IRI Law Journal - April 2019

Posted on April 26, 2019

Featured Publications
Vedder Price: Practice Pointer: Informal Guidance from the SEC Staff Regarding Rule 30e-3’s Transition Period Requirements for Variable Insurance Products
The staff of the Securities and Exchange Commission (SEC) informally provided Vedder Price with key interpretive guidance clarifying the transition period disclosure requirements for issuers of variable insurance products that wish to rely on new Rule 30e-3 under the Investment Company Act of 1940, as amended. Rule 30e-3 was adopted by the SEC in June 2018 and creates an optional “notice and access” method for delivering shareholder reports for underlying funds in which the separate account invests. The SEC staff’s guidance clarifies these Transition Period disclosure obligations for variable insurance products.
Dechert: SEC Issues Proposed Rule Permitting Variable Annuity and Variable Life Insurance Contracts to Use Layered Disclosure
The U.S. Securities and Exchange Commission announced on October 30, 2018 that it had voted to issue a proposed rule and form amendments that would allow insurers offering variable annuity and/or variable life insurance contracts (collectively, variable contracts) to use layered disclosure to satisfy prospectus delivery obligations under the Securities Act of 1933.
Drinker Biddle & Reath: Thoughts on GLB Safeguards Rule and Privacy Rule? FTC Awaits Your Comments
The Federal Trade Commission (FTC) issued two Notices of Proposed Rulemaking (NPRMs) seeking comment on proposed amendments to the Gramm–Leach–Bliley Act (GLBA)Safeguards Rule and Privacy Rule. The comments are due 60 days after the NPRM is published in the Federal Register. The NPRMs accomplish two things. First, they address comments received several years ago when the FTC sought review of these rules pursuant to its periodic review of FTC rules and guides. Second, it proposes to amend both rules and seeks comments on those amendments.
Eversheds Sutherland: 2018 in Review – DOL Guidance under ERISA

The ERISA guidance issued in 2018 by the Department of Labor (DOL) generally extended the ongoing trend of the DOL issuing limited advance guidance. The DOL issued one Advisory Opinion, two Field Assistance Bulletins, and nine individual exemptions from the ERISA prohibited transaction rules. In a departure from past practice, the DOL did not authorize any otherwise prohibited transactions under its Expedited Exemption Procedure (ExPro), for the first time since the 1997 launch of that program.  It’s likely that this limited guidance program will continue in 2019, as the DOL will be working on guidance addressing the Fifth Circuit’s vacatur of the expanded fiduciary definition and related exemptions. 

Eversheds Sutherland: FINRA Variable Annuity Trends – 2018 Year End

The Financial Industry Regulatory Authority (FINRA) continues to prioritize enforcement actions related to variable annuities (VAs), particularly focusing on exchanges and multi-share class VAs.  In 2018, FINRA settled 28 VA cases through Letters of Acceptance, Waiver, and Consent (AWCs) and filed three complaints related to VAs.  This review of FINRA’s VA enforcement cases identifies 2018 enforcement trends, including exchanges, multi-share class VAs, restitution, and representative training.


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