4-hour Annuity Best Interest Training

Instructor

UIE

Phone

(253) 846-1155

Email

mail@uiece.com

This course follows the Suitability in Annuity Transactions Model Regulations outline developed by the National Association of Insurance Commissions (NAIC). The model regulations require insurers to become responsible for ensuring that annuity sales are suitable based on specified criteria. It requires insurance producers to be trained on annuities in general and certainly on the specific products they sell. Where feasible and logical, suitability standards for annuities are consistent with the suitability standards imposed by the Financial Industry Regulatory Authority, known as FINRA.

This course provides annuity product training regarding traditional fixed-rate annuities; equity-indexed fixed annuities, and variable annuities. Variable annuities are required to meet FINRA suitability rules; sales in compliance with FINRA rules would comply with the NAIC suitability regulations.

This course provides information that is reasonably appropriate to determine the suitability of a producer’s annuity recommendation, such as age, tax position, income, individual financial situation, time horizon, and objectives. Furthermore, it covers the duties of insurers and insurance producers. Prior to recommending an annuity product, of any kind, producers and insurers are required to make reasonable efforts to obtain the consumer’s suitability information. This course covers all the steps in doing so. Since annuities are often intended to provide income during the buyer’s retirement years, it is important that agents understand their ethical and professional duties when recommending these products.

Course Schedule

Chapter	Subject	Description
Chapter 1	Under the NAIC Model training it states: Section 7. Producer Training	A. A producer shall not solicit the sale of an annuity product unless the producer has adequate knowledge of the product to recommend the annuity and the producer is in compliance with the insurer’s standards for product training. A producer may rely on insurer-provided product-specific training standards and materials to comply with this subsection. B. (1) (a) A producer who engages in the sale of annuity products shall complete a one-time four (4) credit training course approved by the department of insurance and provided by the department of insurance-approved education providers. (b) Producers who hold a life insurance line of authority on the effective date of this regulation and who desire to sell annuities shall complete the requirements of this subsection within six (6) months after the effective date of this regulation. Individuals who obtain a life insurance line of authority on or after the effective date of this regulation may not engage in the sale of annuities until the annuity training course required under this subsection has been completed. Some states have adopted the code below since so many agents have completed the previous one-time requirement. Here is the example from Iowa’s code as they were the first to adopt it.

Chapter

Subject

Description

Chapter 1

Under the NAIC Model training it states:

Section 7. Producer Training

A. A producer shall not solicit the sale of an annuity product unless the producer has adequate knowledge of the product to recommend the annuity and the producer is in compliance with the insurer’s standards for product training. A producer may rely on insurer-provided product-specific training standards and materials to comply with this subsection.

B. (1) (a) A producer who engages in the sale of annuity products shall complete a one-time four (4) credit training course approved by the department of insurance and provided by the department of insurance-approved education providers.

(b) Producers who hold a life insurance line of authority on the effective date of this regulation and who desire to sell annuities shall complete the requirements of this subsection within six (6) months after the effective date of this regulation. Individuals who obtain a life insurance line of authority on or after the effective date of this regulation may not engage in the sale of annuities until the annuity training course required under this subsection has been completed.

Some states have adopted the code below since so many agents have completed the previous one-time requirement. Here is the example from Iowa’s code as they were the first to adopt it.

Additional Information

ClearCert Approved.

Mandatory Training Requirements—Annuity Best Interest

Effective, October 1, 2022, the Wisconsin Best Interest Law (2021 Wis. Act 260) requires an insurance intermediary to complete an updated training that includes the best interest standard. The new law requires that when recommending the sale of an annuity, insurance intermediaries act in the best interest of the consumer and not place their own financial interests ahead of those of a consumer.

Intermediaries that completed an approved annuity suitability training course prior to October 1, 2022, must complete either a one-time, 4-hour annuity training best interest course or a one-time, 1-hour refresher annuity training best interest course within six months of the effective date of the Act. The course must be approved under the course group of Annuity Training—Best Interest. The deadline for intermediaries to complete this training is April 1, 2023.

Individuals newly licensed with the life authority after October 1, 2022 must complete a 4-hour annuity training best interest course and the insurer-specific annuity product training before soliciting the sale of any annuity product. The training is required for both resident and nonresident intermediaries and it applies to both individual and group annuity sales.

An intermediary who satisfies the training requirement of another state that is substantially similar to Wisconsin's law will be deemed compliant with Wisconsin's requirement. The course must include, but need not be limited to:

· The types of annuities and various classifications of annuities.

· Identification of the parties to an annuity.

· How product-specific annuity contract features affect consumers.

· The application of income taxation of qualified and non-qualified annuities.

· The primary uses of annuities.

· Appropriate sales practices and replacement and disclosure requirements.

Insurer Responsibility

Each insurer must verify that the intermediary has completed the required training. Insurers are also required to establish standards for intermediary product training and to provide product-specific training and training material that explains the company's annuity product to its intermediaries prior to soliciting the company's product.

For more information, please refer to s. 628.347 (4m), Wis. Stat.

https://oci.wi.gov/Pages/Agents/ContinuingEducation.aspx#Annuity