consumer sells, replaces, surrenders or annuitizes the
annuity, mortality and expense fees, investment advisory
fees, potential charges for and features of riders,
limitations on interest returns, insurance and investment
components and market risk.
(3) The consumer would benefit from certain features of
the annuity, including tax-deferred growth, annuitization or
death or living benefit.
(4) The particular annuity as a whole, the underlying
subaccounts to which funds are allocated at the time of
purchase or replacement of the annuity, and riders and
similar product enhancements, if any, are suitable and, in
the case of a replacement, the transaction as a whole is
suitable for the consumer based on the consumer's suitability
information.
(5) In the case of a replacement of an annuity, the
replacement is suitable and shall take into consideration
whether:
(i) The consumer will incur a surrender charge, be
subject to the commencement of a new surrender period,
lose existing benefits, including death, living or other
contractual benefits, or be subject to increased fees,
investment advisory fees or charges for riders and
similar product enhancements.
(ii) The consumer would benefit from product
enhancements and improvements.
(iii) The consumer has had another annuity
replacement, including a replacement within the preceding
36 months.
(b) Consumer information.--Prior to the execution of a
purchase or [exchange] replacement of an annuity resulting from
a recommendation, an insurance producer, or an insurer where no
insurance producer is involved, shall make reasonable efforts to
obtain [information concerning all of the following:
(1) The consumer's financial status.
(2) The consumer's tax status.
(3) The consumer's investment objectives.
(4) Other information used or considered to be
reasonable by the insurance producer, or the insurer where no
insurance producer is involved, in making recommendations to
the consumer.] the consumer's suitability information.
(b.1) Reasonable basis.--Except as permitted under
subsection (c), an insurer may not issue an annuity recommended
to a consumer unless there is a reasonable basis to believe the
annuity is suitable based on the consumer's suitability
information.
(c) Obligation limits.--
(1) [Neither] Except as provided under paragraph (2),
neither an insurance producer nor an insurer where no
insurance producer is involved shall have any obligation to a
consumer under subsection (a) or (b.1) related to any
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