Overview
Title
Submission for OMB Review; Comment Request
Agencies
ELI5 AI
The SEC is asking for permission to keep track of a rule that lets life insurance companies use special accounts for certain products, even though they haven’t used a specific form since 2008. They want to know if people think it's still important to keep this rule.
Summary AI
The Securities and Exchange Commission (SEC) has submitted a request to the Office of Management and Budget (OMB) to extend the previously approved collection of information under Rule 6e-2 and Form N-6EI-1 as part of the Paperwork Reduction Act of 1995. This rule allows life insurance companies to use separate accounts to fund specific variable life insurance products, offering exemptions from certain provisions of the Investment Company Act of 1940 under defined conditions. Since 2008, no Form N-6EI-1 filings have occurred; hence, there has been no burden or cost to the industry. The SEC is maintaining one burden hour for inventory purposes and invites public comment on this information collection within 30 days of the notice's publication.
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AnalysisAI
The document is a notice from the Securities and Exchange Commission (SEC) requesting an extension for the collection of specific information under Rule 6e-2 and Form N-6EI-1. This request is made in accordance with the Paperwork Reduction Act of 1995. Rule 6e-2 specifically allows life insurance companies to use separate accounts for funding certain variable life insurance products, which grants them exemptions from certain provisions of the Investment Company Act of 1940, provided specific conditions are met.
General Summary
The SEC is essentially seeking the continuation of a rule that allows life insurance companies certain regulatory exemptions if they comply with certain conditions laid out in Rule 6e-2. Since 2008, there haven't been any filings of the necessary Form N-6EI-1, and as a result, the industry has not faced any costs or burdens associated with it. The SEC aims to retain a record of one burden hour for administrative tracking purposes and invites public comments on this matter.
Significant Issues and Concerns
One significant issue is the absence of submissions since 2008, which raises questions about the necessity of retaining this information collection process. The SEC's decision to maintain an administrative burden of one hour despite no filings might suggest that certain record-keeping may be potentially redundant. Moreover, there's a lack of clarity on why there have been no filings for such a long period, leaving one to wonder if the rule meets current industry needs.
The language used in the document presents another concern. The rule's terms and the specific conditions for exemption can be complex, likely posing a challenge for those unfamiliar with legal or financial terminology. Simplification of this language could make the document more accessible to the general public and stakeholders.
Public Impact
For the general public, the document mainly serves to inform about regulatory processes and ensures that exemptions for certain insurance products adhere to required conditions. This transparency is crucial for maintaining trust in financial regulations.
The maintenance of regulatory exemptions might reassure consumers that variable life insurance products are managed under specific protective guidelines. However, the lack of clarity about the absence of filings could lead to misconceptions about industry compliance.
Stakeholder Impact
For life insurance companies, the continuance of Rule 6e-2 ensures the possibility of regulatory flexibility. They potentially benefit from reduced regulatory burdens, provided they meet the necessary conditions. Yet, the absence of filings could indicate procedural inefficiencies or a lack of utility of the exemptions offered under this rule.
Regulatory agencies might find the maintenance of the rule crucial to ensure administrative preparedness if industry interest in separate accounts suddenly surges. However, the absence of filings since 2008 might signal a need to re-evaluate the rule's relevance or effectiveness in today's financial environment.
In conclusion, while the extension of information collection serves administrative needs, it raises questions about the practical utility and relevance of these exemptions in the current market. Greater exploration into why filings have ceased and whether the current regulatory framework remains beneficial could provide a clearer picture.
Issues
• The document states that since 2008 there have been no filings of Form N-6EI-1 by separate accounts, yet the Commission requests authorization to maintain an inventory of one burden hour for administrative purposes. This may indicate potential unnecessary record-keeping that might not be needed if there are no filings.
• The language regarding the specific exemptions and requirements under Rule 6e-2, and its conditions, may be complex and difficult for someone not familiar with legal or financial jargon to understand. Simplifying this language could improve clarity.
• There is no explanation for why there have been no filings of Form N-6EI-1 by separate accounts since 2008, which could affect the justification for the continuation of the rule and its exemptions.
• The document does not specify the potential impacts or consequences if separate accounts do start filing Form N-6EI-1, especially in terms of administrative burden or regulatory adjustments.
• There is a lack of discussion about whether the absence of Form N-6EI-1 filings presents an issue or if the rule's requirements are still relevant given market changes since 2008.