SEC Propose XBRL for Insurance Disclosures
This week the Securities and Exchange Commission (SEC) published a rule proposal on “Updated Disclosure Requirements and Summary Prospectus for Variable Annuity and Variable Life Insurance Contracts” that would require the use of Inline XBRL.
The proposed amendments are intended to “harness technology to allow investors, data aggregators, financial analysts, Commission staff, and other data users to efficiently analyse and compare the available information about variable insurance contracts”.
Anyone that has purchased complex insurance products knows that understanding whether specific proposals represent value for money, compared to other products in the market can be a challenge. Kudos then, to the US regulator which is proposing enhanced transparency around a range of information including fees and expenses, risks, restrictions, taxes, and conflicts of interest.
The proposal is part of the SEC’s on-going efforts to implement reporting reforms that utilise technology to modernise investment company reporting, allowing market participants to better assess and evaluate different products.
Comments are due by February 19, 2019. XBRL US, through the XBRL US Communication Steering Committee, will likely submit a comment letter responding to this rule proposal. From an XBRL International perspective, we heartily endorse this move in the United States and encourage other jurisdictions to consider the benefits of similar approaches.
Read the proposal here.