[Pages S7003-S7004]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




              REGISTRATION FOR INDEX-LINKED ANNUITIES ACT

  Ms. HASSAN. Madam President, I ask unanimous consent that the 
Committee on Banking, Housing, and Urban Affairs be discharged from 
further consideration of S. 3198 and that the Senate proceed to its 
immediate consideration.
  The PRESIDING OFFICER. The clerk will report the bill by title.

[[Page S7004]]

  The senior assistant legislative clerk read as follows:

       A bill (S. 3198) to direct the Securities and Exchange 
     Commission to revise any rules necessary to enable issuers of 
     index-linked annuities to register on a form tailored 
     specifically to registered index-linked annuities, and for 
     other purposes.

  There being no objection, the committee was discharged, and the 
Senate proceeded to consider the bill.
  Ms. HASSAN. I ask unanimous consent that the Smith-Tillis substitute 
amendment, which is at the desk, be considered and agreed to; that the 
bill, as amended, be considered read a third time and passed, and the 
motion to reconsider be considered made and laid upon the table.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment (No. 6506), in the nature of a substitute, was agreed 
to, as follows:

                (Purpose: In the nature of a substitute)

        Strike all after the enacting clause and insert the 
     following:

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Registration for Index-
     Linked Annuities Act''.

     SEC. 2. PARITY FOR REGISTERED INDEX-LINKED ANNUITIES 
                   REGARDING REGISTRATION RULES.

       (a) Definitions.--In this section:
       (1) Commission.--The term ``Commission'' means the 
     Securities and Exchange Commission.
       (2) Investment company.--The term ``investment company'' 
     has the meaning given the term in section 3 of the Investment 
     Company Act of 1940 (15 U.S.C. 80a-3).
       (3) Market value adjustment.--The term ``market value 
     adjustment'' means, with respect to a registered index-linked 
     annuity, after an early withdrawal or contract 
     discontinuance--
       (A) an adjustment to the value of that annuity based on 
     calculations using a predetermined formula; or
       (B) a change in interest rates (or other factor, as 
     determined by the Commission) that apply to that annuity.
       (4) Purchaser.--The term ``purchaser'' means a purchaser of 
     a registered index-linked annuity.
       (5) Registered index-linked annuity.--The term ``registered 
     index-linked annuity'' means an annuity--
       (A) that is deemed to be a security;
       (B) that is registered with the Commission in accordance 
     with section 5 of the Securities Act of 1933 (15 U.S.C. 77e);
       (C) that is issued by an insurance company that is subject 
     to the supervision of--
       (i) the insurance commissioner or bank commissioner of any 
     State; or
       (ii) any agency or officer performing like functions as a 
     commissioner described in clause (i);
       (D) that is not issued by an investment company; and
       (E) the returns of which--
       (i) are based on the performance of a specified benchmark 
     index or rate (or a registered exchange traded fund that 
     seeks to track the performance of a specified benchmark index 
     or rate); and
       (ii) may be subject to a market value adjustment if amounts 
     are withdrawn before the end of the period during which that 
     market value adjustment applies.
       (6) Security.--The term ``security'' has the meaning given 
     the term in section 2(a) of the Securities Act of 1933 (15 
     U.S.C. 77b(a)).
       (b) Rules.--
       (1) In general.--Not later than 180 days after the date of 
     enactment of this Act, the Commission shall propose, and, not 
     later than 18 months after the date of enactment of this Act, 
     the Commission shall prepare and finalize, new or amended 
     rules, as appropriate, to establish a new form in accordance 
     with paragraph (2) on which an issuer of a registered index-
     linked annuity may register that registered index-linked 
     annuity, subject to conditions the Commission determines 
     appropriate, which may include requiring the issuer to take 
     the steps described in section 240.12h-7(e) of title 17, Code 
     of Federal Regulations, or any successor regulation, with 
     respect to the registered index-linked annuity.
       (2) Design of form.--In developing the form required to be 
     established under paragraph (1), the Commission shall--
       (A) design the form to ensure that a purchaser using the 
     form receives the information necessary to make knowledgeable 
     decisions, taking into account--
       (i) the availability of information;
       (ii) the knowledge and sophistication of that class of 
     purchasers;
       (iii) the complexity of the registered index-linked 
     annuity; and
       (iv) any other factor the Commission determines 
     appropriate;
       (B) engage in investor testing; and
       (C) incorporate the results of the testing required under 
     subparagraph (B) in the design of the form, with the goal of 
     ensuring that key information is conveyed in terms that a 
     purchaser is able to understand.
       (c) Treatment if Rules Not Prepared and Finalized in a 
     Timely Manner.--
       (1) In general.--If, as of the date that is 18 months after 
     the date of enactment of this Act, the Commission has failed 
     to prepare and finalize the rules required under subsection 
     (b)(1), any registered index-linked annuity may be registered 
     on the form described in section 239.17b of title 17, Code of 
     Federal Regulations, or any successor regulation.
       (2) Preparation.--A registration described in paragraph (1) 
     shall be prepared pursuant to applicable provisions of the 
     form described in that paragraph.
       (3) Termination.--This subsection shall terminate upon the 
     establishment by the Commission of the form described in 
     subsection (b).
       (d) Rules of Construction.--Nothing in this section may be 
     construed to--
       (1) limit the authority of the Commission to--
       (A) determine the information to be requested in the form 
     described in subsection (b); or
       (B) extend the eligibility for the form described in 
     subsection (b) to a product that is similar to, but is not, a 
     registered index-linked annuity; or
       (2) preempt any State law, regulation, rule, or order.

  The bill (S. 3198), as amended, was ordered to be engrossed for a 
third reading, was read the third time, and passed.

                          ____________________