Final answer:
Variable annuity contracts and variable life insurance policies are financial instruments that fall under the regulatory scope of the Securities Act of 1933 due to their investment components. These products must adhere to disclosure and transparency requirements overseen by the Securities and Exchange Commission.
Step-by-step explanation:
A variable annuity contract or variable life insurance policy is a financial instrument that combines investment and insurance features.
These products are subject to the requirements of the Securities Act of 1933, which was established to require transparency in the financial statements of publicly traded companies and to prevent fraud in the securities market.
The act mandates that issuers of variable annuities and variable life insurance policies provide detailed information about the investment options and risks associated with these products.
The inclusion of investment components within these insurance products necessitates the oversight of the Securities and Exchange Commission (SEC), which was formed as a direct result of the Securities Act and subsequent legislation.
The SEC's role is to regulate the investment industry and ensure compliance with federal securities laws, including those relating to variable insurance products.