This bill requires the Department of the Treasury, within five years of the enactment of this bill, to modify its regulations relating to Income Tax; Diversification Requirements for Variable Annuity, Endowment, and Life Insurance Contracts to facilitate the use of exchange-traded funds as investment options under certain variable contracts. An exchange-traded fund means a regulated investment company, partnership, or trust (1) that is registered with the Securities and Exchange Commission as an open-end investment company or a unit investment trust, (2) the shares of which can be directly purchased or redeemed only by an authorized participant (i.e., a financial institution that is a member or participant of a registered clearing agency), and (3) the shares of which are traded throughout the day on a national stock exchange at market prices that may or may not be the same as the net asset value of the shares.