69B-162.011: Suitability and Disclosure in Annuity Contracts-Forms Required.
PURPOSE AND EFFECT: The proposed rule implements Section 627.4554, Florida Statutes, by adopting an Annuity Suitability form and a Disclosure and Comparison of Annuity Contracts form for use in sales of annuities to senior consumers.
SUMMARY: The proposed rule adopts an Annuity Suitability form and a Disclosure and Comparison form to be used when an insurance agent sells an annuity to a senior consumer. The proposed forms may be found at http://www.myfloridacfo.com/Agents/Industry/Laws-Rules/SeniorAnnuityRule_Jan09.htm.
SUMMARY OF STATEMENT OF ESTIMATED REGULATORY COSTS: No Statement of Estimated Regulatory Cost was prepared.
Any person who wishes to provide information regarding a statement of estimated regulatory costs, or provide a proposal for a lower cost regulatory alternative must do so in writing within 21 days of this notice.
SPECIFIC AUTHORITY: 624.308(1), 627.4554(9) FS.
LAW IMPLEMENTED: 627.4554 FS.
IF REQUESTED WITHIN 21 DAYS OF THE DATE OF THIS NOTICE, A HEARING WILL BE HELD AT THE DATE,TIME AND PLACE SHOWN BELOW(IF NOT REQUESTED, THIS HEARING WILL NOT BE HELD):
DATE AND TIME: Tuesday, June 16, 2009, 9:30 a.m.
PLACE: Room 142, Larson Building, 200 East Gaines Street, Tallahassee, Florida
Pursuant to the provisions of the Americans with Disabilities Act, any person requiring special accommodations to participate in this workshop/meeting is asked to advise the agency at least 5 days before the workshop/meeting by contacting: Susan Jordan @ (850)413-5655. If you are hearing or speech impaired, please contact the agency using the Florida Relay Service, 1(800)955-8771 (TDD) or 1(800)955-8770 (Voice).
THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE IS: Susan Jordan, Government Analyst II, Bureau of Investigation, Division of Insurance Agents and Agency Services, Department of Financial Services, 200 East Gaines Street, Tallahassee, Florida 32399-0319, (850)413-5655
THE FULL TEXT OF THE PROPOSED RULE IS:
69B-162.011 Suitability and Disclosure in Annuity Contracts – Forms Required.
(1) Forms Adopted.
Forms DFS-HI-1980, “Annuity Suitability Questionnaire,” (Effective:________) and DFS-HI-1981, “Disclosure and Comparison of Annuity Contracts” (Effective:______), are adopted pursuant to Section 627.4554(4)(b) and (d), F.S., and are hereby incorporated by reference, effective January 1, 2009.
(2) Application.
This rule applies exclusively to any recommendation to purchase or exchange an annuity contract as defined in Section 627.4554(3), F.S., made to a senior consumer by an insurance agent or an insurer, which results in the purchase or exchange recommended. A senior consumer is a person 65 years of age or older. In a joint purchase or exchange, if any party is 65 or older the joint purchasers are considered to be senior consumers.
(3) Duties of Insurers and Insurance Agents.
(a) Before executing a purchase or exchange of an annuity to a senior consumer, an insurance agent or an insurer, unless exempted by Section 627.4554(8), F.S., and required by the Financial Industry Regulatory Authority to perform an alternative suitability analysis, must use form DFS-HI-1980, Annuity Suitability Questionnaire incorporated in subsection (1) above, to obtain information in order to determine the suitability of the recommendation.
(b) In addition to obtaining the information required by paragraph (a), before executing a replacement or exchange of an annuity contract to a senior consumer, the insurance agent or insurer must also provide contract comparison information to the senior consumer utilizing form DFS-HI-1981, Disclosure and Comparison of Annuity Contracts, incorporated in subsection (1) above.
(c) The type face for all printed questions or requests for information that will be directly received or answered by the consumer, and all portions of the referenced forms relating to the disclosure requirements pursuant to paragraphs (3)(a) and (b) above, must be of least 12-point type.
(d) Nothing in this rule shall prevent an insurer from adapting the forms adopted in subsection (1) for its use, upon written approval of any modifications by the Department. The Department shall approve an insurer’s modification to the forms provided:
1. The forms still contain all of the same information as the Department forms referenced above;
2. The type size requirement of paragraph (3)(c) above is met;
3. Additional material added to the form does not obscure the information required, or rearrange the required information it such a way as to make it more difficult to find or understand;
4. The revised form does not contain misrepresentations or misleading statements, and is not in any other way in violation of Section 626.9541, Florida Statutes.
(e) Insurers are permitted to modify the form to use check-off boxes for indication of investment experience and risk tolerance, but shall not substitute check-off boxes for any other items on the form.
(f) The addition of an insurer’s name, contact information, or trademark; the addition of borders; or changes in font which do not alter type size, do not require prior written approval by the Department.
(g) Approval by the Department does not preclude disapproval by the Florida Office of Insurance Regulation pursuant to any provision of the Florida Insurance Code, and rules adopted there under.
Rulemaking Authority 624.308(1), 627.4554(9) FS. Law Implemented 627.4554 FS. History–New________.