Statement on RILAs and Registered MVA Annuities

Today, the Commission adopted amendments to provide a tailored form to register the offerings of registered index-linked annuities ("RILAs") and registered market value adjustment annuities ("registered MVA annuities"). I am pleased to support this adoption because it fulfills the congressional mandate to adopt a registration form specific to RILAs.

RILAs are a complex product sold primarily to retail investors. While they're generally linked to the performance of a market index, such as the S&P 500, their performance is not the same as the underlying index. Rather, investor returns often are subject to caps and floors set by the insurance company. Further, features such as these caps and floors may change over time, and investors can experience losses if they withdraw money early.

The market for these complex products has grown significantly in recent years. Sales of RILAs reached approximately $47.4 billion in 2023 alone, more than quintupling since 2017[1] It is important that investors receive the information they need-in plain English-to make informed investment decisions.

Implementing Congress's mandate, today's rule will require RILAs to use Form N-4, the same registration form currently used for variable annuities. Thus, today's final rule also amends Form N-4 to address the features and risks of RILAs.

Today's rule also will apply to registered MVA annuities. Similar to the amendments we are adopting for RILAs, these amendments will benefit investors by providing a tailored disclosure regime and permitting investors to compare and contrast different types of annuity contracts.

These changes will streamline the registration process for issuers already using Form N-4 for other investment products. Further, this would make disclosures among similar investment products more consistent. This adopted disclosure regime is informed by investor testing conducted by the SEC's Office of the Investor Advocate (OIAD).

Finally, today's rule will provide both RILA and MVA issuers guidance on when sales literature related to their offerings might be materially misleading under the Federal securities laws. In particular, today's rule will require RILA issuers to comply with Rule 156, which addresses truth in advertising in sales literature.

Taken together, these amendments will improve the disclosure process for these complex products to benefit investors.

I'd like to thank members of the SEC staff for their work on this proposal, including:

• Natasha Greiner, Sarah ten Siethoff, Brian Johnson, Amanda Hollander Wagner, Brad Gude, Christian Corkery, Pamela Ellis, Rachael Hoffman, Michael Khalil, James Maclean, Amy Miller, Laura Harper Powell, Andrea Ottomanelli Magovern, Michael Kosoff, Elisabeth Bentzinger, Sonny Oh, Jenson Wayne, and Nicolina McCarthy in the Division of Investment Management;
• Felicia Kung, Todd Hardiman, Sean Harrison, Andrew Schoeffler, Adam Turk, and Ingram Weber in the Division of Corporation Finance;
• Shehzad (Shaz) Niazi, Chauncey Martin, Erin Nelson, and Steven Kenney in the Office of the Chief Accountant;
• Jessica Wachter, Alexander Schiller, Ross Askanazi, Dan Deli, Lauren Moore, Ricardo Lopez Rago, Samantha Croffie, Julie Marlowe, and Parhaum Hamidi in the Division of Economic and Risk Analysis;
• Megan Barbero, Elise Bruntel, Meridith Mitchell, Natalie Shioji, Monica Lilly, and Joseph Guerra in the Office of the General Counsel;
• Cristina Martin Firvida, Brian Scholl, Marc Sharma, John Foley, Katherine Carman, Alycia Chin, Jonathan Cook, and David Zimmerman in the Office of the Investor Advocate;
• Owen Donley and Jill Felker in the Office of Investor Education and Advocacy; and
• Daniel Chang in the EDGAR Business Office.

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