WASHINGTON, D.C. – Today, U.S. Senator Tina Smith (D-MN) announced her bipartisan legislation with Senator Thom Tillis (R-NC) to help provide transparency for consumers looking to purchase popular, long-term savings vehicles has passed the Senate. The bill would help ensure that investors considering purchasing Registered Index Linked Annuities (RILAs) get clear and direct information that promotes investor understanding.
“It’s more important than ever for consumers to have clear and concise information about their investments,” said Smith. “This legislation would help consumers looking to purchase RILAs by providing clear information about their potential investments in terms that they are able to understand. I hope this legislation will offer a model for how disclosures can and should be designed with consumers in mind. I look forward to working with my colleagues in the House to help get this bill across the finish line and signed into law.”
“This commonsense legislation will create a new form for index-linked annuities through the SEC, which will ensure the buyer has all the necessary information when making a decision,” said Tillis. “This legislation is a necessary step for transparency, and I am proud to work on this bipartisan legislation with my colleagues.”
The sale of RILAs, which are tax-deferred, long-term investments often used for retirement, have grown rapidly in recent years. However, the lack of a tailored form for registering these products with the Securities and Exchange Commission (SEC) often results in long, dense disclosures that are incomprehensible to the typical purchaser.
The Registration for Index-Linked Annuities Act offers a model for how disclosures can be designed with the needs of investors in mind. By directing the SEC to develop a tailored RILA registration form, the bill would help ensure that investors have the information they need to determine whether the product makes sense for their financial goals.
The bill is endorsed by the Consumer Federation of America.