Support for CLEAR Forms Act to Improve Insurance and Annuity Registration

Two prominent insurance associations have voiced their support for a Congressional bill addressing registration issues for specific insurance and annuity products. The Insured Retirement Institute (IRI) and the American Council of Life Insurers (ACLI) endorsed the Consumer-Led Enhancement of Annuity and Insurance Registration (CLEAR) Forms Act in letters during a House Financial Services Subcommittee hearing. This proposed legislation seeks to enhance consumer-oriented registration and disclosure processes, building upon the bipartisan Registration for Index-Linked Annuities (RILA) Act of 2022.

The CLEAR Forms Act intends to extend consumer-focused principles to various insurance products regulated by the Securities and Exchange Commission (SEC). IRI and ACLI emphasized that the current framework necessitates innovative insurance products to undergo registration meant for corporate securities, often introducing irrelevant corporate information that may obscure product details such as features, risks, and benefits. Such requirements impose considerable costs and operational challenges, hindering insurers from entering the market and stifling innovation.

The proposed legislation mandates the SEC to formulate registration forms tailored for products like registered index-linked life insurance and contingent deferred annuities. It stresses the utility of consumer-focused disclosure frameworks, supported by consumer testing and plain-language principles to ensure clarity. Furthermore, the CLEAR Forms Act is perceived as a stride towards standardizing SEC registration requirements across various insurance products, thereby facilitating comparable disclosures for consumers and simplifying the regulatory landscape for insurers.