Should Variable Annuities Contain Additional Disclosures?

by Wall Street Fraud on July 19, 2012

Stock broker fraud attorneyVariable annuities are definitely on the radar of the Securities and Exchange Commission. During her recent remarks at an industry conference, Susan Nash, the Associate Director of the SEC’s Division of Investment Management, made it clear that annuity disclosures would be a regulatory priority for the agency going forward.

Nash raised concerns that current variable annuity disclosures do not always provide timely information in a form that investors can understand, particularly when it comes to investment risks. As she noted in her speech, variable annuity disclosures should provide the information that investors need at the time when they need it and in a manner that is usable and understandable.

She further outlined the components of effective variable annuity disclosures:

  • Effective disclosure should provide information to contract purchasers that helps them make an informed purchase decision;
  • Effective disclosure should provide information to existing contract owners that helps them understand how their investment has performed and how it has changed, and that helps them to make ongoing investment decisions such as whether to invest additional amounts in a contract;
  • Effective disclosure should provide information that is understandable;
  • Effective disclosure should provide information that is available 24/7;
  • Effective disclosure should provide investors with access to the types and amount of information that is useful to them;
  • Effective disclosure should provide information that is readily accessible and usable, and that offers a convenient gateway to related, more detailed information; and
  • Effective disclosure should make appropriate use of available communication tools and technologies. Few could have predicted just a few years ago today’s wide use of tablet computers and e-readers. In this rapidly changing high-tech world, effective disclosure will make use of the communications methods that investors prefer in ways that enhance — and do not obscure — information delivery.

As securities fraud attorneys, this is good news. We are hopeful that the SEC will take these recommendations into consideration when adopting new disclosure rules.

If you have been the victim of annuity fraud, we may be able to help you recover your losses. Contact us today at 215-839-3953 for a free consultation.

At Wall Street Fraud, we are dedicated to offering assistance to those who have been hurt by improper corporate or investment practices.

If you have been the victim of stock brokerage fraud, securities fraud, mutual fund fraud, stockbroker fraud, annuities fraud, or any other type of investment fraud or negligence, please contact our securities fraud attorneys today for a free case evaluation. Our talented and aggressive legal and professional staff is eager to help you recover your losses.

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