PURPOSE: This rule implements the requirements of section 375.141.1(8), RSMo, with respect to the demonstration of incompetence, untrustworthiness or financial irresponsibility of producers in the offer, sale or exchange of variable life and variable annuity products.

1. (1) Grounds for the discipline or disqualification of producers shall include, in addition to other grounds specified in section 375.141, RSMo, failure to comply with or violation of the following professional standards of conduct:

   1. (A) Producers, in the conduct of variable life and variable annuity business, shall observe high standards of commercial honor and just and equitable principles of trade. Implicit in a producer’s relationship with customers is the fundamental responsibility of fair dealing. Practices that violate this responsibility of fair dealing include, but are not limited to, the following:

      1. 1. Inducing an exchange or switch of a

variable life or variable annuity contract with insignificant benefit to the consumer, but for the purpose of accumulating commissions by the producer; and

1. 2. Causing the execution of transactions

that are not authorized by customers or the sending of confirmations in order to cause customers to accept transactions not actually agreed upon; and

1. (B) Producers shall not materially aid any other person in any violation or failure to comply with any standard set forth in this rule.

AUTHORITY: sections 374.040, 374.045 and 375.013, RSMo 2000. Emergency rule filed April 14, 2005, effective April 26, 2005, expires Jan. 1, 2006. Original rule filed Sept. 30, 2005, effective March 30, 2006. *Original authority: 374.040, RSMo 1939, amended 1967; 374.045, RSMo 1967, amended 1993, 1995; and 375.013, RSMo 1993, amended 1995.