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What is the SEC Form N-4?

SEC Form N-4 is a filing with the Security and Exchange Commission (SEC) which must be filed by any insurance company in separate accounts organized as an FCP offering variable annuity contracts. SEC Form N-4 is required under the Securities Act of 1933 and the Investment Companies Act 1940 and aims to provide investors with information about variable annuity contracts so that they can determine whether they wish to invest in them.

Key points to remember

  • SEC Form N-4 is submitted by insurance companies offering variable annuities.
  • SEC Form N-4 is intended to help investors determine whether to invest in certain contracts.
  • Each part of the SEC Form N-4 must contain the required information.

Understanding the SEC Form N-4

Part A of SEC Form N-4, the prospectus, should contain clearly written information about the investment that the average investor, who may not have a specialized background in finance or law, can understand. Part A contains a general description of the registrant and a general description of variable annuity contracts as well as information on accumulation unit values, deductions, annuity term, death benefit, purchases and contract value, surrenders, taxes and legal proceedings.

Part B provides additional information which does not necessarily have to be in the prospectus, but which may be useful to some investors, such as general information and background, underwriters and calculation of performance data.

Finally, Part C contains the financial statements and supporting documents, the directors and officers of the filer, the number of policyholders and other required information.

The main purpose of Form N-4 is regulatory in nature. While many official reports can help financial analysts gather useful information that can be used in the stock-picking process, much of the content on Form N-4 is technical and necessary for legal and supervisory purposes. Being a highly regulated industry, insurance entities often have to file numerous documents to maintain their good reputation in the eyes of regulators and policy makers.

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