CLEAR Forms Act
- Sponsor
- Rep. Nunn, Zachary [R-IA-3]
- Committees
- Financial Services Committee (primary)
- Last action
- Sep 16, 2026
Bottom line
The CLEAR Forms Act aims to standardize and simplify SEC registration for complex non-variable insurance products, potentially increasing their availability and clarity for consumers.
What it actually does
This bill requires the Securities and Exchange Commission (SEC) to create new, specialized registration forms for certain non-variable insurance products, specifically Registered Index-Linked Life Insurance (RILU), Contingent Deferred Annuities (CDA), and other registered non-variable insurance contracts. The goal is to streamline the registration process for these products while ensuring purchasers receive clear, necessary information, including investor testing for CDAs.
Proponents argue
Supporters argue that current SEC registration forms are not well-suited for these complex, non-variable insurance products, leading to unnecessary burdens for issuers and potentially confusing disclosures for consumers. Creating tailored forms will streamline compliance for insurance companies, encourage product innovation, and provide clearer, more understandable information to purchasers, ultimately benefiting both the industry and consumers seeking these financial tools.
Opponents contend
Critics might argue that creating new, specialized forms could inadvertently lead to less rigorous oversight or create loopholes compared to existing, more general securities registration requirements. They might also contend that the SEC already has the authority to adapt existing forms or issue guidance, and a legislative mandate could prematurely lock in a framework before the full implications are understood, potentially compromising investor protection.
The bill is short and relatively straightforward for anyone familiar with financial regulation, making it accessible for a quick review.
Section 2, adding Section 6A(b)(1) to the Securities Act of 1933
SEC Mandate for Specialized Registration Forms
This provision requires the SEC to develop and finalize new or amended registration forms specifically for "covered insurance contracts" within 30 months of the bill's enactment. These contracts include Registered Index-Linked Life Insurance (RILU), Contingent Deferred Annuities (CDA), and other non-variable insurance contracts that are considered securities.
Supporters argue
Supporters argue this mandate is crucial because existing SEC forms are ill-suited for these complex insurance products, leading to inefficiencies. New, tailored forms will simplify the registration process for issuers and ensure more relevant disclosures for consumers.
Critics contend
Critics might argue that the SEC already possesses the flexibility to adapt existing forms or provide guidance without a specific legislative mandate, and this could be seen as an unnecessary legislative intrusion into the agency's rulemaking discretion.
Tradeoffs
The tension lies between providing specific legislative direction to address perceived regulatory gaps and allowing the SEC full autonomy to determine the most effective regulatory approach for evolving financial products.
Section 2, adding Section 6A(b)(2) to the Securities Act of 1933
Purchaser-Focused Form Design and Investor Testing
This provision directs the SEC to design the new forms to ensure purchasers receive necessary information to make informed decisions. It specifies considering factors like information availability, purchaser sophistication, disclosure length, and product complexity. Crucially, it mandates investor testing for Contingent Deferred Annuities (CDAs) to ensure key information is understandable.
Section 2(b) of the bill
Contingency for SEC Rulemaking Delays
This provision acts as a fallback: if the SEC fails to finalize the new registration rules within 30 months, issuers of RILU and CDA products will be permitted to register these contracts using existing forms (specifically, 17 CFR 239.17b and 239.17c). This interim measure would terminate once the SEC's new rules are finalized.
This provision directs the SEC to ensure the overall regulatory and filing framework for these new forms is consistent with existing forms (17 CFR 239.17b and 239.17c). This includes maintaining the availability of summary prospectuses, annual registration fees based on net sales, and automatic effectiveness for post-effective amendments.
Section 2, adding Section 6A(b)(5) to the Securities Act of 1933
Why it matters:This is standard legislative practice to ensure new regulations integrate smoothly with existing frameworks and avoid unintended disruptions to established processes. It's a technical detail that is crucial for operational efficiency.
Case for: Proponents argue that ensuring consistency with existing rules for similar products (like variable annuities) is vital for operational efficiency for insurance companies, allowing them to manage all their registered insurance offerings under a coherent system. This reduces compliance costs and complexity.
Case against: No specific opposition is typically raised against ensuring regulatory consistency and efficiency, provided it does not compromise investor protection.
Estimated impact: This provision will significantly impact the operational efficiency and compliance costs for insurance companies, potentially saving them substantial resources by avoiding redundant or conflicting regulatory processes.