Monday, August 4, 2008
FINRA has put out for public comment proposed changes to guidelines on illustrations of tax-deferred versus taxable compounding in advertising and sales literature (NASD Interpretive Material 2210-1) and communications with the public about variable life insurance and variable annuities (NASD Interpretive Material 2210-2). The proposal would:
shorten and simplify existing provisions regarding product identification, liquidity and guarantee claims;
consolidate previous FINRA staff guidance concerning variable insurance product communications;
address changes in variable insurance products and the manner in which they are advertised, particularly with regard to riders, hypothetical illustrations and investment analysis tools; and
codify FINRA staff guidance concerning comparative illustrations of the mathematical principle of tax-deferred versus taxable compounding.