Bill Summary

• Enacts suitability standards requiring insurance producers and insurers to have reasonable grounds that annuity recommendations are suitable based on consumer's financial situation, suitability information, and tangible net benefit to the consumer.

• Requires insurance producers to complete a one-time four-credit annuity training course approved by the commissioner before selling annuities, with existing producers having until June 1, 2014 to comply.

• Mandates insurers establish supervision systems including producer training standards, pre-issuance suitability reviews with elevated review for consumers 65+, and annual reports on system effectiveness to senior management.

• Imposes special restrictions on annuity replacements for consumers 65+ by prohibiting recommendations that require surrender charges unless the replacement provides substantial financial benefit that a reasonable person would believe is necessary.

• Requires insurers and producers to maintain suitability information records for ten years and permits the commissioner to order corrective action, including transaction cancellation, for violations of the suitability requirements.