The Insured Retirement Institute is applauding the confirmation from Securities and Exchange Commission Chairman Mary Schapiro that her staff is developing a variable annuity summary prospectus. IRI has long called for—and officially petitioned—the SEC to develop such a document to advance the interests of the investing public, and to reduce the burden placed on its members, which includes insurers, to produce lengthy documents that consumers traditionally ignore because of their complexity.
In a speech during the Consumer Federation of America’s 21st Annual Financial Services Conference in Washington, Schapiro said SEC staff is “developing a simplified summary prospectus for variable annuities, which are widely regarded as one of the most difficult-to-understand products on the market. It is precisely in this type of product where simplicity of disclosure is essential,” she said. “At the end of the day, our investor in that Main Street office just wants to know the facts, so he is not taken advantage of by hidden fees or questionable motivations. And he needs this information when it is most meaningful—at the time he is making his investment decision.”