more detailed information 
about the Portfolio Company, and provide instructions regarding how investors may obtain paper 
or electronic copies. 

(3) Concisely discuss the rights of investors to instruct the Insurance Company on the voting of 
shares of the Portfolio Companies, including the manner in which votes will be allocated.  

(d) Index-Linked Options.  

(1) Describe the Index-Linked Options currently offered under the Contract, including statements 
indicating that: 

(i) The Insurance Company will credit positive or negative interest at the end of a Crediting 
Period to amounts allocated to an Index-Linked Option based, in part, on the performance of 
the Index. An investment in an Index-Linked Option is not an investment in the Index or in 
any Index fund.  

(ii) The potential for investment loss could be significantly greater than the potential for 
investment gain. An investor could lose a significant amount of money if the Index declines 
in value.  

Instruction. Prominently state as a percentage the maximum amount of loss an investor 
could experience from negative Index performance, after taking into account the minimum 
guaranteed limit on Index loss provided under the Contract. 

(iii) An investor could lose a significant amount of money due to the Contract Adjustment if 
amounts are removed from an Index-Linked Option prior to the end of its Crediting Period. 

Instruction. Prominently state as a percentage the maximum amount of loss an investor 
could experience from a negative Contract Adjustment. State that this loss could be greater 
due to surrender charges and tax consequences.  

(iv) The Insurance Company can add or remove Index-Linked Options and change the features 
of an Index-Linked Option from one Crediting Period to the next, including the Index and the 
current limits on Index gains and losses, subject to contractual minimum guarantees. 

(v) Information regarding the features of each currently offered Index-Linked Option, including 
(i) its name, (ii) its type (e.g., market Index, exchange-traded fund, etc.), or a brief statement 
describing the assets that the Index seeks to track (e.g., U.S. large-cap equities), (iii) its 
Crediting Period, (iv) its Index crediting methodology, (v) its limit on Index loss, and (vi) its 
guaranteed minimum limit on Index gain, is available in an appendix to the prospectus, and 
provide cross-references.  



 

Instruction. This statement may be modified to conform to the table provided in response to 
Item 17(b). 

(2) Describe how interest is calculated and credited for each Index-Linked Option.  

(i) Limits on Index Losses 

(A) State that the Insurance Company will limit the negative Index return used in 
calculating interest credited to an Index-Linked Option at the end of its Crediting 
Period. Describe the manner(s) in which the Insurance Company will limit negative 
returns through the use of a floor, buffer, or some other rate or measure. Provide an 
example of how such rate could operate to limit a negative Index return (e.g., “if the 
Index return is -25% and the buffer rate is -10%, we will credit -15% (the amount that 
exceeds the buffer rate) at the end of the Crediting Period, meaning your Contract 
value will decrease by 15%”). 

(B) Disclose the current limit on Index losses for each Index-Linked Option, and the 
minimum limit guaranteed for the life of the Contract for any Index-Linked Option. State 
that the current limit on Index losses will not change during an Index-Linked Option’s 
Crediting Period. 

(C) Describe the factors the Insurance Company considers in determining the current rate 
for an Index-Linked Option, and how that choice may impact other features of the 
option set by the Insurance Company. Explain what an investor should consider 
regarding limits on Index losses before selecting an Index-Linked Option for 
investment. 

(ii) Limits on Index Gains.  

(A) State that the Insurance Company will limit the positive Index return used in calculating 
interest credited to an Index-Linked Option at the end of its Crediting Period. Describe 
the manner(s) in which the Insurance Company will limit positive returns through the 
use of a cap, participation rate, or some other rate or measure. Provide an example of 
how such rate could operate to limit a positive Index return (e.g., “if the Index return is 
12% and the cap rate is 4%, we will credit 4% in interest at the end of the Crediting 
Period, meaning your Contract value will increase by 4%”). 

(B) Disclose the current limit on Index gains for each Index-Linked Option, and the 
minimum limit guaranteed for the life of the Contract for any Index-Linked Option. State 
that the current limit on Index gains will not change during an Index-Linked Option’s 
Crediting Period.  

(C) Describe the factors the Insurance Company considers in determining the current rate 
for an Index-Linked Option, and how that choice may impact other features of the 
option set by the Insurance Company. Explain what an investor should consider 
regarding limits on Index gains before selecting an Index-Linked Option for investment. 

(iii) Crediting Period. 

(A) Generally describe the Index-Linked Option Crediting Periods available under the 
Contract (e.g., 1, 3, and 6 years) and the factors an investor should consider regarding 
different Crediting Period lengths before selecting an Index-Linked Option for 
investment. 



 

(B) Prominently state that amounts must remain in an Index-Linked Option until the end of 
its Crediting Period to be credited with all or partial interest, as applicable, and to avoid 
a possible Contract Adjustment in addition to potential surrender charges and tax 
consequences. Describe the transactions subject to a Contract Adjustment. Provide 
cross-references to related disclosure in the prospectus. 

(iv) Methodology and Examples.  

(A) For each Index crediting methodology, describe how interest is calculated and credited 
at the end of a Crediting Period based on the interest crediting formula or performance 
measure (e.g. point-to-point, step-up calculations, enhanced performance). 

(B) For each Index, provide a bar chart showing the annual return for each of the last 10 
calendar years (or for the life of the Index if less than 10 years). Provide a hypothetical 
example alongside each Index return that reflects the return after applying a 5% cap 
and a -10% buffer. 

Include the following legend before the bar chart, in the format specified: 

The bar chart shown below provides the Index’s annual returns for the last 10 
calendar years (or for the life of the Index if less than 10 years), as well as the 
Index returns after applying a hypothetical 5% cap and a hypothetical -10% 
buffer. The chart illustrates the variability of the returns from year to year and 
shows how hypothetical limits on Index gains and losses may affect these returns. 
Past performance is not necessarily an indication of future performance. 
 
The performance below is NOT the performance of any Index-Linked Option. Your 
performance under the Contract will differ, perhaps significantly. The 
performance below may reflect a different return calculation, time period, and 
limit on Index gains and losses than the Index-Linked Options, and does not 
reflect Contract fees and charges, including surrender charges and the Contract 
Adjustment, which reduce performance. 

Instructions. 

1. Include only one legend if bar charts for multiple Indexes are 
presented. 

2. Provide the corresponding numerical return adjacent to each bar.  

3. If the Contract does not offer any Index-Linked Option that uses a cap 
in its Index crediting methodology, the Company may reflect the rate or 
measure used to limit Index gains under the Contract assuming a hypothetical 
percentage comparable to a 5% cap. If the Contract does not offer any Index-
Linked Option that uses a buffer in its Index crediting methodology, the 
Company may reflect the rate or measure used to limit Index losses under the 
Contract assuming a hypothetical percentage comparable to a -10% buffer. 

4. If applicable, disclose in a footnote to the table that the Index return 
does not reflect the dividends paid on the assets comprising the Index.  

5. If applicable, disclose in a footnote to the table that the Index provider 
deducts fees and costs when calculating the Index return. 



 

6. Do not include additional performance presentations or historical Index 
performance that precedes the inception of the Index. 

(C) Provide a numerical example to illustrate the mechanics of each type of Index crediting 
methodology in a clear, concise, and understandable manner. 

Include the following legend, in the format specified: 

The following examples illustrate how we calculate and credit interest under each 
Index crediting methodology assuming hypothetical Index returns and 
hypothetical limits on Index gains and losses. The examples assume no 
withdrawals. 

 
Instructions. 

1. Assume hypothetical returns and limits that are reasonable based on current 
and anticipated market conditions and Contract sales. 

2. Include in the example a positive Index return above the limit on Index gains 
and a negative Index return below the limit on Index losses.  

3. Reflect any charges subtracted from interest credited or deducted from 
Contract value in the Index-Linked Options. 

4. Additional examples, charts, graphs, or other presentations may be included if 
clear, concise, and understandable. 

(v) Indexes. 

(A) For each Index, briefly describe the types of investments that compose the Index. 
Direct the investor to additional information about the Index.  

Instructions. 

1. Where there is more than one version of an Index (for example a total return 
version, price return version), it should be clear which Index relates to the Index-
Linked Option.  

2. If the Index is an exchange-traded fund (“ETF”), clarify whether the Index 
performance is based on the ETF’s Net Asset Value or closing value. Also clarify if 
the performance is based on the share price of the ETF and the impact of using 
share price as opposed to total return. 

3. If applicable, state that the Index does not reflect dividends paid on the securities 
comprising the Index, or that the Index deducts fees and costs when calculating 
Index performance, which will reduce Index performance. 

(B) State that the Insurance Company reserves the right to substitute an Index prior to 
the end of a Crediting Period. Explain: (a) all circumstances that could necessitate a 
substitution; (b) how the Insurance Company would choose a replacement Index; (c) 
when and how investors will be notified of any such change; (d) how Index return will 
be calculated at the end of the Crediting Period; and (e) what would happen if a 
suitable replacement Index were not found, including whether the Index-Linked 
Option will be discontinued prior to the end of the Crediting Period. 



 

(vi) Maturity. State whether investors will receive advance notice of a maturing Index-Linked 
Option. Disclose how an investor may provide instructions on reallocating Contract value at 
the end of the Crediting Period, and any automatic default reallocation in the absence of 
such instructions.  

Instruction. Explain how investors will be informed of Index-Linked Options available for 
allocation at the end of a Crediting Period, including any changes to currently offered Index-
Linked Options, and the discontinuance or addition of Index-Linked Options. 

(vii)Other Material Features. Describe any other material aspect of the Index-Linked Options, 
including limitations on transfers to or from the Index-Linked Options, rate holds, “bail-out” 
provisions, start dates, and holding accounts. If applicable, briefly describe how charges may 
impact Index-Linked Option value. 

(e) Fixed Options.  

(1) Describe the Fixed Options currently offered under the Contract. State that information 
regarding the features of each currently offered Fixed Option, including (i) its name, (ii) its term, 
and (iii) its minimum guaranteed interest rate, is available in an appendix to the prospectus, 
and provide cross-references.  

Instruction. This statement may be modified to conform to the table provided in response to 
Item 17(c). 

(2) Describe how interest is calculated and when it is credited for each Fixed Option. Disclose the 
length of the term and the minimum guaranteed interest rate. 

Instruction. Disclose the minimum guaranteed interest rate as a numeric rate, rather than 
referring to any minimums permitted under state law. 

(i) Maturity. If applicable, state whether investors will receive advance notice of a maturing 
Fixed Option. Disclose how an investor may provide instructions on reallocating Contract 
value at the end of the term, and any automatic default reallocation in the absence of such 
instructions.  

Instruction. Explain how investors will be informed of Fixed Options available for allocation at 
the end of a term, including any changes to currently offered Fixed Options, and the 
discontinuance or addition of Fixed Options. 

(ii) Other Material Features. Describe any other material aspect of the Fixed Options, including 
limitations on transfers to or from the Fixed Options, rate holds, start dates, and holding 
accounts. 

Item 7. Charges  

(a) Description. Briefly describe all current charges deducted from purchase payments, Contract value, 
or Investment Option assets, or any other source (e.g., sales loads, premium taxes and other taxes, 
administrative and transaction charges, risk charges, Contract loan charges, and optional benefit 
charges). Indicate whether each charge will be deducted from purchase payments, Contract value, or 
Investment Option assets, the proceeds of withdrawals or surrenders, or some other source. When 
possible, specify the amount of any charge as a percentage or dollar figure (e.g., 0.95% of average 
daily net assets or $5 per exchange). For recurring charges, specify the frequency of the deduction 
(e.g., daily, monthly, annually). Identify the person who receives the amount deducted, briefly explain 
what is provided in consideration for the charges, and explain the extent to which any charge can be 



 

modified. Where it is possible to identify what is provided in consideration for a particular charge 
(e.g., use of sales load to pay distribution costs), explain what is provided in consideration for that 
charge separately. 

Instructions. 

1. Describe the sales loads applicable to the Contract and how sales loads are charged and 
calculated, including the factors affecting the computation of the amount of the sales load. If the 
Contract has a front-end sales load, describe the sales load as a percentage of the applicable 
measure of purchase payments and as a percentage of the net amount invested for each 
breakpoint. For Contracts with a deferred sales load, describe the sales load as a percentage of 
the applicable measure of purchase payments (or other basis) that the deferred sales load may 
represent. Percentages should be shown in a table. Identify any events on which a deferred sales 
load is deducted (e.g., surrender or withdrawal). The description of any deferred sales load should 
include how the deduction will be allocated among Investment Options and when, if ever, the 
sales load will be waived (e.g., if the Contract provides a free withdrawal amount). 

2. Unless set forth in response to Instruction 1, list any special purchase plans or methods 
established pursuant to a rule or an exemptive order that reflect scheduled variations in, or 
elimination of, the sales load (e.g., group discounts, waiver of sales load upon annuitization or 
attainment of a certain age, waiver of deferred sales load for a certain percentage of Contract 
value (“free corridor”), investment of proceeds from another policy, exchange privileges, 
employee benefit plans, or the terms of a merger, acquisition or exchange offer made pursuant to 
a plan of reorganization); identify each class of individuals or transactions to which such plans 
apply; state each different sales charge available as a percentage of the public offering price and 
as a percentage of the net amount invested; and state from whom additional information may be 
obtained. Describe any other special purchase plans or methods established pursuant to a rule 
that reflect other variations in, or elimination of, the sales load or in any administrative charge or 
other deductions from purchase payments, and generally describe the basis for the variation or 
elimination in the sales load or other deduction (i.e., the size of the purchaser, a prior or existing 
relationship with the purchaser, the purchaser’s assumption of certain administrative functions, 
or other characteristics that result in differences in costs or services). 

3. If proceeds from sales loads will not cover the expected costs of distributing the Contracts, 
identify from what source the shortfall, if any, will be paid. If any shortfall is to be made from 
assets from the Insurance Company’s general account, disclose, if applicable, that any amounts 
paid by the Insurance Company may consist, among other things, of proceeds derived from Base 
Contract Expenses. 

4. If the Contract’s charge for premium or other taxes varies according to jurisdiction, identification 
of the range of current premium or other taxes is sufficient. 

(b) Commissions Paid to Dealers. State the commissions paid to dealers as a percentage of purchase 
payments. 

(c) Portfolio Company Charges. State that charges are deducted from and expenses paid out of the 
assets of the Portfolio Companies that are described in the prospectuses for those companies. 

(d) Operating Expenses. Describe any type of operating expenses for which the Registered Separate 
Account is responsible. If organizational expenses of the Registered Separate Account are to be paid 
out of its assets, explain how the expenses will be amortized and the period over which the 
amortization will occur. 



 

(e) Contract Adjustment. Describe any Contract Adjustment under the Contract. 

Instructions. 

1. State the maximum potential loss, as a percentage, that could result from a negative Contract 
Adjustment. 

2. Define the period during which the Contract Adjustment applies. 

3. Describe all transactions subject to the Contract Adjustment. For example, as applicable, state 
whether an adjustment will be applied if amounts are transferred or withdrawn from an Index-
Linked Option or from the Contract due to a partial withdrawal, surrender, election of an annuity 
option, payment of death benefit proceeds, etc., or where a particular Contract option (such as a 
withdrawal under a guaranteed living benefit) is utilized. Describe any circumstances under which 
the adjustment will be waived. 

4. Briefly describe in simple terms the manner in which the Contract Adjustment is determined, 
including: (i) whether the adjustment results from the application of a particular formula or set of 
factors (e.g., a change in value of hypothetical derivative instruments); (ii) the factors that may 
cause a positive or negative adjustment (e.g., timing of withdrawal, Index volatility, increase in 
external interest rates, etc.); (iii) a description of any proportionate withdrawal calculations; and (iv) 
how a positive or negative adjustment is applied (e.g., allocated among the Investment Options, 
applied to a withdrawal amount). Detailed disclosure on the method of calculating the Contract 
Adjustment should be placed in the SAI in response to Item 22. Provide a cross-reference to the SAI 
for more information about the Contract Adjustment, including examples illustrating the operation 
of the adjustment. 

5. State how the Contract Adjustment will affect the Contract value, surrender value, death benefit, 
and any living benefits, and disclose that a negative adjustment could reduce the values under the 
Contract by an amount greater than the value withdrawn. If applicable, state the impact of the 
Contract Adjustment on interest to be credited to an Index-Linked Option at the end of its Crediting 
Period. 

6. Describe the relationship between the Contract Adjustment and any other charges or fees applied 
under the Contract, including, for example, the sequence in which charges and adjustments are 
applied. 

7. Briefly describe the purpose of the Contract Adjustment (e.g., to transfer risk from the Insurance 
Company to the investor to protect the Insurance Company from losses on its own investments 
supporting Contract guarantees if amounts are withdrawn prematurely). 

8. Disclose how an investor can obtain information about the current value of a Contract Adjustment. 
State that this value can fluctuate daily, and the current value quoted to the investor may differ 
from the actual value calculated at the time of adjustment. 

Item 8. General Description of Contracts 

(a) Contract Rights. Identify the person or persons (e.g., the investor, participant, annuitant, or 
beneficiary) who have material rights under the Contracts, and the nature of those rights (1) during 
the accumulation period, (2) during the annuity period, and (3) after the death of the annuitant or 
investor. 

Instruction. Disclose all material state variations and intermediary-specific variations (e.g., variations 
resulting from different brokerage channels) to the offering. 

(b) Contract Provisions and Limitations. Briefly describe any provisions and limitations for: 

(1) minimum Contract value, and the consequences of falling below that amount;  



 

(2) allocation of purchase payments among Investment Options; 

(3) transfer of Contract value between Investment Options, including transfer programs (e.g., dollar 
cost averaging, portfolio rebalancing, asset allocation programs, and automatic transfer 
programs);  

(4) conversion or exchange of Contracts for another contract, including a fixed or variable annuity or 
life insurance contract; and 

Instruction. In discussing conversion or exchange of Contracts, the Registrant should include any 
time limits on conversion or exchange, the name of the company issuing the other contract and 
whether that company is affiliated with the issuer of the Contract, and how the cash value of the 
Contract will be affected by the conversion or exchange. 

(5) buyout offers, including interests or participations therein. 

(c) General Account. Describe the obligations under the Contract that are funded by the Insurance 
Company’s general account (e.g., Index-Linked or Fixed Options, death benefits, living benefits, or 
other benefits available under the Contract), and state that these amounts are subject to the 
Insurance Company’s claims-paying ability and financial strength. 

(d) Contract or Registered Separate Account Changes. Briefly describe the changes that can be made 
in the Contracts or the operations of the Registered Separate Account by the Registered Separate 
Account or the Insurance Company, including: 

(1) why a change may be made (e.g., changes in applicable law or interpretations of law); 

(2) who, if anyone, must approve any change (e.g., the investor or the Commission); and 

(3) who, if anyone, must be notified of any change. 

Instruction. Describe only those changes that would be material to a purchaser of the Contracts, such as 
a reservation of the right to deregister the Registered Separate Account under the Investment Company 
Act or to substitute one Portfolio Company for another. Do not describe possible non-material changes, 
such as changing the time of day at which accumulation unit values are determined. 

(e) Class of Purchasers. Disclose any limitations on the class or classes of purchasers to whom the 
Contract is being offered. 

(f) Frequent Transfers among Variable Options. 

(1) Describe the risks, if any, that frequent transfers of Contract value among Variable Options may 
present for other investors and other persons (e.g., participants, annuitants, or beneficiaries) who 
have material rights under the Contract. 

(2) State whether or not the Registered Separate Account or Insurance Company has adopted 
policies and procedures with respect to frequent transfers of Contract value among Variable 
Options. 

(3) If neither the Registered Separate Account nor the Insurance Company has adopted any such 
policies and procedures, provide a statement of the specific basis for the view of the Insurance 
Company that it is appropriate for the Registered Separate Account and Insurance Company not 
to have such policies and procedures. 



 

(4) If the Registered Separate Account or Insurance Company has any such policies and procedures, 
describe those policies and procedures, including: 

(i) whether or not the Registered Separate Account or Insurance Company discourages frequent 
transfers of Contract value among Variable Options; 

(ii) whether or not the Registered Separate Account or Insurance Company accommodates 
frequent transfers of Contract value among Variable Options; and 

(iii) any policies and procedures of the Registered Separate Account or Insurance Company for 
deterring frequent transfers of Contract value among Variable Options, including any 
restrictions imposed by the Registered Separate Account or Insurance Company to prevent or 
minimize frequent transfers. Describe each of these policies, procedures, and restrictions 
with specificity. Indicate whether each of these restrictions applies uniformly in all cases or 
whether the restriction will not be imposed under certain circumstances, including whether 
each of these restrictions applies to trades that occur through omnibus accounts at 
intermediaries, such as investment advisers, broker-dealers, transfer agents, and third party 
administrators. Describe with specificity the circumstances under which any restriction will 
not be imposed. Include a description of the following restrictions, if applicable: 

(A) any restrictions on the volume or number of transfers that may be made within a given 
time period; 

(B) any transfer fee; 

(C) any costs or administrative or other fees or charges that are imposed on persons deemed 
to be engaged in frequent transfers of Contract value among Variable Options, together 
with a description of the circumstances under which such costs, fees, or charges will be 
imposed; 

(D) any minimum holding period that is imposed before a transfer may be made from a 
Variable Option into another; 

(E) any restrictions imposed on transfer requests submitted by overnight delivery, 
electronically, or via facsimile or telephone; and 

(F) any right of the Registered Separate Account or Insurance Company to reject, limit, delay, 
or impose other conditions on transfers or to terminate or otherwise limit Contracts based 
on a history of frequent transfers among Variable Options, including the circumstances 
under which such right will be exercised. 

(5) If applicable, include a statement, adjacent to the disclosure required by paragraphs (f)(1) 
through (f)(4) of this Item, that the Statement of Additional Information includes a description of 
all arrangements with any person to permit frequent transfers of Contract value among Variable 
Options. 

Item 9. Annuity Period 

Briefly describe the annuity options available. The discussion should include: 

(a) Material factors that determine the level of annuity benefits; 

(b) The annuity commencement date (give the earliest and latest possible dates); 

(c) Frequency and duration of annuity payments, and the effect of these on the level of payment; 



 

(d) The effect of assumed investment return; 

(e) Any minimum amount necessary for an annuity option and the consequences of an insufficient 
amount; and 

(f) Rights, if any, to change annuity options or to effect a transfer of investment base after the annuity 
commencement date. 

Instructions: 

1. Describe the choices, if any, available to a prospective annuitant, and the effect of not specifying 
a choice. Where an annuitant is given a choice in assumed investment return, explain the effect 
of choosing a higher, as opposed to a lower, assumed investment return. 

2. Detailed disclosure on the method of calculating annuity payments should be placed in the SAI in 
response to Item 25. 

(g) If applicable, state that the investor will not be able to withdraw any Contract value amounts after the 
annuity commencement date. 

Item 10. Benefits Available Under the Contract 

(a) Include the following information: 

The following table[s] summarize information about the benefits available under the contract.  
   

Name of Benefit Purpose Is Benefit 
Standard or 
Optional 

Maximum Fee Brief Description 
of Restrictions/ 
Limitations 

   [ ]%  
   [ ]%  
 

Instructions. 

1. General. 

(a) The table required by paragraph (a) of this Item is meant to provide a tabular summary 
overview of the benefits described in paragraph (b) of this Item (e.g., standard or optional 
death benefits, standard or optional living benefits, etc.). 

(b) If the Contract offers multiple benefits of the same type (e.g., death benefit, accumulation 
benefit, withdrawal benefit, long-term care benefit), the Registrant may include multiple tables 
in response to paragraph (a) of this Item, if doing so might better permit comparisons of 
different benefits of the same type. Registrants that choose to use a single table should 
consider whether grouping together multiple benefits of the same type, with appropriate 
headings, might similarly permit better comparisons of those benefits. 

(c) The Registrant should include appropriate titles, headings, or any other information to 
promote clarity and facilitate understanding of the table(s) presented in response to 
paragraph (a) of this Item. For example, if certain optional benefits are only available to 
certain investors (e.g., investors who invested during specific time periods), the table could 
include footnotes or headings to identify which optional benefits are affected and to whom 
those optional benefits are available. 

2. Name of Benefit. State the name of each benefit included in the table(s). 



 

3. Purpose. Briefly describe the purpose of each benefit included in the table(s). 

4. Is Benefit Standard or Optional. State whether the benefit is standard or optional. If the 
Registrant includes titles or headings for the table(s) specifying whether the benefit is standard or 
optional, the Registrant does not need to include the “Is Benefit Standard or Optional” column in 
the table(s). 

5. Maximum Fee. State the maximum fee associated with each benefit included in the table(s). 
Include parentheticals providing information about what the stated percentage refers to (e.g., 
percentage of Contract value, percentage of benefit base, etc.). 

6. Current Fee. The Registrant may disclose the current charge in a separate column titled “Current 
Charge,” if the disclosure of the current charge is no more prominent than, and does not obscure 
or impede understanding of, the disclosure of the maximum charge.  

7. Brief Description of Restrictions/Limitations. Briefly describe the restriction(s) or limitation(s) 
associated with each benefit. Registrants are encouraged to use short phrases (e.g., “benefit 
limits investment options available,” “withdrawals could terminate benefit”) to describe the 
restriction(s) or limitation(s). 

(b) Briefly describe any benefits (e.g., death benefits, living benefits, etc.) offered under a Contract, 
including: 

(1) Whether the benefit is standard or optional; 

(2) The operation of the benefit, including the amount of the benefit and how the benefit amount may 
vary, the circumstances under which the value of the benefit may increase or be reduced 
(including the effect of withdrawals), and how the benefit may be terminated;  

(3) Fees and costs, if any, associated with the benefit; and  

(4) How the benefit amount is calculated and payable and the effect of choosing a specific method of 
payment on calculation of the benefit. 

(c) Briefly describe any limitations, restrictions and risks associated with any benefit offered under the 
Contract (e.g., restrictions on which Portfolio Companies or Investment Options may be selected; risk 
of reduction or termination of benefit or of additional costs resulting from excess withdrawals). 

Instruction. In responding to paragraphs (b) and (c) of this Item, provide one or more examples 
illustrating the operation of each benefit in a clear, concise, and understandable manner. 

Item 11. Purchases and Contract Value 

(a) Briefly describe the procedures for purchasing a Contract. Include a concise explanation of: 

(1) the minimum initial and subsequent purchase payments required and any limitations on the 
amount of purchase payments that will be accepted (if there are separate limits for each 
Investment Option, state these limits);  

(2) a statement of when initial and subsequent purchase payments are credited; and 

(3) a description of how purchase payments are allocated to the Investment Options, including how 
such allocation would take place in the absence of instructions from the investor.  

(b) For Variable Options:(1) Describe the manner in which purchase payments are credited, including: (A) an explanation 
that purchase payments are credited on the basis of accumulation unit value; (B) how 
accumulation unit value is determined; and (C) how the number of accumulation units 
credited to a Contract is determined. 

(2) Explain that investment performance of the Portfolio Companies, expenses, and deduction of 
certain charges affect accumulation unit value and/or the number of accumulation units. 

(3) Describe when calculations of accumulation unit value are made and that purchase payments 
are credited to a Contract on the basis of accumulation unit value next determined after 
receipt of a purchase payment. 

(c) Identify each principal underwriter (other than the Insurance Company) of the Contracts and state its 
principal business address. If the principal underwriter is affiliated with the Registrant or any 
affiliated person of the Registrant, identify how they are affiliated (e.g., the principal underwriter is 
controlled by the Insurance Company). 

Item 12. Surrenders and Withdrawals 

(a) Surrender and Withdrawal. Briefly describe how surrenders and withdrawals can be made from a 
Contract, including any limits on the ability to surrender, how the proceeds are calculated, and when 
they are payable. Briefly describe the potential effect of such surrenders and withdrawals. 

(b) Additional Information Regarding Surrender and Withdrawal. Indicate generally whether and under 
what circumstances surrenders and withdrawals are available under a Contract, including the 
minimum and maximum amounts that may be surrendered or withdrawn, any limits on their 
availability, how the proceeds are calculated, and when the proceeds are payable. 

(c) Effect of Surrender and Withdrawal. Indicate generally whether and under what circumstances 
surrenders or withdrawals will affect a Contract’s cash value, death benefit(s), and/or any living 
benefits, and whether any charge(s) and Contract Adjustment will apply. 

(d) Investment Option Allocation. Describe how surrenders and withdrawals will be allocated to the 
Investment Options, including how such allocation would take place in the absence of instructions 
from the investor. 

Instruction. The Registrant should generally describe the terms and conditions that apply to surrender 
and withdrawal transactions. Technical information regarding the determination of amounts available to 
be surrendered or withdrawn should be included in the SAI. 

(e) Involuntary Redemption. Briefly describe any provision for involuntary redemptions under the 
Contract and the reasons for it, such as the size of the account or infrequency of purchase payments. 

(f) Revocation Rights. Briefly describe any revocation rights (e.g., “free look” provisions), including a 
description of how the amount refunded is determined. Disclose the method for crediting Variable 
Option earnings to purchase payments during the free look period, and whether Investment Options 
are limited during the free look period. 

Item 13. Loans 

Briefly describe the loan provisions of the Contract, including any of the following that are applicable. 

(a) Availability of Loans. State that a portion of the Contract’s cash surrender value may be borrowed. 
State how the amount available for a loan is calculated. 



 

(b) Limitations. Describe any limits on availability of loans (e.g., a prohibition on loans during the first 
Contract year).  

(c) Interest. Describe how interest accrues on the loan, when it is payable, and how interest is treated if 
not paid. Explain how interest on the amount in the collateral account is credited to the Contract and 
allocated to the investment options. 

(d) Effect on Contract Value and Death Benefit. Describe how loans and loan repayments affect Contract 
value and how they are allocated among the investment options, including, if applicable, how such 
allocation would take place in the absence of instructions from the investor. Include (i) a brief 
explanation that amounts borrowed under a Contract do not participate in the investment experience 
of an Investment Option and that loans, therefore, can affect the Contract value and death benefit 
whether or not the loan is repaid, and (ii) a brief explanation that the Contract value at surrender and 
the death proceeds payable will be reduced by the amount of any outstanding Contract loan plus 
accrued interest. 

(e) Other Effects. Describe any other effect that a loan could have on the Contract (e.g., the effect of a 
Contract loan in excess of Contract value). 

(f) Procedures. Describe the loan procedures, including how and when amounts borrowed are 
transferred out of the Investment Options and how and when amounts repaid are credited to the 
Investment Options. 

Item 14. Taxes 

(a) Tax Consequences. Describe the material tax consequences to the investor and beneficiary of buying, 
holding, exchanging, or exercising rights under the Contract. 

Instruction. Discuss the taxation of annuity payments, death benefit proceeds, periodic and non-periodic 
withdrawals, loans, and any other distribution that may be received under the Contract, as well as the tax 
benefits accorded the Contract, and other material tax consequences. Describe, if applicable, whether 
the tax consequences vary with different uses of the Contract. 

(b) Qualified Plans. Identify the types of qualified plans for which the Contracts are intended to be used. 

Instructions: 

1. Identify the types of persons who may use the plans (e.g., corporations, self-employed individuals) 
and disclose, if applicable, that the terms of the plan may limit the rights otherwise available 
under the Contracts. 

2. Do not describe the Internal Revenue Code requirements for qualifications of plans or the non-
annuity tax consequences of qualification (e.g., the effect on employer taxation). 

(c) Effect. Describe the effect, if any, of taxation on the determination of cash values or Contract values. 

Item 15. Legal Proceedings 

Describe any material pending legal proceedings, other than ordinary routine litigation incidental to the 
business, to which the Registered Separate Account, the principal underwriter, or the Insurance 
Company is a party. Include the name of the court where the case is pending, the date instituted, the 
principal parties involved, a description of the factual basis alleged to underlie the proceeding, and the 
relief sought. Include similar information as to any proceedings instituted, or known to be contemplated, 
by a governmental authority. 



 

Instruction. For purposes of this requirement, legal proceedings are material only to the extent that they 
are likely to have a material adverse effect on the Registered Separate Account, the ability of the 
principal underwriter to perform its contract with the Registrant, or the ability of the Insurance Company 
to meet its obligations under the Contracts. 

Item 16. Financial Statements 

If all of the required financial statements of the Registered Separate Account and the Insurance 
Company (see Item 26 and General Instruction C.3.(b)) are not in the prospectus, state, under a separate 
caption, where the financial statements may be found. Briefly explain how investors may obtain any 
financial statements not in the Statement of Additional Information. 

Item 17. Investment Options Available Under the Contract 

Include the following information as an Appendix under the heading “Appendix: Investment Options 
Available Under the Contract.” A Registrant may modify the Appendix heading as appropriate under the 
Contract. 

(a) Variable Options. Include the following legend, in the format specified below: 

The following is a list of Portfolio Companies available under the Contract. More information about the 
Portfolio Companies is available in the prospectuses for the Portfolio Companies, which may be 
amended from time to time and can be found online at [___]. You can also request this information at no 
cost by calling [____] or by sending an email request to [___]. 

The current expenses and performance information below reflects fee and expenses of the Portfolio 
Companies, but do not reflect the other fees and expenses that your Contract may charge [, such as 
Platform Charges]. Expenses would be higher and performance would be lower if these other charges 
were included. Each Portfolio Company’s past performance is not necessarily an indication of future 
performance. 

Type/Investment 
Objective 

Portfolio Company 
and Adviser/ 
Subadviser 

Current Expenses  Average Annual Total Returns 

(as of 12/31/_) 

1 year 5 year 10 year 

[Insert] [Names of Portfolio 
Company and 

adviser/subadviser] 

[_]% [_]% [_]% [_]% 

 
Instructions. 

1. General. 

(a) Only include Portfolio Companies that are investment options under the Contract. Indicate if 
investments in any of the Portfolio Companies are restricted (e.g., because of a “hard” or 
“soft” close). 

(b) The introductory legend to the table must provide a website address, other than the address 
of the Commission’s electronic filing system; toll free telephone number; and email address 
that investors can use to obtain the prospectuses of the Portfolio Companies and to request 
other information about the Portfolio Companies. The website address must be specific 
enough to lead investors directly to the prospectuses of the Portfolio Companies, rather than 
to the home page or other section of the website on which the materials are posted. The 



 

website could be a central site with prominent links to each document. 

(c) The legend may indicate, if applicable, that the prospectuses and other information are 
available from a financial intermediary (such as an insurance sales agent or broker-dealer) 
through which the Contract may be purchased or sold.   

(d) Registrants not relying upon rule 498A(j) under the Securities Act [17 CFR 230.498A(j)] with 
respect to the Portfolio Companies that are investment options under the Contract may, but 
are not required to, provide the next-to-last sentence of the first paragraph of the introductory 
legend to the table regarding online availability of the prospectuses. 

(e) If applicable, include a statement explaining that updated performance information is 
available and providing a website address and/or toll-free (or collect) telephone number 
where the updated information may be obtained. 

2. Type/Investment Objective. Briefly describe each Portfolio Company’s type (e.g., money market 
fund, bond fund, balanced fund, etc.), or include a brief statement describing the Portfolio 
Company’s investment objectives. 

3. Portfolio Company and Adviser/Subadviser. State the name of each Portfolio Company and its 
adviser/subadviser, as applicable. The adviser’s/sub-adviser’s name may be omitted if it is 
incorporated into the name of the Portfolio Company. A Registrant also need not identify a sub-
adviser whose sole responsibility for the Portfolio Company is limited to day-to-day management 
of the Portfolio Company’s holdings of cash and cash equivalent instruments, unless the Portfolio 
Company is a money market fund or other Portfolio Company with a principal investment strategy 
of regularly holding cash and cash equivalent instruments. If the Portfolio Company has three or 
more sub-advisers, each of which manages a portion of the Portfolio Company’s portfolio, the 
Registrant need not identify each such sub-adviser, except that the Registrant must identify any 
sub-adviser that is (or is reasonably expected to be) responsible for the management of a 
significant portion of the Portfolio Company’s net assets. For purposes of this paragraph, a 
significant portion of a Portfolio Company’s net assets generally will be deemed to be 30% or 
more of the Portfolio Company’s net assets. 

4. Current Expenses. Report “Total Annual Fund Operating Expenses” as calculated pursuant to Item 
3 of Form N-1A [17 CFR §§ 239.15A and 274.11A], reflecting any expense reimbursements or 
fee waiver arrangements that are in place and reported in the Portfolio Company’s registration 
statement pursuant to Item 3 of Form N-1A. If applicable, identify each Portfolio Company subject 
to an expense reimbursement or fee waiver arrangement and provide a footnote stating that their 
annual expenses reflect temporary fee reductions.  

5. Platform Charge. If the Insurance Company charges a Platform Charge to make any of the 
Portfolio Companies available as investment options under the Contract, add a column titled 
“Platform Charge” disclosing the current Platform Charge for each Portfolio Company. If 
applicable, also provide a footnote indicating the highest level to which any relevant Platform 
Charge may be increased.  

6. Current Expenses + Platform Charge. If the Insurance Company charges a Platform Charge to 
make any of the Portfolio Companies available as investment options under the Contract, add a 
column titled “Current Expenses + Platform Charge.” The column contemplated by this Instruction 
must be presented in a manner reasonably calculated to draw investor attention to that column. 

7. Average Annual Total Returns.  For purposes of this Item, “average annual total returns” means 
the “average annual total return” (before taxes) as calculated pursuant to Item 4(b)(2)(iii) of Form 

https://www.law.cornell.edu/cfr/text/17/239.15A


 

N-1A. 

(b) Index-Linked Options. Include the following legend, in the format specified below: 

The following is a list of Index-Linked Options currently available under the Contract. We may change the 
features of the Index Linked Options listed below (including the Index and the current limits on Index 
gains and losses), offer new Index-Linked Options, and terminate existing Index-Linked Options. We will 
provide you with written notice before doing so. Information about current limits on Index gains is 
available at [provide website address]. 

 
Note: If amounts are withdrawn from an Index-Linked Option before the end of its Crediting Period, we 
may apply a Contract Adjustment. This may result in a significant reduction in your Contract value that 
could exceed any protection from Index loss that would be in place if you held the option until the end of 
the Crediting Period. 

Index Type of Index Crediting Period  
Index Crediting 
Methodology 

Limit on Index 
Loss (if held 
until end of 

Crediting 
Period) 

Guaranteed 
Minimum Limit 
on Index Gain 

[Name of Index] [Insert] [  ] Year [  ]  [  ]%  [  ]%  

Instructions. 

1. General.  

(a) Include appropriate cross-references in the legend to the section(s) of the prospectus that 
describe the features of the Index-Linked Options as well as the Contract Adjustment. 

(b) Only include those Index Linked Options that are available under the Contract. Indicate if 
investments in any of the Index-Linked Options are restricted (e.g., because of a “hard” or 
“soft” close). 

(c) An Insurance Company may add, modify, or exclude table headings only as necessary to 
describe the material features of an Index-Linked Option. 

(d) If an Index provider calculates the Index return in a manner that does not reflect the full 
investment performance of the assets tracked by the Index (e.g., the return does not reflect 
dividends paid on the assets composing the Index, the return reflects a fee or cost, etc.), 
then include, if applicable, a footnote to the table stating that the Index return does not 
reflect the full investment performance of the assets it tracks, which will reduce Index 
performance. 

(e) The website address in the legend must be specific enough to lead investors directly to 
current rates, rather than to the home page or other section of the website on which the 
rates are posted. 

2. Index. Provide the name of the Index. 

3. Type. Briefly describe the type of Index (e.g., market index, exchange-traded fund, etc.), or 
include a brief statement describing the assets that the Index seeks to track (e.g., U.S. large-cap 



 

equities). 

4. Crediting Period. State the duration of the Index-Linked Option. 

5. Index Crediting Methodology. If the Insurance Company utilizes multiple index crediting 
methodologies under the Contract (e.g., point-to-point, step-up, enhanced upside, etc.), include a 
column indicting the type of methodology used for each Index-Linked Option.  

6. Limit on Index Loss (if held until end of Crediting Period). State the current percentage used by 
the Insurance Company in its interest crediting methodology to limit the amount of negative 
Index return credited to the Index-Linked Option. Identify in the table whether this limit is a 
buffer, floor, or some other rate or measure. 

7. Limit on Index Gain. State the guaranteed minimum percentage the Insurance Company may 
use in its interest crediting methodology to limit the amount of positive Index return credited to 
the Index-Linked Option. Identify in the table whether this limit is a cap, participation rate, or 
some other rate or measure. 

(c) Fixed Options. Include the following legend, in the format specified below: 

The following is a list of Fixed Options currently available under the Contract. We may change the 
features of the Fixed Options listed below, offer new Fixed Options, and terminate existing Fixed Options. 
We will provide you with written notice before doing so. 

Name Term 
Minimum Guaranteed Interest 

Rate 

[Name of Fixed Option] [  ] Year [  ]% 

Instructions. 

1. General.  

(a) Include appropriate cross-references in the legend to the section(s) of the prospectus that 
describe the features of the Fixed Options. 

(b) Only include those Fixed Options that are available under the Contract. 

(c) A Company may add, modify, or exclude table headings only as necessary to describe the 
material features of a Fixed Option. 

2. Term. State the duration of the Fixed Option. 

3. Minimum Guaranteed Interest Rate. Disclose the minimum guaranteed interest rate as a 
numeric rate, rather than referring to any minimums permitted under state law.  

(d) Restrictions. If the availability of one or more Investment Options varies by benefit offered under 
the Contract: 

(1) The following sentence should be added to the first paragraph of the legend preceding each table 
above, as applicable: “Depending on the [optional] benefits you choose, you may not be able to 
invest in certain Investment Options, as noted below.”; and 

(2) Indicate which Investment Options are available (or are restricted) under the benefits offered 



 

under the Contract. The Appendix could incorporate a separate table that is structured pursuant 
to the following example, or could use any other presentation that might promote clarity and 
facilitate understanding: 

[Investment Option] [Benefit #1] [Benefit #2] [Benefit #3] [Benefit #4] 

Investment Option A     

Investment Option B     

Investment Option C     

Investment Option D     

 

  



 

PART B - INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION 

Item 18. Cover Page and Table of Contents  

(a) Front Cover Page. Include the following information on the outside front cover page of the SAI: 

(1) The Registered Separate Account’s name. 

(2) The Insurance Company’s name. 

(3) The name of the Contract and the Class or Classes, if any, to which the Contract relates. 

(4) A statement or statements:  

(i) That the SAI is not a prospectus;  

(ii) How the prospectus may be obtained; and 

(iii) Whether and from where information is incorporated by reference into the SAI, as permitted 
by General Instruction D. 

Instruction. Any information incorporated by reference into the SAI must be delivered with the SAI. 

(5) The date of the SAI and the prospectus to which the SAI relates. 

(b) Table of Contents. Include under appropriate captions (and subcaptions) a list of the contents of the 
SAI and, when useful, provide cross-references to related disclosure in the prospectus. 

Item 19. General Information and History 

(a) Insurance Company. Provide the date and form of organization of the Insurance Company, the name 
of the state or other jurisdiction in which the Insurance Company is organized, and a description of 
the general nature of the Insurance Company’s business. 

Instruction. The description of the Insurance Company’s business should be short and need not list all of 
the businesses in which the Insurance Company engages or identify the jurisdictions in which it does 
business if a general description (e.g., “variable annuity” or “reinsurance”) is provided. 

(b) Registered Separate Account. Provide the date and form of organization of the Registered Separate 
Account and the Registered Separate Account’s classification pursuant to section 4 of the Investment 
Company Act [15 U.S.C. 80a-4] (i.e., a separate account and a unit investment trust). 

(c) History of Insurance Company and Registered Separate Account. If the Insurance Company’s name 
was changed during the past five years, state its former name and the approximate date on which it 
was changed. If, at the request of any state, sales of contracts offered by the Registered Separate 
Account have been suspended at any time, or if sales of contracts offered by the Insurance Company 
have been suspended during the past five years, briefly describe the reasons for and results of the 
suspension. Briefly describe the nature and results of any bankruptcy, receivership, or similar 
proceeding, or any other material reorganization, readjustment, or succession of the Insurance 
Company during the past five years. 

(d) Ownership of Registered Separate Account Assets. If 10 percent or more of the assets of any 
Variable Option are not attributable to Contracts or to accumulated deductions or reserves (e.g., 
initial capital contributed by the Insurance Company), state what percentage those assets are of the 
total assets of the Registered Separate Account. If the Insurance Company, or any other person 
controlling the assets, has any present intention of removing the assets from the Registered 



 

Separate Account, so state. 

(e) Control of Insurance Company. State the name of each person who controls the Insurance Company 
and the nature of its business. 

Instruction. If the Insurance Company is controlled by another person that, in turn, is controlled by 
another person, give the name of each control person and the nature of its business. 

Item 20. Non-Principal Risks of Investing in the Contract 

Summarize the non-principal risks of purchasing a Contract to the extent not disclosed in the prospectus.  

Item 21. Services 

(a) Expenses Paid by Third Parties. Describe all fees, expenses, and costs of the Registered Separate 
Account that are to be paid by persons other than the Insurance Company or the Registered Separate 
Account, and identify those persons. 

(b) Service Agreements. Summarize the substantive provisions of any management-related service 
contract that may be of interest to a purchaser of the Contracts, under which services are provided to 
the Registrant in connection with the Contracts, unless the contract is described in response to some 
other item of the form. Indicate the parties to the contract, and the total dollars paid and by whom for 
each of the past three years.  

Instructions: 

1. The term “management-related service contract” includes any contract with the Registrant to 
keep, prepare, or file accounts, books, records, or other documents required under federal or 
state law, or to provide any similar services with respect to the daily administration of the 
Registered Separate Account, but does not include the following:  

(a) Any agreement with the Registrant to act as custodian or agent to administer purchases and 
redemptions under the Contracts, and  

(b) Any contract with the Registrant for outside legal or auditing services, or contract for personal 
employment entered into with the Registrant in the ordinary course of business. 

2. In summarizing the substantive provisions of any management-related service contract, include 
the following:  

(a) The name of the person providing the service;  

(b) The direct or indirect relationships, if any, of the person with the Registered Separate Account, 
the Insurance Company, or the principal underwriter; and 

(c) The nature of the services provided, and the basis of the compensation paid for the services 
for the Registrant’s last three fiscal years. 

(c) Other Service Providers. 

(1) Unless disclosed in response to paragraph (b) or another item of this form, identify and state the 
principal business address of any person who provides significant administrative or business 
affairs management services for the Registrant in connection with the Contracts (e.g., an 
“Administrator,” “Sub-Administrator,” “Servicing Agent”), describe the services provided, and the 
compensation paid for the services. 



 

(2) State the name and principal business address of the Registered Separate Account’s custodian 
and Registrant’s independent public accountant and describe generally the services performed by 
each. 

(3) If the Registered Separate Account’s assets are held by a person other than the Insurance 
Company, a commercial bank, trust company, or depository registered with the Commission as 
custodian, state the nature of the business of each such person. 

(4) If an affiliated person of the Registered Separate Account or the Insurance Company, or an 
affiliated person of such an affiliated person, acts as administrative or servicing agent for the 
Registrant in connection with the Contracts, describe the services the person performs and the 
basis for remuneration. State, for the past three years, the total dollars paid for the services, and 
by whom. 

Instruction. No disclosure need be given in response to paragraph (c)(4) of this Item for an 
administrative or servicing agent who is also the Insurance Company. 

(5) If the Insurance Company is the principal underwriter of the Contracts, so state. 

Item 22. Purchase of Securities Being Offered 

(a) Describe the manner in which Registrant’s securities are offered to the public. Include a description 
of any special purchase plans and any exchange privileges not described in the prospectus. 

Instruction. Address exchange privileges between Investment Options, between the Registered Separate 
Account and other separate accounts, and between the Registered Separate Account and contracts 
offered through the Insurance Company’s general account. 

(b) Describe the method that will be used to determine the sales load on the Contracts offered by the 
Registrant. 

Instruction. Explain fully any difference in the price at which Contracts are offered to members of the 
public, as individuals or as groups, and the prices at which the Contracts are offered for any class of 
transactions or to any class of individuals, including officers, directors, members of the board of 
managers, or employees of the Insurance Company, underwriter, Portfolio Company, or investment 
adviser to the Portfolio Company. 

(c) Frequent Transfer Arrangements. Describe any arrangements with any person to permit frequent 
transfers of Contract value among Variable Options, including the identity of the persons permitted to 
engage in frequent transfers pursuant to such arrangements, and any compensation or other 
consideration received by the Registered Separate Account, the Insurance Company, or any other 
party pursuant to such arrangements.  

Instructions: 

1. The consideration required to be disclosed by paragraph (c) of this Item includes any agreement 
to maintain assets in the Registered Separate Account or in other investment companies or 
accounts managed or sponsored by the Insurance Company, any investment adviser of a Portfolio 
Company, or any affiliated person of the Insurance Company or of any such investment adviser. 

2. If the Registrant has an arrangement to permit frequent transfers of Contract value among 
Variable Options by a group of individuals, such as the participants in a defined contribution plan 
that meets the requirements for qualification under section 401(k) of the Internal Revenue Code 
(26 U.S.C. 401(k)), the Registrant may identify the group rather than identifying each individual 



 

group member. 

(d) Contract Adjustment. Fully explain the operation of any Contract Adjustment under the Contract, 
including any formulas used to calculate the adjustment. 

Instruction. Include one or more numeric examples to illustrate the application of the Contract 
Adjustment. The example should include a negative adjustment, reflect surrender charges, if 
applicable, and disclose the percentage change in Contract value as a result of the adjustment. 

Item 23. Underwriters 

(a) Identification. Identify each principal underwriter (other than the Insurance Company) of the 
Contracts, and state its principal business address. If the principal underwriter is affiliated with the 
Registered Separate Account, the Insurance Company, or any affiliated person of the Registered 
Separate Account or the Insurance Company, identify how they are affiliated (e.g., the principal 
underwriter is controlled by the Insurance Company). 

(b) Offering and Commissions. For each principal underwriter distributing Contracts of the Registrant, 
state: 

(1) whether the offering is continuous; and 

(2) the aggregate dollar amount of underwriting commissions paid to, and the amount retained by, 
the principal underwriter for each of the Registrant’s last three fiscal years. 

(c) Other Payments. With respect to any payments made by the Registrant to an underwriter of or dealer 
in the Contracts during the Registrant’s last fiscal year, disclose the name and address of the 
underwriter or dealer, the amount paid and basis for determining that amount, the circumstances 
surrounding the payments, and the consideration received by the Registrant.  Do not include 
information about: 

(1) Payments made through deduction from purchase payments made at the time of sale of the 
Contracts; or 

(2) Payments made from Contract values upon surrender of or withdrawal from the Contracts  

Instructions. 

1. Information need not be given about the service of mailing proxies or periodic reports of the 
Registered Separate Account. 

2. Exclude information about bona fide contracts with the Registered Separate Account or the 
Insurance Company for outside legal or auditing services, or bona fide contracts for personal 
employment entered into with the Registered Separate Account or the Insurance Company in the 
ordinary course of business. 

3. Information need not be given about any service for which total payments of less than 
$15,000 were made during each of the Registrant’s last three fiscal years. 

4. Information need not be given about payments made under any contract to act as 
administrative or servicing agent. 

5. If the payments were made under an arrangement or policy applicable to dealers generally, 
describe only the arrangement or policy. 



 

Item 24. Calculation of Performance Data 

(a) Money Market Funded Sub-Accounts. Yield quotation(s) included in the prospectus for an account or 
sub-account of a Registered Separate Account that holds itself out as a “money market” account or 
sub-account should be calculated according to paragraphs (a)(1) - (2). 

(1) Yield Quotation. Based on the 7 days ended on the date of the most recent balance sheet of the 
Registered Separate Account included in the registration statement, calculate the yield by 
determining the net change, exclusive of capital changes and income other than investment 
income, in the value of a hypothetical pre-existing account having a balance of one accumulation 
unit of the account or sub-account at the beginning of the period, subtracting a hypothetical 
charge reflecting deductions from Contracts, and dividing the difference by the value of the 
account at the beginning of the base period to obtain the base period return, and then multiplying 
the base period return by (365/7) with the resulting yield figure carried to at least the nearest 
hundredth of one percent. 

(2) Effective Yield Quotation. Based on the 7 days ended on the date of the most recent balance 
sheet of the Registered Separate Account included in the registration statement, calculate the 
effective yield, carried to at least the nearest hundredth of one percent, by determining the net 
change, exclusive of capital changes and income other than investment income, in the value of a 
hypothetical pre-existing account having a balance of one accumulation unit of the account or 
sub-account at the beginning of the period, subtracting a hypothetical charge reflecting 
deductions from Contracts, and dividing the difference by the value of the account at the 
beginning of the base period to obtain the base period return, and then compounding the base 
period return by adding 1, raising the sum to a power equal to 365 divided by 7, and subtracting 
1 from the result, according to the following formula: 

EFFECTIVE YIELD = [(BASE PERIOD RETURN +1)365/7]-1. 

Instructions: 

1. When calculating the yield or effective yield quotations, the calculation of net change in account 
value must include all deductions that are charged to all Contracts in proportion to the length of 
the base period. For any account fees that vary with the size of the account, assume an account 
size equal to the sub-account’s mean (or median) account size. 

2. Deductions from purchase payments and sales loads assessed at the time of redemption or 
annuitization should not be reflected in the computation of yield and effective yield. However, the 
amount or specific rate of such deductions must be disclosed. 

3. Exclude realized gains and losses from the sale of securities and unrealized appreciation and 
depreciation from the calculation of yield and effective yield. Exclude income other than 
investment income. 

4. If applicable, disclose that the performance information may not reflect all Contract charges 
(contracts may impose certain charges that are not reflected in the performance of the sub-
account, but reduce the value of an investment in the sub-account, such as optional benefit 
charges).  Performance would be lower if these charges were included. 

(b) Other Sub-Accounts. Performance information included in the prospectus for the Registered 
Separate Account should be calculated according to paragraphs (b)(i) – (iii). 

(1) Average Annual Total Return Quotation. For the 1-, 5-, and 10-year periods ended on the date of 
the most recent balance sheet of the Registered Separate Account included in the registration 



 

statement, calculate the average annual total return by finding the average annual compounded 
rates of return over the 1-, 5-, and 10-year periods that would equate the initial amount invested 
to the ending redeemable value, according to the following formula: 

P(1+T)n = ERV 

Where: 

P =  a hypothetical initial purchase payment of $1,000  

T = average annual total return 

n = number of years 

ERV   = ending redeemable value of a hypothetical $1,000 purchase payment made 
at the beginning of the 1-, 5-, or 10-year periods at the end of the 1-, 5-, or 10- 
year periods (or fractional portion). 

Instructions: 

1. Assume the maximum sales load (or other charges deducted from purchase payments) is 
deducted from the initial $1,000 purchase payment. 

2. Include all recurring fees that are charged to all Contracts. For any account fees that vary with 
the size of the account, assume an account size equal to the sub-account’s mean (or median) 
account size. If recurring fees charged to Contracts are paid other than by redemption of 
accumulation units, they should be appropriately reflected. 

3. Determine the ending redeemable value by assuming a complete redemption at the end of 
the 1-, 5-, or 10- year periods and the deduction of all nonrecurring charges deducted at the 
end of each period. 

4. If the Registered Separate Account’s registration statement has been in effect less than one, 
five, or ten years, the time period during which the registration statement has been in effect 
should be substituted for the period stated. 

5. Carry the total return quotation to the nearest hundredth of one percent. 

6. Total return information in the prospectus need only be current to the end of the Registered 
Separate Account’s most recent fiscal year. 

7. If applicable, disclose that the performance information may not reflect all Contract charges 
and provide one or more examples of such charges (contracts may impose certain charges 
that are not reflected in the performance of the sub-account, but reduce the value of an 
investment in the sub-account, such as optional benefit charges). State that performance 
would be lower if these charges were included. 

(2) Yield Quotation. Based on a 30-day (or one month) period ended on the date of the most recent 
balance sheet of the Registered Separate Account included in the registration statement, 
calculate yield by dividing the net investment income per accumulation unit earned during the 
period by the maximum offering price per unit on the last day of the period, according to the 
following formula: 



 

YIELD = 2[(𝑎𝑎−𝑏𝑏
𝑐𝑐𝑐𝑐

+ 1)6 – 1] 

Where: 

a = net investment income earned during the period by the Portfolio Company attributable 
to shares owned by the sub-account 

b = expenses accrued for the period (net of reimbursements) 

c = the average daily number of accumulation units outstanding during the period 

d = the maximum offering price per accumulation unit on the last day of the period. 

Instructions: 

1. Include among the expenses accrued for the period all recurring fees that are charged to all 
Contracts. For any account fees that vary with the size of the account, assume an account size 
equal to the sub-account’s mean (or median) account size. 

2. If a broker-dealer or an affiliate (as defined in paragraph (b) of rule 1-02 of Regulation S-X [17 
CFR 210.1-02(b)]) of the broker-dealer has, in connection with directing the Portfolio 
Company’s brokerage transactions to the broker-dealer, provided, agreed to provide, paid for, 
or agreed to pay for, in whole or in part, services provided to the Portfolio Company (other than 
brokerage and research services as these terms are defined in section 28(e) of the Securities 
Exchange Act [15 U.S.C. 78bb(e)]), add to expenses accrued for the period an estimate of 
additional amounts that would have been accrued for the period if the Portfolio Company had 
paid for the services directly in an arms-length transaction. 

3. Net investment income must be calculated by the Portfolio Company as prescribed by Item 
26(b)(4) of Form N-1A. 

NOTE: (a-b) = net investment income in the Item 26(b)(4) equation. 

4. Disclose the amount or specific rate of any nonrecurring account or sales charges. 

5. If applicable, disclose that the performance information may not reflect all Contract charges 
(contracts may impose certain charges that are not reflected in the performance of the sub-
account, but reduce the value of an investment in the sub-account, such as optional benefit 
charges). State that performance would be lower if these charges were included. 

(3) Non-Standardized Performance Quotation. A Registered Separate Account may calculate 
performance using any other historical measure of performance (not subject to any prescribed 
method of computation) if the measurement reflects all elements of return. 

Item 25. Annuity Payments 

Describe the method for determining the amount of annuity payments if not described in the prospectus. 
In addition, describe how any change in the amount of a payment after the first payment is determined. 

Item 26. Financial Statements 

(a) Registered Separate Account. Provide financial statements of the Registered Separate Account. 

Instructions. Include, in a separate section, the financial statements and schedules required by 
Regulation S-X [17 CFR 210]. Financial statements of the Registered Separate Account may be limited 



 

to: 

(i) An audited balance sheet or statement of assets and liabilities as of the end of the most recent 
fiscal year; 

(ii) An audited statement of operations of the most recent fiscal year conforming to the requirements 
of rule 6-07 of Regulation S-X [17 CFR 210.6-07]; 

(iii) An audited statement of cash flows for the most recent fiscal year if necessary to comply with 
generally accepted accounting principles; and 

(iv) Audited statements of changes in net assets conforming to the requirements of rule 6-09 of 
Regulation S-X [17 CFR 210.6-09] for the two most recent fiscal years. 

(b) Insurance Company. Provide financial statements of the Insurance Company. 

Instructions: 

1. Include, in a separate section, the financial statements and schedules of the Insurance 
Company required by Regulation S-X. If the Insurance Company would not have to prepare 
financial statements in accordance with generally accepted accounting principles except for 
use in this registration statement or other registration statements filed on Forms N-3, N-4, or 
N-6, its financial statements may be prepared in accordance with statutory requirements. The 
Insurance Company’s financial statements must be prepared in accordance with generally 
accepted accounting principles if the Insurance Company prepares financial information in 
accordance with generally accepted accounting principles for use by the Insurance Company’s 
parent, as defined in rule 1-02(p) of Regulation S-X [17 CFR 210.1-02(p)], in any report under 
sections 13(a) and 15(d) of the Securities Exchange Act [15 U.S.C. 78m(a) and 78o(d)] or any 
registration statement filed under the Securities Act. 

2. All statements and schedules of the Insurance Company required by Regulation S-X, except for 
the consolidated balance sheets described in rule 3-01 of Regulation S-X [17 CFR 210.3-01], 
and any notes to these statements or schedules, may be omitted from Part B and instead 
included in Part C of the registration statement. If any of this information is omitted from Part B 
and included in Part C, the consolidated balance sheets included in Part B should be 
accompanied by a statement that additional financial information about the Insurance 
Company is available, without charge, upon request. When a request for the additional 
financial information is received, the Registrant should send the information within 3 business 
days of receipt of the request, by first-class mail or other means designed to ensure equally 
prompt delivery. 

1. Notwithstanding rule 3-12 of Regulation S-X [17 CFR 210.3-12], the financial statements of the 
Insurance Company need not be more current than as of the end of the most recent fiscal year 
of the Insurance Company. In addition, when the anticipated effective date of a registration 
statement falls within 90 days subsequent to the end of the fiscal year of the Insurance 
Company, the registration statement need not include financial statements of the Insurance 
Company more current than as of the end of the third fiscal quarter of the most recently 
completed fiscal year of the Insurance Company unless the audited financial statements for 
such fiscal year are available. The exceptions to rule 3-12 of Regulation S-X contained in this 
Instruction 3 do not apply when: 

(a) The Insurance Company’s financial statements have never been included in an effective 
registration statement under the Securities Act of a separate account that offers variable 
annuity contracts or variable life insurance contracts; or 



 

(b) The balance sheet of the Insurance Company at the end of either of the two most recent 
fiscal years included in response to this Item shows a combined capital and surplus, if a 
stock company, or an unassigned surplus, if a mutual company, of less than $2,500,000; 
or 

(c) The balance sheet of the Insurance Company at the end of a fiscal quarter within 135 days 
of the expected date of effectiveness under the Securities Act (or a fiscal quarter within 90 
days of filing if the registration statement is filed solely under the Investment Company Act) 
would show a combined capital surplus, if a stock company, or an unassigned surplus, if a 
mutual company, of less than $2,500,000. If two fiscal quarters end within the 135 day 
period, the Insurance Company may choose either for purposes of this test. 

Any interim financial statements required by this Item need not be comparative with financial statements 
for the same interim period of an earlier year. 

(c) Changes in and Disagreements with Accountants. For Contracts with Index-Linked Options, include 
the information required by Item 304 of Regulation S-K [17 CFR 229.304]. 

 



 

PART C - OTHER INFORMATION

Item 27. Exhibits 

Subject to General Instruction D regarding incorporation by reference and rule 483 under the Securities 
Act [17 CFR 230.483], file the exhibits listed below as part of the registration statement. Letter or 
number the exhibits in the sequence indicated and file copies rather than originals, unless otherwise 
required by rule 483. Reflect any exhibit incorporated by reference in the list below and identify the 
previously filed document containing the incorporated material. 

(a) Board of Directors Resolution. The resolution of the board of directors of the Insurance Company 
authorizing the establishment of the Registered Separate Account. 

(b) Custodian Agreements. All agreements for custody of securities and similar investments of the 
Registered Separate Account, including the schedule of remuneration. 

(c) Underwriting Contracts. Underwriting or distribution contracts between the Registered Separate 
Account or Insurance Company and a principal underwriter and agreements between principal 
underwriters or the Insurance Company and dealers. 

(d)  Contracts. The form of each Contract, including any riders or endorsements. 

(e) Applications. The form of application used with any Contract provided in response to (d) above. 

(f) Insurance Company’s Certificate of Incorporation and By-Laws. The Insurance Company’s current 
certificate of incorporation or other instrument of organization and by-laws and any related 
amendment. 

(g) Reinsurance Contracts. Any contract of reinsurance related to a Contract. 

(h) Participation Agreements. Any participation agreement or other contract relating to the investment by 
the Registered Separate Account in a Portfolio Company. 

(i) Administrative Contracts. Any contract relating to the performance of administrative services in 
connection with administering a Contract. 

(j) Other Material Contracts. Other material contracts not made in the ordinary course of business to be 
performed in whole or in part on or after the filing date of the registration statement. 

(k) Legal Opinion. An opinion and consent of counsel regarding the legality of the securities being 
registered, stating whether the securities will, when sold, be legally issued and represent binding 
obligations of the Insurance Company. 

(l) Other Opinions. Copies of any other opinions, appraisals, or rulings, and consents of their use relied 
on in preparing this registration statement and required by section 7 of the Securities Act [15 U.S.C. 
77g]. 

(m) Omitted Financial Statements. Financial statements omitted from Item 26. 

(n) Initial Capital Agreements. Any agreements or understandings made in consideration for providing 
the initial capital between or among the Registered Separate Account, Insurance Company, 
underwriter, or initial investors and written assurances from the Insurance Company or initial 
investors that purchases were made for investment purposes and not with the intention of redeeming 
or reselling.  



 

(o) Form of Initial Summary Prospectuses. The form of any Initial Summary Prospectus that the 
Registrant intends to use on or after the effective date of the registration statement, pursuant to rule 
498A under the Securities Act [17 CFR 230.498A]. 

(p) Power of attorney. Any power of attorney included pursuant to rule 483(b) under the Securities Act 
[17 CFR 230.483(b)]. 

(q) Letter Regarding Change in Certifying Accountant. For Contracts with Index-Linked Options, a letter 
from the Insurance Company’s former independent accountant regarding its concurrence or 
disagreement with the statements made by the Insurance Company in the registration statement 
concerning the resignation or dismissal as the Insurance Company’s principal accountant. 

Instructions. 

1. Schedules (or similar attachments) to the exhibits required by this Item are not required to be 
filed provided that they do not contain information material to an investment or voting decision 
and that information is not otherwise disclosed in the exhibit or the disclosure document. Each 
exhibit filed must contain a list briefly identifying the contents of all omitted schedules. 
Registrants need not prepare a separate list of omitted information if such information is 
already included within the exhibit in a manner that conveys the subject matter of the omitted 
schedules and attachments. In addition, the Registrant must provide a copy of any omitted 
schedule to the Commission or its staff upon request. 

2. The Registrant may redact information from exhibits required to be filed by this Item if 
disclosure of such information would constitute a clearly unwarranted invasion of personal 
privacy (e.g., disclosure of bank account numbers, social security numbers, home addresses 
and similar information). 

3. The Registrant may redact specific provisions or terms of exhibits required to be filed by 
paragraphs (g) and (j) of this Item if the Registrant customarily and actually treats that 
information as private or confidential and if the omitted information is not material. If it does 
so, the Registrant should mark the exhibit index to indicate that portions of the exhibit or 
exhibits have been omitted and include a prominent statement on the first page of the 
redacted exhibit that certain identified information has been excluded from the exhibit 
because it is both not material and the type that the Registrant treats as private or 
confidential. The Registrant also must include brackets indicating where the information is 
omitted from the filed version of the exhibit. If requested by the Commission or its staff, the 
Registrant must promptly provide on a supplemental basis an unredacted copy of the exhibit 
and its materiality and privacy or confidentiality analyses. Upon evaluation of the Registrant’s 
supplemental materials, the Commission or its staff may require the Registrant to amend its 
filing to include in the exhibit any previously redacted information that is not adequately 
supported by the Registrant’s analyses. The Registrant may request confidential treatment of 
the supplemental material submitted under this Instruction 3 pursuant to Rule 83 of the 
Commission’s Organizational Rules [17 CFR 200.83] while it is in the possession of the 
Commission or its staff. After completing its review of the supplemental information, the 
Commission or its staff will return or destroy it, if the Registrant complies with the procedures 
outlined in Rule 418 under the Securities Act [17 CFR 230.418]. 

4. Each exhibit identified in the exhibit index (other than an exhibit filed in eXtensible Business 
Reporting Language) must include an active link to an exhibit that is filed with the registration 
statement or, if the exhibit is incorporated by reference, an active hyperlink to the exhibit 
separately filed on EDGAR. If the registration statement is amended, each amendment must 
include active hyperlinks to the exhibits required with the amendment. 



 

5. Registrants are required to provide the Initial Summary Prospectus exhibits, as required by 
paragraph (o) of this Item, only in connection with the filing of an initial registration statement, 
or in connection with a pre-effective amendment or a post-effective amendment filed in 
accordance with paragraph (a) of rule 485 under the Securities Act [17 CFR 230.485(a)]. 
Registrants should add a legend clearly identifying the document as a form of Initial Summary 
Prospectus the Registrant intends to use on or after the effective date of the registration 
statement. 

Item 28. Directors and Officers of the Insurance Company 

Provide the following information about each director or officer of the Insurance Company: 

(1) 

Name and Principal Business Address 

(2) 

Positions and Offices with Insurance Company 

Instruction. Registrants are required to provide the above information only for officers or directors who are 
engaged directly or indirectly in activities relating to the Registered Separate Account or the Contracts, and 
for executive officers including the Insurance Company’s president, secretary, treasurer, and vice 
presidents who have authority to act as president in the president’s absence. 

Item 29. Persons Controlled by or Under Common Control with the Insurance Company or the Registered 
Separate Account 

Provide a list or diagram of all persons directly or indirectly controlled by or under common control with 
the Insurance Company or the Registered Separate Account. For any person controlled by another 
person, disclose the percentage of voting securities owned by the immediately controlling person or 
other basis of that person’s control. For each company, also provide the state or other sovereign power 
under the laws of which the company is organized. 

Instructions: 

1. Include the Registered Separate Account and the Insurance Company in the list or diagram and 
show the relationship of each company to the Registered Separate Account and Insurance 
Company and to the other companies named, using cross-references if a company is controlled 
through direct ownership of its securities by two or more persons. 

2. Indicate with appropriate symbols subsidiaries that file separate financial statements, 
subsidiaries included in consolidated financial statements, or unconsolidated subsidiaries 
included in group financial statements. Indicate for other subsidiaries why financial statements 
are not filed. 

Item 30. Indemnification 

State the general effect of any contract, arrangements, or statute under which any underwriter or 
affiliated person of the Registrant is insured or indemnified against any liability incurred in his or her 
official capacity, other than insurance provided by any underwriter or affiliated person for his or her own 
protection. 

Item 31. Principal Underwriters 

(a) Other Activity. State the name of each investment company (other than the Registered Separate 
Account) for which each principal underwriter currently distributing the Registrant’s securities also 



 

acts as a principal underwriter, Insurance Company, sponsor, or investment adviser. 

(b) Management. Provide the information required by the following table for each director, officer, or 
partner of each principal underwriter named in the response to Item 23: 

(1) 

Name and Principal Business Address 

(2) 

Positions and Offices with Underwriter 

Instruction. If a principal underwriter is the Insurance Company or an affiliate of the Insurance Company, 
and is also an insurance company, the above information for officers or directors need only be provided 
for officers or directors who are engaged directly or indirectly in activities relating to the Registered 
Separate Account or the Contracts, and for executive officers including the Insurance Company’s or its 
affiliate’s president, secretary, treasurer, and vice presidents who have authority to act as president in 
the president’s absence. 

(c) Compensation From the Registrant. Provide the information required by the following table for all 
commissions and other compensation received, directly or indirectly, from the Registrant during the 
Registrant’s last fiscal year by each principal underwriter: 

(1) 

Name of 
Principal 

Underwriter 

(2) 

Net Underwriting 
Discounts 

(3) 

Compensation on 
Redemption 

(4) 

Brokerage 
Commission 

(5) 

Other 
Compensation 

 

Instructions: 

1. Disclose the type of services rendered in consideration for the compensation listed under column 
(5). 

2. Information need not be given about the service of mailing proxies or periodic reports of the 
Registered Separate Account. 

3. Exclude information about bona fide contracts with the Registered Separate Account or the 
Insurance Company for outside legal or auditing services, or bona fide contracts for personal 
employment entered into with the Registered Separate Account or the Insurance Company in the 
ordinary course of business. 

4. Exclude information about any service for which total payments of less than $15,000 were made 
during each of the Registrant’s last three fiscal years. 

5. Exclude information about payments made under any agreement whereby another person 
contracts with the Registered Separate Account or the Insurance Company to perform as 
custodian or administrative or servicing agent. 

Item 31A. Information about Contracts with Index-Linked Options 

For any Contract with Index-Linked Options offered through this registration statement, provide the 
information required by the following table as of December 31 of the prior year:Name of the 
Contract 

Number of 
Contracts 

outstanding 

Total value 
attributable to 

the Index-
Linked Option 

Number of 
Contracts 

sold during 
the prior 
calendar 

year 

Gross 
premiums 
received 

during the 
prior calendar 

year 

Amount of 
Contract value 

redeemed 
during the 

prior calendar 
year 

Combination 
Contract 
(Yes/No) 

       
 

Instructions: 

1. In the case of group Contracts, each participant certificate should be counted as an individual 
Contract. 

2. “Total value attributable to the Index-Linked Option” means the sum of the Contract value in the 
Index-Linked Options of each individual Contract. For “Combination Contracts,” which for 
purposes of this Item are Contracts that offer Variable Options in addition to Index-Linked 
Options, exclude amounts allocated to the Registered Separate Account. 

Item 32. Location of Accounts and Records 

State the name and address of each person maintaining physical possession of each account, book, or 
other document, required to be maintained by the Registered Separate Account pursuant to section 
31(a) of the Investment Company Act [15 U.S.C. 80a-30(a)] and the rules under that section. 

Instruction. The Registered Separate Account may omit this information to the extent it is provided in its 
most recent report on Form N-CEN [17 CFR 274.101]. 

Item 33. Management Services 

Provide a summary of the substantive provisions of any management-related service contract not 
discussed in Part A or Part B, disclosing the parties to the contract and the total amount paid and by 
whom for the Registrant’s last three fiscal years. 

Instructions: 

1. The instructions to Item 21(b) shall also apply to this Item. 

2. Exclude information about any service provided for payments totaling less than $15,000 during 
each of the Registrant’s last three fiscal years. 

Item 34. Fee Representation and Undertakings 

(a) With regard to Variable Options, provide a representation of the Insurance Company that the fees and 
charges deducted under the Contracts, in the aggregate, are reasonable in relation to the services 
rendered, the expenses expected to be incurred, and the risks assumed by the Insurance Company. 

(b) With regard to Index-Linked Options, furnish the following undertakings in substantially the following 
form: 

1. To file, during any period in which offers or sales are being made, a post-effective amendment to 
the registration statement to include any prospectus required by section 10(a)(3) of the Securities 
Act; and 

2. That, for the purpose of determining any liability under the Securities Act, each such post-effective 



 

amendment shall be deemed to be a new registration statement relating to the securities offered 
therein, and the offering of such securities at that time shall be deemed to be the initial bona fide 
offering thereof. 



 

 
 

SIGNATURES 

 
Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, 
the Registrant (certifies that it meets all of the requirements for effectiveness of this registration 
statement under rule 485(b) under the Securities Act and) has duly caused this registration statement 
to be signed on its behalf by the undersigned, duly authorized, in the City of , and State of 
 , on this  day of , . 

 

________________________________________________ 
(Registered Separate Account) 

By  _____________________________________________ 
(Signature) 

________________________________________________ 
(Title) 

________________________________________________ 
(Insurance Company) 

By  _____________________________________________ 
(Name of Officer of Insurance Company) 

________________________________________________ 
(Title) 

 
Instruction: 

 
If the registration statement is being filed only under the Securities Act or under both the Securities 
Act and the Investment Company Act, it should be signed by both the Registered Separate Account 
and the Insurance Company, if applicable. If the registration statement is being filed only under the 
Investment Company Act, it should be signed only by the Registered Separate Account. 

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been 
signed by the following persons in the capacities and on the dates indicated. 

_________________ ________________________________________ ______________ 

Signature Title Date 



 

 
 

Appendix B—Form N-6 

Form N-6 

* * * * * 

Item 30. Exhibits 

* * * * * 

Instructions. 

 * * * 

 3. The Registrant may redact specific provisions or terms of exhibits required to be filed by 

paragraphs (g) and (j) of this Item if the Registrant customarily and actually treats that information as 

private. If it does so, the Registrant should mark the exhibit index to indicate that portions of the 

exhibit have been omitted and include a prominent statement on the first page of the redacted exhibit 

that certain identified information has been excluded from the exhibit because it is both not material 

and the type that the Registrant treats as private or confidential. The Registrant also must include 

brackets indicating where the information is omitted from the filed version of the exhibit.  

If requested by the Commission or its staff, the Registrant must promptly provide on a 

supplemental basis an unredacted copy of the exhibit and its materiality and privacy or confidentiality 

analyses. Upon evaluation of the Registrant’s supplemental materials, the Commission or its staff may 

require the Registrant to amend its filing to include in the exhibit any previously redacted information 

that is not adequately supported by the Registrant’s analyses. The Registrant may request confidential 

treatment of the supplemental material submitted under this Instruction 3 pursuant to rule 83 of the 

Commission’s Organizational Rules [17 CFR 200.83] while it is in the possession of the Commission 

or its staff. After completing its review of the supplemental information, the Commission or its staff 

will return or destroy it, if the Registrant complies with the procedures outlined in rule 418 under the 

Securities Act [17 CFR 230.418]. 

* * * * *  



 

 
 

Appendix C—Form 24F-2 

UNITED STATES 
SECURITIES AND EXCHANGE COMMISSION 

Washington, D.C. 20549 
 

FORM 24F-2 
Annual Notice of Securities Sold 
Pursuant to Rule 24f-2 under the 

Investment Company Act of 
1940 or Rule 456(e) under the 

Securities Act of 1933 
 

Read Instructions at end of this Form before preparing. 

 
1. Name and address of issuer: 

2. The name and EDGAR identifier of each series or class of securities for which this Form is filed.  
If the Form is being filed for all series and classes of securities of the issuer, check the box but do not list series 
or classes:  

3. Investment Company Act File Number: 

Securities Act File Number: 

4(a). Last day of fiscal year for which this Form is filed: 

4(b). Check box if this Form is being filed late (i.e., more than 90 calendar days after the end of  the 
issuer’s fiscal year). (See Instruction A.2) 

 

Note: If the Form is being filed late, interest must be paid on the registration fee due. 

4(c). Check box if this is the last time the issuer will be filing this Form. 



 

 
 

5. Calculation of registration fee (if calculating on a class-by-class or series-by-series basis, provide the EDGAR 
identifier for each such class or series): 

 
(i) Aggregate sale price of securities sold during the 

fiscal year pursuant to section 24(f) or rule 456(e): $ 

(ii) Aggregate price of securities redeemed or 
repurchased during the fiscal year: $   

 

(iii) Aggregate price of securities redeemed or 
repurchased during any prior fiscal year 
ending no earlier than the date the issuer 
became eligible to use this form that were 
not previously used to reduce registration  
fees payable to the Commission: $   

 

(iv) Total available redemption credits [add Items 5(ii) and 5(iii)]: -$ 
 

(v) Net sales -- if Item 5(i) is greater than Item 5(iv) 
[subtract Item 5(iv) from Item 5(i)]: $ 

  
(vi) Redemption credits available for use in future years $ (              )   

— if Item 5(i) is less than Item 5(iv) 
[subtract Item 5(iv) from Item 5(i)]: 

 

(vii) Multiplier for determining registration fee (See x
 Instruction C.9): 

 
(viii) Registration fee due [multiply Item 5(v) by Item =$

 5(vii)] (enter “0” if no fee is due): 
 

6. Interest due -- if this Form is being filed more than 90 days after the end of the issuer’s fiscal 
year (see Instruction D): 

 
+$   

 
 

7. Total of the amount of the registration fee due plus any interest due [line 5(viii) plus line 6]: 

          =$ 

 

 

 

 
 

8. Explanatory Notes (if any): The issuer may provide any information it believes would be helpful in 
understanding the information reported in response to any item of this Form. To the extent responses relate 
to a particular item, provide the item number(s), as applicable.  



 

 
 

SIGNATURES 
 

This report has been signed below by the following persons on behalf of the issuer and in the 
capacities and on the dates indicated. 

 
 

By (Signature and  Title)*   
 
 

 

Date      

 
*Please print the name and title of the signing officer below the 

signature. 



 

 

UNITED STATES 
SECURITIES AND EXCHANGE COMMISSION 

Washington, D.C. 20549 
 

FORM 24F-2 
Annual Notice of Securities Sold 

Pursuant to Rule 24f-2 under 
 the Investment Company Act of 1940 or  

Rule 456(e) under the Securities Act of 1933 
 

INSTRUCTIONS 

 
A. General 

 
1. This Form should be used by an open-end management investment company, closed-end management 
company that makes periodic repurchase offers pursuant to § 270.23c-3(b) of this chapter (an “interval fund”), face 
amount certificate company, or unit investment trust for annual filings required by rule 24f-2 under the Investment 
Company Act of 1940 [15 U.S.C. 80a] (“Investment Company Act”) or an issuer that offers registered index-linked 
annuity securities for annual filings required by rule 456 under the Securities Act of 1933 [15 U.S.C. 77a-aa] 
(“Securities Act”) (each an “issuer”). If the issuer has registered more than one class or series of securities that are 
required to be reported on this form on the same registration statement under the Securities Act, the issuer may file 
a single Form 24F-2 for those classes or series that have the same fiscal year end. Such an issuer may calculate its 
fees based on aggregate net sales of the series having the same fiscal year end. An issuer choosing to calculate 
registration fees on a class-by-class or series-by-series basis should make a single filing consisting of a separate 
Form 24F-2 for each class or series in a single EDGAR document. 

 
2. This Form must be filed within 90 calendar days after the end of the issuer’s fiscal year or, if the last day of the 
90 day period falls on Saturday, Sunday or a Federal holiday, the first business day thereafter. For example, a Form 
24F-2 for a fiscal year ending on June 30 must be filed no later than September 28. If September 28 falls on a Saturday 
or Sunday, the Form must be filed on the following Monday. In these instructions, we refer to this as the “Due Date.” 

 
3. Pursuant to rule 101(a)(1)(iv) of Regulation S-T [17 CFR 232.101(a)(1)(iv)] this Form must be submitted in 
electronic format using the Commission’s Electronic Data Gathering, Analysis, and Retrieval (“EDGAR”) system. 

 
4. This Form must be accompanied by the appropriate registration fee. If the Form is being filed late, interest must 
be paid. See Instruction D. 

 
5. This Form will be deemed filed with the Commission on the date on which it is received and accepted by the 
Commission. The Commission will not accept for filing any Form accompanied by insufficient payment of the 
registration fee. A Form accompanied by insufficient payment of the registration fee will not be deemed accepted 
and filed until receipt by the Commission of proper payment of the registration fee. No part of the registration fee is 
refundable. Issuers should refer to rule 111 of the Securities Act [17 CFR 230.111], rule 0-8 under the Investment 
Company Act [17 CFR 270.0-8], rule 3a of the Commission’s Rules of Informal and Other Procedures [17 CFR 
202.3a], and rule 13(c) under Regulation S-T [17 CFR 232.13(c)] for instructions on payment of fees to the 
Commission. 

 
B. Identifying Information 

 
1. Item 1 - Provide the name of the issuer as it appears on the cover of the issuer’s most recent Securities Act 
registration statement or post-effective amendment. 

 
2. Item 2 - If the Form is being filed for all classes and series of securities of the issuer, the issuer should check 
the box and not list the names of the classes and series. Issuers of registered index-linked annuities should check 
this box if the Form is being filled for all of the issuer’s registered index-linked annuity and classes. 

 
3. Item 3 - If applicable, the Investment Company Act file number should be the number assigned to the issuer’s 
registration statement filed under the Investment Company Act (beginning with “811-”). The Securities Act file 
number is the number of the issuer’s most recent Securities Act registration statement (beginning with “2-”, “33-” or 



 

 
 

“333-”) relating to the securities being reported (e.g., issuers of registered index-linked annuities should use the most 
recent registered index-linked annuity Securities Act registration statement being reported, but not any other 
intervening Securities Act registration statements relating to securities not being reported). 

 
4. Item 4(a) - In the case of an issuer that ceases operations, the date it ceases operations is deemed the last day 
of its fiscal year for purposes of section 24(f) of the Investment Company Act or rule 456(e) of the Securities Act. 

 
5. Item 4(b) - Check the box if the Form is filed late. If the issuer files the Form late, the issuer is required under 
section 24(f) or rule 456(e) to pay interest on unpaid amounts at the rate applicable to Treasury and tax loan 
accounts. See Instruction D. 
 
6. Item 4(c) - Check the box if this is the last time the issuer will be filing Form 24F-2 (i.e., if the issuer has ceased 
operations). 

 
C. Computation of Registration Fee 

 
1. Item 5 is a work sheet for calculating the registration fee due. An issuer must aggregate prices for all classes or 
series for which the Form is being filed. If the issuer charges a front-end sales load on its securities, the aggregate 
sale price must include the sales load. 

 
2. Mergers - 

 
(a) In the case of a liquidation, merger, or sale of all or substantially all of the assets of an issuer (“merger”), the 

securities of the entity ceasing operation (the “Predecessor”) that are exchanged for or converted into the other issuer 
(the “Successor”) should be treated as redemptions on the Predecessor’s final Form 24F-2 (not the Successor’s). 

 
(b) In the case of a merger in which the Predecessor is not deemed to cease operations (e.g., a reorganization), 

the Successor inherits the sales and redemption credits of the Predecessor, and the Successor must report them 
as sales and redemptions on its next Form 24F-2 filing. The Predecessor in this type of merger need not file a final 
Form 24F-2. See Rule 24f-2(b)(1) and (2) [17 CFR 270.24f-2(b)(1) and (2)] and rule 456(e)(4) [17 CFR 
230.456(e)(4)]. 

 
3. Special Rule for Unit Investment Trusts - The aggregate sale price of securities sold to a unit investment trust 
(“UIT”) that offers interests that are registered under the Securities Act and on which a registration fee has been or 
will be paid to the Commission, may be excluded from the aggregate sale price of securities reported in Item 5(i). If 
the issuer chooses to exclude the aggregate sale price of these securities from Item 5(i), the issuer may not use 
securities redeemed or repurchased from those UITs for purposes of determining the redemption or repurchase price 
of securities in Items 5(ii) and 5(iii). 
 
4. Special Rule for Registered Index-Linked Annuities - The aggregate sale price of securities sold during the 
fiscal year in reliance upon registration under rule 456(e) shall include the value of any expiring annuity contract or investment 
option that is rolled over into a new crediting period. The value of such contracts or options should therefore be reported in Item 
5(i). In addition, the value of such expiring annuity contract or options should also be reported in Item 5(ii) as a redemption. Where 
the contract value of the new and expiring annuity contract is the same, the reported amounts attributable to such contracts in Items 
5(i) and 5(ii) would result in a net-zero calculation. 

 
5. Item 5(i) - Report the aggregate sale price of securities sold during the fiscal year in reliance upon registration 
under section 24(f) or rule 456(e). Include securities issued pursuant to dividend reinvestment plans (“DRIP shares”) 
whether or not they are required to be registered under the Securities Act. Do not include the sale price of securities, 
if any, that were registered under the Securities Act other than pursuant to section 24(f) or rule 456(e), as applicable. 
[Example: An interval fund issuer sold 1,000,000 shares, 250,000 of which were registered prior to August 1, 2021. 
Item 5(i) should show the aggregate sale price of 750,000 shares.] 

 
6. Item 5(ii) - Report the aggregate redemption or repurchase price of securities redeemed or repurchased during 
the fiscal year in reliance upon registration under section 24(f) or rule 456(e). Do not include securities that have been 
redeemed or repurchased, if any, other than pursuant to section 24(f) or rule 456(e), as applicable. 

 
7. Item 5(iii) - Report the aggregate redemption or repurchase price of securities redeemed or repurchased during 
any prior fiscal year ending no earlier than the date the issuer became eligible to use this Form (e.g., August 1, 2021 
for interval funds, [EFFECTIVE DATE] for issuers of registered index-linked annuity securities, and October 11, 1995 
for all other filers on this Form) that were not used previously to reduce registration fees payable to the Commission. 



 

 
 

 
8. Items 5(iv) through 5(vi) - Report the sum of Items 5(ii) and 5(iii) in Item 5(iv). Subtract Item 5(iv) from Item 
5(i). If Item 5(iv) is less than Item 5(i), report the result in Item 5(v) (net sales). If Item 5(iv) is greater than Item 5(i), 
report the resulting negative number in parentheses in Item 5(vi) (net redemptions or repurchases). The amount of 
redemptions or repurchases reported in Item 5(vi) may be used by the issuer in future years to offset sales (by 
including it in response to Item 5(iii) of Form 24F-2 filed for the next fiscal year). 

 
 

9. Item 5(vii) - The registration fee is calculated by multiplying the net sales amount (Item 5(v)) by the fee rate. 
For the current fee rate, see https://www.sec.gov/ofm/Article/feeamt.html The fee rate in effect at the time of filing 
applies to all securities sold during the fiscal year, regardless of whether the fee rate changes during the year. 

 
10. Item 5(viii) - If the issuer reports net redemptions or repurchases in Item 5(vi), report “0” in Item 5(viii). 

 
D. Computation of Interest Due if Form is Filed Late 

 
1. Item 6 – Section 24(f) and rule 456(e) require any issuer that pays its registration fee after the Due Date (see 
Instruction A.2) to pay interest to the Commission on fees that are not paid on time. The payment of interest does 
not preclude the Commission from bringing an action to enforce the requirements of section 24(f) or rule 456(e), as 
applicable. Under section 11 of the Debt Collection Act [31 U.S.C. 3717(a)], the interest rate is published by the 
Secretary of the Treasury. The rate is computed annually and is effective on January 1 each year. In some 
circumstances the rate may be changed on a quarterly basis. Filers owing interest should verify the current interest 
rate. Filers can find the rate by looking for the “current value of funds rate” on the Treasury Department’s internet 
site at  https://fiscal.treasury.gov/reports-statements/cvfr/rates.html. 

 
2. The interest is assessed only on the amount of the registration fee due, and begins to accrue on the day after 
the Due Date. The amount of interest due should be calculated based on the interest rate in effect at the time the 
interest payment is made using the following formula: 

 
I = (X) (Y) (Z/365) 

 
where: 

 
I = Amount of interest due 
X = Amount of registration fee due 
Y = Applicable interest rate, expressed as a fraction 
Z = Number of days by which the registration fee payment is late 

 
E. Signature 

 
The Form must be signed on behalf of the issuer by an authorized officer of the issuer. See rule 302 of Regulation S-
T [17 CFR 232.302] regarding signatures on forms filed electronically. 

 
F. SEC’s Collection of Information 

 
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it 
displays a currently valid control number. Filing of this Form is mandatory. The principal purpose of this collection of 
information is to enable issuers to calculate the registration fee payable to the Commission. Any member of the 
public may direct to the Commission any comments concerning the accuracy of the burden estimate of this Form, and 
any suggestions for reducing this burden. This collection of information has been reviewed by the Office of 
Management and Budget in accordance with the clearance requirements of 44 U.S.C. 3507. The responses to the 
collection of information will not be kept confidential. 

  



 

 
 

Appendix D—Retail Investor Feedback Flyer 
 

Tell Us about Your Experiences with Registered Index-Linked Annuities and Other 
Annuity Products 

 
We are requesting input from retail investors regarding registered index-linked annuities 

(or “RILAs”), a type of annuity contract offered by insurance companies. In a RILA, the 

investor’s gains or losses are based on whether a selected index goes up or down over a set 

period of time, such as three years. These annuities also have what is called a “bounded return 

structure,” meaning that they will usually limit your losses when the index goes down, but at the 

cost of limiting your gains when the index goes up. We encourage interested persons to provide 

comments on any or all of the following questions. Please provide your comments on or before 

November 28, 2023 – and thank you for your feedback!  

Part 1: Have you purchased or considered purchasing any kind of annuity, including a 

RILA? If so: 

1. What were your reasons for either purchasing or not purchasing the annuity?  

Text box 

 

 

 

a. What features of the annuity appealed to you? 

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b. What were your investment goals?  



 

 
 

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c. What alternatives did you consider to the annuity, if any?  

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2. Where did you learn about the annuity? Did someone recommend it to you?   

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3. What kind of annuity did you consider purchasing? 

 Yes No 

Fixed annuity [   ] [   ] 

Variable annuity [   ] [   ] 

RILA [   ] [   ] 

Other type of annuity 
(please specify) 
 
 

[   ] [   ] 

 

4. What kind of annuity did you end up purchasing?  



 

 
 

 Yes No 

Fixed annuity [   ] [   ] 

Variable annuity [   ] [   ] 

RILA [   ] [   ] 

Other type of annuity 
(please specify) 
 
 

[   ] [   ] 

 

5. What documents or other materials did you use when considering the purchase?  

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a. Did you find those documents or materials easy or challenging to 

understand?  

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b. Which documents did you find to be more confusing? 

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c. Were the documents or materials at a reading level comfortable for you?  

Yes No 

[   ] [   ] 

 



 

 
 

Text box (please add any explanatory detail) 

 

 

d. Were those documents or materials helpful?  

Yes No 

[   ] [   ] 

 

Text box (please add any explanatory detail) 

 

 

 

e. What, if any, other information do you wish had been available?  

Text box 

 

 

 

f. If the annuity was a RILA, how well do you think that the documents you 

received explained the RILA’s features? 

Text box 

 

 

 



 

 
 

g. If the annuity was a RILA, do you think, based on the documents you 

received, you could explain all of the RILA’s features? 

Yes No 

[   ] [   ] 

 

Text box (please add any explanatory detail) 

 

 

 

Part 2: Have you purchased a RILA? A RILA is a type of annuity contract where the 

investor’s gains or losses are based on whether a selected index goes up or down over a 

set period of time subject to a bounded return structure. If so:   

6. Please describe your experience investing in the RILA. 

a. Has your experience with the RILA been consistent with your 

expectations for the RILA, based on any materials you read (or 

information that a financial professional told you) before purchasing the 

RILA? For example, if you purchased the RILA based on the expectation 

that it was a long-term investment and would allow you to participate to a 

degree in positive market performance while providing some protection 

against loss, was that your experience? Conversely, did you find that you 

ended up having to withdraw money early and lose some of the benefits 

you had anticipated?  

Yes No 



 

 
 

[   ] [   ] 

 

Text box (please add any explanatory detail) 

 

 

 

b. If you have withdrawn money from the RILA, did you pay fees or 

penalties?  

Yes No 

[   ] [   ] 

 

Text box (please add any explanatory detail) 

 

 

 

c. Were you aware when you purchased the RILA that withdrawals would be 

subject to such fees or penalties?  

Yes No 

[   ] [   ] 

 

Text box (please add any explanatory detail) 

 

 



 

 
 

 

Part 3: When you make investment decisions, what type of information do you want?  

7. When you select investments, what information sources do you most commonly 

read?  

 Yes No 

Prospectus [   ] [   ] 

Annual shareholder report [   ] [   ] 

Website of the investment product [   ] [   ] 

Other information source (please explain below) 
 
 

[   ] [   ] 

 

Text box (please add any explanatory detail, including any other information 

source not mentioned above) 

 

 

 

8. Do you prefer to rely on a recommendation from a financial professional?  

Yes No 

[   ] [   ] 

 

a. If you rely on a financial professional, do you also separately research the 

recommended investment?  

Yes No 



 

 
 

[   ] [   ] 

 

9. Do you prefer to receive short summary documents (with more detailed disclosures 

available for additional research)?  

Yes No 

[   ] [   ] 

 

a. If you answered “yes”:  

What do you consider an appropriate length for a summary?  

1-2 pages [   ] 

3-5 pages [   ] 

6-10 pages [   ] 

More than 10 pages [   ] 

 

What topics do you want the summary to include? For example, should the 
summary explain the investment being offered, any fees being charged, 
ways that you may not get the returns described, or the risks of the 
investment? 
 

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If an investment product offers different features you can select (such as 
the type of index it tracks or the time in which the investment lasts), how 
would you like to see the summary organized? For example:  
 



 

 
 

 Yes No 
A summary based on the decisions you will have to make 
when selecting among available features, and the 
implications of selecting various features?  
 

[   ] [   ] 

A summary of each feature of the investment product, to 
allow the reader to identify important information for a 
particular decision?  
 

[   ] [   ] 

Other (please add any explanatory detail) 

 

 

 

 

b. Please share any reasons you may prefer to receive a longer, more detailed 

disclosure document instead of a summary. 

Text box  

 

 

 
 

 

Part 4: Is there anything else you want to tell us about RILAs?  

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** 

Ways to Submit Your Feedback 
 
You can send us feedback in the following ways (include the file number S7-16-23 in your 
response): 
 
Print Your Responses and Mail 
 
Secretary  
Securities and Exchange Commission 
100 F Street, NE 
Washington, Dc 20549-1090 
 
Print Your Responses and Email 
 
Select a PDF printer to create a file you can email to: [email protected] 
 

Do not include personal identifiable information in submissions; you should submit only 

information that you wish to make available publicly. We may redact in part or withhold entirely 

from publication submitted material that is obscene or subject to copyright protection. 

If you are interested in more information on the proposal, or want to provide feedback on 

additional questions, please see the Commission’s proposing release, available at 

https://www.sec.gov/files/rules/proposed/2023/33-11250.pdf. Comments should be received on 

or before November 28, 2023. 

Thank you! 

https://www.sec.gov/files/rules/proposed/2023/33-11250.pdf