CA AB689

Requires insurance producers and insurers to have reasonable grounds that recommended annuities are suitable for consumers based on their financial situation, needs, age, income, risk tolerance, and other suitability information.

Mandates that insurance producers complete an eight-credit-hour annuity training course approved by the Insurance Commissioner before selling annuities, plus four continuing education credits every two years.

Requires insurers to establish supervision systems to monitor recommendations, conduct pre-issuance reviews, maintain procedures to detect unsuitable recommendations, and provide annual reports to senior management on supervision effectiveness.

Prohibits insurance producers and insurers from recommending annuity replacements to consumers age 65 and older that require surrender charges unless the purchase provides a substantial financial benefit over the life of the policy.

Deems annuity sales by FINRA broker-dealers that comply with FINRA Rule 2330 suitability and supervision requirements as satisfying the bill's requirements, provided suitability criteria include the consumer's income and intended use of the annuity.