Supporting Statement_Form N-4_RILA

OMB Control Number 3235-0318
SUPPORTING STATEMENT
For the Paperwork Reduction Act Information Collection Submission for
FORM N-4
A.

JUSTIFICATION
1.

Necessity for the Information Collection

Form N-4 (17 CFR 239.17b and 274.11c) is the form used by insurance company
separate accounts organized as unit investment trusts that offer variable annuity contracts
to register as investment companies under the Investment Company Act of 1940 (15
U.S.C. 80a-1 et seq.) (“Investment Company Act”) and/or to register their securities
under the Securities Act of 1933 (15 U.S.C. 77a et seq.) (“Securities Act”). Section 5 of
the Securities Act (15 U.S.C. 77e) requires the filing of a registration statement prior to
the offer of securities to the public and that the registration statement be effective before
any securities are sold, and Section 8 of the Investment Company Act (15 U.S.C. 80a-8)
provides for the registration of investment companies. Pursuant to Form N-4, separate
accounts organized as unit investment trusts that offer variable annuity contracts provide
investors with a prospectus and a statement of additional information (“SAI”) covering
essential information about a separate account. Section 5(b) of the Securities Act requires
that investors be provided with a prospectus containing the information required in a
registration statement prior to the sale, or at the time of confirmation or delivery, of the
securities.
The Commission recently adopted final amendments to extend the registration,
filing, and disclosure approach for RILAs to annuity contracts that offer fixed investment
options and apply market-value adjustments (“MVAs”) to amounts withdrawn from a
fixed option before the end of the fixed option’s term, where the offering is required to be

registered with the Commission because of the MVA (“registered MVA annuities” and,
collectively with RILAs, “non-variable annuities” or “non-variable annuity contracts”). 1
Under the final amendments, non-variable annuities would register offerings on
Form N-4, as amended to address the features and risks of non-variable annuities.
Further, the Commission is proposing other amendments to Form N-4 that would apply to
all issuers that use that form. For example, the Commission is proposing to switch the
order of the Key Information Table (“KIT”) and Overview of the Contract items, require
issuers to present information in the KIT in a Q&A format, and to require more specific
principal risk disclosures.
2.

Purpose and Use of the Information Collection

The purpose of Form N-4 is to meet the filing and disclosure requirements of the
Securities Act and the Investment Company Act and to enable filers to provide investors
with information necessary to evaluate an investment in a security. This information
collection differs significantly from many other federal information collections, which
are primarily for the use and benefit of the collecting agency. The information required to
be filed with the Commission permits verification of compliance with securities law
requirements and assures the public availability and dissemination of the information.
3.

Consideration Given to Information Technology

Registration for Index-Linked Annuities and Registered Market Value Adjustment Annuities;
Amendments to Form N-4 for Index-Linked Annuities, Registered Market Value Adjustment Annuities,
and Variable Annuities; Other Technical Amendments, Investment Company Act Release No. 35273 (July
1, 2024), available at https://www.sec.gov/rules-regulations/2024/07/rila#33-11294final (“Adopting
Release”). The final amendments did not alter the requirement that issuers of variable annuity contracts
must register their offerings on Form N-4. Updated Disclosure Requirements and Summary Prospectus for
Variable Annuity and Variable Life Insurance Contracts, Investment Company Act Release No. 33814
(Mar. 11, 2020) [85 FR 25964 (May 1, 2020)] (“VASP Adopting Release”).
1

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The Commission’s Electronic Data Gathering, Analysis and Retrieval
(“EDGAR”) system automates the filing, processing, and dissemination of full disclosure
filings. This automation has increased the speed, accuracy, and availability of
information, generating benefits to investors and financial markets. Form N-4 is required
to be filed with the Commission electronically on EDGAR. 2 The public may access
filings on EDGAR through the Commission’s website (http://www.sec.gov) or at
EDGAR terminals located at the Commission’s public reference rooms. The final
amendments to Form N-4 require insurers to disclose, for each index-linked option,
current limits on index losses and gains (along with a statement that the current limit will
not change during an index-linked option’s crediting period) by posting the information
to a website that is publicly accessible, free of charge, and specifically incorporating this
information by reference into the prospectus. 3
4.

Duplication

The Commission periodically evaluates rule-based reporting and recordkeeping
requirements for duplication, and reevaluates them whenever it proposes a rule or a
change in a rule. The requirements of Form N-4 generally are not duplicated elsewhere.
5.

Effect on Small Entities

The Commission reviews all rules periodically, as required by the Regulatory
Flexibility Act, 4 to identify methods to minimize recordkeeping or reporting
requirements affecting small businesses. The proposed disclosure requirements for

2
3
4

17 CFR 232.101(a)(1)(i) and (iv).
See Adopting Release at Section II.C.4.a.
5 U.S.C. 601 et seq.

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registration statements on Form N-4 do not distinguish between small entities and other
registrants. The burden on smaller registrants of preparing and filing registration
statements may be proportionately greater than for larger registrants. This burden
includes the cost of producing, printing, filing, and disseminating prospectuses and SAIs.
The Commission believes, however, that imposing different requirements on smaller
entities would not be consistent with investor protection and the purposes of registration
statements.
Furthermore, based on a review of EDGAR filings of existing non-variable
annuity issuers, the Commission does not expect any non-variable annuity issuers to be
treated as small entities. Additionally, non-variable annuity issuers are not investment
companies. For these reasons, we believe that the final amendments, as adopted, would
not have a significant economic impact on a substantial number of small entities.
The Commission staff reviews all rules periodically, as required by the
Regulatory Flexibility Act, to identify methods to minimize reporting or recordkeeping
requirements affecting small businesses.

6.

Consequences of Not Conducting Collection

The purpose of Form N-4 is to meet the filing and disclosure requirements of the
Securities Act and the Investment Company Act and to enable filers to provide investors
with information necessary to evaluate an investment in a security. Less frequent filing
would be inconsistent with the filing and disclosure requirements of the Securities Act
and the Investment Company Act. In addition, if the form were to be filed less frequently,
investors may not be provided with the information necessary to evaluate an investment

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in a security. The Commission adopted the final amendments governing the registration
of non-variable annuities pursuant to a statutory mandate. 5
7.

Inconsistencies with Guidelines in 5 CFR 1320.5(d)(2)

This collection is not inconsistent with 5 CFR 1320.5(d)(2).
8.

Consultation Outside the Agency

Before adopting the final amendments to Form N-4, the Commission solicited and
evaluated public comments on the proposal and its collection of information
requirements. Specifically, the public was given the opportunity to comment on the
Commission’s estimates for the burden of Form N-4 as proposed and as compared to the
existing approved burden inventory in the proposing release for the amendments. 6 The
Commission did not receive any comments regarding the PRA estimates for Form N-4. In
addition, the Commission and staff of the Division of Investment Management participate
in an ongoing dialogue with representatives of the investment company and insurance
industry through public conferences, meetings, and informal exchanges. These various
forums provide the Commission and staff with a means of ascertaining and acting upon
paperwork burdens confronting the industry. The Commission’s solicitation of public
comments included estimating and requesting public comments on the burden estimates
for all information collections under this OMB control number (i.e., both changes
associated with the rulemaking and other burden updates).

In 2022, Congress enacted Division AA, Title I of the Consolidated Appropriations Act, 2023
(“RILA Act”), directing the Commission to adopt a new registration form for RILAs within 18 months of
enactment. See Pub. L. 117-328; 136 Stat. 4459 (Dec. 29, 2022).
6
See Registration for Index-Linked Annuities; Amendments to Form N-4 for Index-Linked and
Variable Annuities, Investment Company Act Release No. 35028 (Sept. 29, 2023) (“Proposing Release”),
available at https://www.sec.gov/files/rules/proposed/2023/33-11250.pdf.
5

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9.

Payment or Gift

Not Applicable.
10.

Confidentiality

Not Applicable.
11.

Sensitive Questions

No information of a sensitive nature, including social security numbers, will be
required under this collection of information. The information collection collects basic
Personally Identifiable Information (PII) that may include names, job titles, and work
addresses. However, the agency has determined that the information collection does not
constitute a system of record for purposes of the Privacy Act. Information is not retrieved
by a personal identifier. In accordance with Section 208 of the E-Government Act of
2002, the agency has conducted a Privacy Impact Assessment (“PIA”) of the EDGAR
system, in connection with this collection of information. The EDGAR PIA, published on
March 22, 2023, is provided as a supplemental document and is also available at
https://www.sec.gov/privacy.
12.

Estimate of Hour and Cost Burden of Information Collection

The following estimates of average burden hours and costs are made solely for
purposes of the Paperwork Reduction Act of 1995 7 and are not derived from a
comprehensive or even representative survey or study of the cost of Commission rules
and forms.
In our most recent previous Paperwork Reduction Act submission for Form N-4,
we estimated for Form N-4 a total aggregate annual hour burden of 292,487 hours, and a
7

44 U.S.C. 3501 et seq.

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total aggregate annual external cost burden of $33,348,866. 8 Compliance with the
disclosure requirements of Form N-4 is mandatory, and the responses to the disclosure
requirements will not be kept confidential.
As mentioned above, we adopted amendments that require not only issuers of
variable annuities and RILAs to register these annuity products on Form N-4, but also
require issuers of registered MVA annuities to register offerings of these annuities on
Form N-4. Accordingly, our final information collection estimates reflect these additional
registrants as well as updated data since the proposal. Specifically, our final information
collection estimates reflect that the number of entities and responses have been modified
from the estimates made in connection with the proposal to include issuers of registered
MVA annuities, and also to reflect that the estimated number of post-effective
amendments filed by issuers of variable annuities have declined from January 1, 2021 to
December 31, 2023. The respondents to these collections of information would be nonvariable annuity issuers and registered variable annuity separate accounts. We estimate
that there will be 1,235 annual responses that will be subject to collection of information
requirements under the final amendments to Form N-4, which is a decrease of 131 annual
responses from the previous estimate of 1,366. The table below summarizes our PRA
initial and ongoing annual burden estimates associated with the proposed amendments to
Form N-4.

On October 26, 2021, the Office of Management and Budget approved without change a revision
of the currently approved information collection estimate for Form N-4.

8

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TABLE 1: FORM N-4 INITIAL FILINGS – PRA ESTIMATES
FINAL ESTIMATED BURDENS
Internal initial
burden hours
Final Amendments to Form

N-43

300

Internal annual
burden hours1

$420
(blended rate for compliance
attorney and senior
programmer)5

3803

Estimated number of annual
responses6
Total estimated annual new burden

Wage rate2

Internal time
cost

Annual external
cost burden
$40,0006

$159,600

x 101

x 101

x 101

38,380

$16,119,600

$4,040,000

Final Total Burdens
Responses

Internal Hour
Estimate

Internal Hour
Cost Estimate

Current aggregate annual burden
estimates

30

8,427

$2,494,716

Aggregate additional annual burden
estimate78

+71

+29,953

+$13,624,884

Revised aggregate annual burden
estimates

=101

=38,380

=$16,119,600

External Cost
Estimate
$754,740
+$3,285,260
=$4,040,000

Notes:
1. This estimate includes the initial burden estimates annualized over a three-year period, plus the estimate of ongoing annual burden hours.
2. The Commission’s estimates of the relevant wage rates are based on the SIFMA Wage Report. The estimated wage figures are modified by Commission
staff to account for an 1,800-hour work-year and multiplied by 5.35 to account for bonuses, firm size, employee benefits, overhead, and adjusted to account
for the effects of inflation.
3. This estimated burden applies to an issuer of any annuity registered on Form N-4.
4. The final estimate includes the initial burden estimates annualized over a three-year period (300 hours / 3 = 100 hours), plus 280 hours of ongoing
annual burden hours (the estimate of ongoing internal hours associated with post-effective amendments (which will be filed in the year following an initial
registration statement), as referenced in Table 13 infra). The final amendments will permit issuers of RILA contracts to incorporate information about current
contract limits on gains by reference into their prospectuses from a website. See Item final Form N-4, Item 6. Because this incorporation by reference
approach is permitted but not required, burdens associated with this permissible website disclosure are reflected in the burden estimate for the final
amendments to Form N-4. For purposes of this information collection, we estimate that 100% of issuers of RILAs would incur burdens associated with
website disclosure.
5. The $420 wage rate reflects current estimates of the blended hourly rate for an in-house compliance attorney ($440) and a senior programmer ($399).
$420 is based on the following calculation: ($440 + $399)/2 = $420 rounded to the nearest whole dollar.
6. We estimate that the external cost to prepare and file an initial registration statement on Form N-4 is $40,000 per filing. This estimate is based on the
currently approved external cost estimate for Form N-4 filings, adjusted to reflect staff experience of the costs associated with drafting and filing a
registration statement on Form N-4, such as the cost of outside legal services.
7. The estimate of the annual number of registration statements filed on Form N-4 is based on the average annual number of annuity filings (variable
annuity, RILA, and registered MVA annuities) received by the Commission over the past three years (Jan. 1, 2021 to Dec. 31, 2023) on Forms N-4, S-1, and
S-3. In its most recently approved PRA submission, the Commission estimated that insurance companies that issue variable annuities will make
approximately 30 initial registration statement filings per year. For the estimated burden of the amendments to Form N-4, we have taken into account
updated data regarding the number of initial annuity filings on Forms N-4, S-1 and S-3.
8. The estimated number of new responses, 71 responses, is based on the total of the number of responses under the final amendments, 101 responses,
less 30 responses which represents the number of responses for registered separate accounts under the current aggregate annual burden estimate.
Similarly, the estimated additional internal hours figure reflects the total estimated annual new burden (38,380 hours) and subtracts the current internal
hour estimate (8,427 hours) to avoid double counting the current burden that is applicable to registered separate accounts; the estimated additional
internal hour cost figure reflects the total estimated annual new internal hour cost estimate ($16,119,600) and subtracts the current internal hour cost
estimate ($2,494,716) to avoid double counting current internal hour cost applicable to registered separate accounts; and the estimated additional external
cost figure reflects the total estimated annual new external cost ($4,040,000) and subtracts the current external cost estimate ($754,740) to avoid double
counting current external costs applicable to registered separate accounts.

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TABLE 2: FORM N-4 POST-EFFECTIVE AMENDMENT FILINGS – PRA
ESTIMATES
FINAL ESTIMATED BURDENS
Internal initial
burden hours
Final Amendments to Form N-42

210

Internal annual
burden hours

Wage rate1

28023

$420
(blended rate for compliance
attorney and senior
programmer)4

Internal time
costs

Annual external
cost burden
$24,0005

$117,600

Estimated number of annual responses5

x 1,164

x 1,164

x 1,164

Total new annual burden

325,920

$136,886,400

$27,936,000
External Cost
Estimate

FINAL TOTAL BURDENS
Responses

Internal Hour
Estimate

Internal Hour
Estimate

Current aggregate annual burden
estimates

1,366

284,060

$84,100,454

Aggregate additional annual burden
estimates6

-202

+41,860

+$52,785,946

=1,164

=325,920

=$136,886,400

Revised aggregate annual burden
estimates

$32,594,126

$-4,658,126
=$27,936,000

Notes:
1. The Commission’s estimates of the relevant wage rates are based on the SIFMA Wage Report. The estimated wage figures are modified by Commission
staff to account for an 1,800-hour work-year and multiplied by 5.35 to account for bonuses, firm size, employee benefits, overhead, and adjusted to account
for the effects of inflation.
2. This estimated burden applies to an issuer of any annuity registered on Form N-4.
3. The final estimate includes the initial burden estimates annualized over a three-year period, plus 208 hours of ongoing annual burden hours ((210 hours /3
= 70 hours ) + 208 hours = 278 hours (rounded up to 280 hours)). The ongoing annual burden is estimated to be equal to the currently approved ongoing
annual burden for initial filings on Form N-4 plus an addition 2 hours of ongoing annual burden hours. The final amendments will permit issuers of RILA
contracts to incorporate information about current contract limits on gains by reference into their prospectuses from their website. See final Form N-4, Item 6.
Because this incorporation by reference approach is permitted but not required, burdens associated with this permissible website disclosure requirement are
reflected in the burden estimate for the final amendments to Form N-4. For purposes of this information collection, we estimate that 100% of issuers of RILAs
would incur burdens associated with website disclosure.
4. The $420 wage rate reflects current estimates of the blended hourly rate for an in-house compliance attorney ($440) and a senior programmer ($399).
$420 is based on the following calculation: ($440 + $399)/2 = $420 rounded to the nearest whole dollar.
5. We estimate that the external cost to prepare and file a post-effective registration statement on Form N-4 is approximately $24,000 per filing.
6. The estimate of the average annual number of post-effective amendments to annuity filings (variable annuity, RILA, and registered MVA annuities) received
by the Commission over the past three years (Jan. 1, 2021 to Dec. 31, 2023) on Forms N-4, S-1, and S-3. In its most recently approved PRA submission, the
Commission estimated that insurance companies that issue variable annuities will make approximately 1,336 post-effective amendments per year. For the
estimated burden of the amendments to Form N-4, we have taken into account updated data regarding the number of post-effective amendments for
annuities on Forms N-4, S-1 and S-3. The estimate of annual the annual number of post-effective amendments to annuity filings reflects that the average
number of post-effective amendments filed by separate account registrants with the Commission has declined over the past three years. See infra note 6.
7. The aggregate final additional annual burden estimate reflects that the average number of post-effective amendments over the past three years (Jan. 1,
2021 to Dec. 31, 2023) by separate account registrants (1,088) has declined from the current aggregate annual burden estimate (1,366). The aggregate
additional burden estimate takes 1,088 (the average number of post-effective amendments over the past three years by separate account registrant) and
deducts 1,366 (the current aggregate burden estimate) which equals -278 and then adds 75 (the average number of post-effective amendments filed by
insurance companies that issue RILA and registered MVA contracts over the past three years) which equals -202, as adjusted for rounding. Similarly, the
estimated additional internal hours figure reflects the total estimated annual new burden (325,920) and subtracts the current internal hour estimate
(284,060) to avoid double counting the current burden that is applicable to registered separate accounts; the estimated additional internal hour cost figure
reflects the total estimated annual new internal hour cost estimate ($137,061,000) and subtracts the current internal hour cost estimate ($84,100,454) to
avoid double counting current internal hour cost applicable to registered separate accounts; and the estimated additional external cost figure reflects the total
estimated annual new external cost ($27,936,000) and subtracts the current external cost estimate ($32,594,126) to avoid double counting current external
costs applicable to registered separate accounts.

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TABLE 3: FORM N-4 TOTAL BURDEN – PRA ESTIMATES
Responses

Internal annual burden
hours1

Internal time costs2

Annual external cost
burden

Final Estimates
Current aggregate annual burden
estimates

1,366

Aggregate final additional annual
burden estimates

-1313

Revised aggregate annual burden
hours

1,235

292,487

$86,595,170

$33,348,866

71,8134

$66,410,8305

$-1,372,8866

364,300

$153,006,000

$31,975,980

Notes:
1. This estimate includes the initial burden estimates annualized over a three-year period.
2. This estimate is based on the Commission’s estimates of relevant wage rates based on the SIFMA Wage Report. The estimated wage figures are
modified by Commission staff to account for an 1,800-hour work-year and multiplied by 5.35 to account for bonuses, firm size, employee benefits,
overhead, and adjusted to account for the effects of inflation. The particular wage rates that were considered are discussed in Table 12 and Table 13
above.
3. The aggregate final additional annual burden estimates reflect that the average number of post-effective amendments over the past three years (Jan.
1, 2021 to Dec. 31, 2023) by separate account registrants (1,088) has declined from the current aggregate annual burden estimate (1,366). The
aggregate final additional annual burden estimate for responses adds 71 (the aggregate annual additional burden estimate for initial registration
statements) and -202 (the aggregate annual additional burden estimate for post-effective amendments) = -131.
4. The aggregate final additional annual burden estimate for the internal annual burden hours adds 29,953 (the aggregate annual additional burden
estimate for initial registration statements) and 41,860 (the aggregate annual additional burden estimate for post-effective amendments) = 71,813.
5. The aggregate final additional annual burden estimate for internal time costs adds $13,624,884 (the aggregate annual additional burden estimate
for initial registration statements) and $52,785,946 (the aggregate annual additional burden estimate for post-effective amendments) = $66,410,830.
6. The aggregate final additional annual burden estimate for the annual external cost burden adds $3,285,260 (the aggregate annual additional burden
estimate for initial registration statements) and $-4,658,126 (the aggregate annual additional burden estimate for post-effective amendments) = $ 1,372,886.

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We estimate that there are 38 insurance companies that issue RILAs, registered
MVA annuities, or annuity contracts offering index-linked options and MVA options,
and that there are 416 separate account registrants on current Form N-4 that would be
impacted by the proposed amendments. 9
The hour burden estimates for preparing and filing Form N-4 are based on the
Commission’s experience with the contents of the form. The number of burden hours
may vary depending on, among other things, the complexity of the filing and whether
preparation of the forms is performed by internal staff or outside counsel.
Form N-4 imposes two types of reporting burdens on separate accounts organized
as unit investment trusts that offer variable annuity contracts that are registered under the
Investment Company Act: (1) the burden of preparing and filing the initial registration
statement; and (2) the burden of preparing and filing post-effective amendments to a
previously effective registration statement.
As summarized in Table 3 above, in our most recent Paperwork Reduction Act
submission for Form N-4, Commission staff estimated that the annual compliance burden
to comply with the collection of information requirements of Form N-4 is 292,487 hours,
with an internal cost of about $86.6 million. As summarized in Table 3 above, we
estimate that the total internal burden associated with amended Form N-4 will be 364,300
hours per year, at a cost of about $153 million.

For non-variable annuity registrants, this estimate is based on a review of non-variable annuity
registration statements filed with the Commission as of May 2024. For separate account registrants, this
amount is based on Form N-CEN reports through Dec. 31, 2023.
9

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13.

Cost to Respondents

Cost burden is the cost of goods and services purchased to prepare and update
registration statements on Form N-4, such as for the services of independent auditors and
outside counsel. The cost burden does not include the hour burden discussed in Item 12
above. Estimates are based on the Commission’s experience with the filing of registration
forms.
As summarized in Table 3 above, in our most recent Paperwork Reduction Act
submission for Form N-4, Commission staff estimated about $33.3 million in external
cost burden per year. We estimate that the revised external burden will be about $31.9
million.
14.

Cost to the Federal Government

The annual cost of reviewing and processing disclosure documents, including new
registration statements, post-effective amendments, proxy statements, and shareholder
reports of investment companies amounted to approximately $33 million in fiscal year
2023, based on the Commission’s computation of the value of staff time devoted to this
activity and related overhead.
15.

Changes in Burden

The estimated hourly burden associated with Form N-4 has increased from
292,487 hours to 364,300 hours (an increase of 71,813 hours). In addition, the cost
burden associated with Form N-4 has decreased from $33,348,866 to $31,975,980 (a
decrease of $1,372,886). These estimates are based on an analysis of the number of
filings over the past three years, resulting in the expectation that the number of filings

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will decrease (due to fewer expected post-effective amendments) but that the hourly
burden will increase (due to more anticipated initial filings) along with an increase in
internal time costs (which are expected to increase due higher wage rates resulting from
inflation). The amendments proposed by the Commission would result in a change in our
estimate of the burdens associated with the collection of information, specifically to
account for the impact of inflation on wages, the additional requirements for issuers that
use Form N-4 currently and to add non-variable annuities to the estimates.
These changes in burden also reflect the Commission’s revision and update of
burden estimates for all information collections under this OMB control number (whether
or not associated with rulemaking changes), and the Commission requested public
comment on all information collection burden estimates for this OMB control number.
16.

Information Collection Planned for Statistical Purposes

Not Applicable.
17.

Approval to Omit OMB Expiration Date

The Commission is not seeking approval to omit the expiration date for OMB
approval.
18.

Exceptions to Certification Statement for Paperwork Reduction Act
Submission

The Commission is not seeking an exception to the certification statement.
B.

COLLECTION OF INFORMATION EMPLOYING STATISTICAL METHODS

The collection of information will not employ statistical methods.

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