Equitable Financial Life Insurance Company (“Equitable”) recently entered into a settlement with the Securities and Exchange Commission (“SEC”) relating to the presentation of account statements for certain clients invested in EQUI-VEST® variable annuity products. The settlement relates to how EQUI-VEST® quarterly account statements described certain daily charges. As part of our settlement with the SEC, Equitable has enhanced the description of charges, fees and expenses in EQUI-VEST® quarterly account statements. Equitable also has agreed to distribute a special payment to current and former clients who invested in an EQUI-VEST® contract between January 1, 2016 and July 18, 2022. Importantly, detailed disclosure of all charges, fees and expenses has always been provided in EQUI-VEST® prospectuses. Further, the sums and calculations reflected in the Net Investment Portfolio Results and Total Account Value on EQUI-VEST® account statements are accurate and always have been.
To review the SEC’s Order related to this matter, you may access the document here.
Can you provide additional background on this matter?
- Equitable has reached an agreement with the Securities and Exchange Commission (“SEC”) to settle an investigation concerning the presentation of charges and expenses in EQUI-VEST® quarterly account statements.
- Clients who invest in EQUI-VEST® variable annuities incur daily Separate Account Charges and Portfolio Operating Expenses, which are incorporated in the calculation of their Net Investment Portfolio Results. These charges and expenses are described in detail in your EQUI-VEST® prospectus. The SEC determined, however, that Equitable did not properly present or reference those same charges in the quarterly account statements received by EQUI-VEST® customers.
- As part of our agreement with the SEC, we have enhanced the description of the charges in the EQUI-VEST® client account statements in two ways, which you will see on your upcoming statements:
- First, we are adding a cross-reference to the prospectus and a link to access it on our website, along with a reminder to refer to your EQUI-VEST® contract and your prospectus for a description of all charges and expenses applicable to your EQUI-VEST® contract.
- Second, the line item that used to appear as “Fees and Expenses” on your account statements will now appear as “Administrative/Transaction Charges” to more specifically describe the charges included in this line item. We are making similar revisions elsewhere in the account statements and adding a “Description of Terms” section to help you understand the charges applicable to your EQUI-VEST® contract.
Does this mean there will be new fees associated with my account?
- No. You will not pay any new fees as a result of the settlement. Full disclosure of all charges, fees and expenses has always been detailed in your prospectus.
- This matter solely concerned how we presented certain fees in EQUI-VEST® account statements. The Separate Account and Portfolio Operating expenses that were the subject of the SEC’s investigation are explained in detail in the prospectus.
Was I overcharged fees?
- No, you were never overcharged fees. All fees that you paid were correct and in accordance with the terms of your agreement with Equitable.
If I wasn't overcharged, why am I getting money?
- As part of the agreement, the SEC is requiring Equitable to pay a monetary penalty and has elected not to deposit that penalty into the U.S. Treasury but instead to distribute that money to clients and former clients who invested in EQUI-VEST® contracts between January 1, 2016 and July 18, 2022, which is referred to as the “Relevant Period.”
- Each distribution will be calculated based on the duration of your investment in your contract during the Relevant Period and your account value during the Relevant Period.
My contract terminated some time ago, why/how does this impact me?
- As part of the agreement, the SEC is requiring Equitable to pay a monetary penalty and has elected to distribute that money to both current and former clients who invested in EQUI-VEST® contracts between January 1, 2016 and July 18, 2022, which is referred to as the “Relevant Period.”
- If you were invested in an EQUI-VEST® contract during the Relevant Period, you will be included in the distribution, even if your EQUI-VEST® contract has been terminated, unless the payment to which you would be entitled is less than $10.00, in which case you will not receive a payment.
If I'm eligible for a special payment, how much will I receive?
- That will depend on the results of the calculation methodology as applied to your account. Until the calculation has been completed for all accounts and the special payments are ready for distribution, we will not know the specific amount that any individual eligible customer will receive.
- The amount of the special payment will be determined and distributed to both current and former clients who invested in EQUI-VEST contracts between January 1, 2016 and July 18, 2022 according to the requirements of Equitable’s settlement with the SEC. The calculation will be based on the duration of your investment in your contract during the Relevant Period and your account value during the Relevant Period.