Before closing its legislative session on May 2nd, both of Florida’s legislative chambers unanimously approved Senate Bill 2082 (“SB 2082” or the “Bill”) addressing suitability in annuity sales. The Bill is based on the NAIC Suitability in Annuity Transactions Model Regulation, as amended in 2006, which requires that life insurance companies ensure that their annuity products are marketed and sold to suitable parties. Among other things, SB 2082:
· Requires persons selling life insurance to complete a continuing education course on suitability in annuity and life insurance transactions;
· Provides administrative fines and criminal penalties for engaging in misleading representations, fraudulent comparisons or omissions, or the use of fraudulent signatures;
· Incorporates direct or indirect purchases made for the purpose of earning fees or commissions into the offense of “churning;”
· Increases the time allowed for unconditional refunds on annuity products;
· Requires that agents obtain financial information from senior consumers prior to executing sales or exchanges of annuity products;
· Requires agents to perform and document a suitability analysis; and
· Requires agents to provide consumers with information about surrender changes and tax consequences.
The Bill is awaiting signature by the Governor. To view a copy of the Bill, click here.
