Variable annuity prospectuses contain too much information, and the Author contends that usually the reader gives up using them to make buying decisions. This Article discusses the challenge of writing effective variable annuity prospectus disclosures that will drive more informed decision-making by unidentified consumers who span a diverse range relating to financial literacy. The Article also examines how a lack of uniformity in industry jargon hampers consumer comprehension. Communication within the financial industry has gravitated toward design-based disclosure rather than solution-based disclosure, adding further confusion.

By utilizing literacy studies conducted by the Office of Investor Education and Advocacy and continued collaboration between the financial industry and its regulators, the financial industry can better understand the financial literacy of its intended audience and determine how to teach consumers what they need to know. The Author contends that while other industries have identified how to empower consumers with the working knowledge needed to make informed decisions, the financial industry has not done so. Plain English disclosures will help improve suitability and drive more informed decision-making. The Author recommends improving the Form N-4 (variable annuity registration statement). Additionally, the National Association of Insurance Commissioners and the Financial Industry Regulatory Authority find that sales agents benefit from completing both basic annuity training as well as each product issuer’s training. Further, the Author proposes that the use of technology will improve consumer decision-making. This technology includes interactive text and video interspersed prospectuses on handheld devices.