1. (1) The purpose of this rule is to:

   1. (a) require a producer to act in the best interest of the consumer when making a recommendation of an annuity; and
   2. (b) require an insurer to establish and maintain a system to supervise recommendations so the insurance needs and financial objectives of a consumer at the time of the transaction are effectively addressed.

2. (2) Nothing herein shall be construed to:

   1. (a) create or imply a private cause of action for a violation of this rule; or
   2. (b) subject a producer to civil liability under the best interest standard of care under Section R590-230-4 or under standards governing the conduct of a fiduciary or a fiduciary relationship.

3. (3)(a) This rule applies to any sale or recommendation of an annuity.

   1. (b) Unless otherwise specifically included, this rule does not apply to a transaction involving:

      1. (i) a direct response solicitation where there is no recommendation based on information collected from the consumer pursuant to this rule;

      2. (ii) a contract used to fund:

         1. (A) an employee pension or welfare benefit plan that is covered by the Employee Retirement and Income Security Act of 1974, as amended;
         2. (B) a plan described by Section 401(a), 401(k), 403(b), 408(k), or 408(p), Internal Revenue Code, as amended, if established or maintained by an employer;
         3. (C) a government or church plan defined in Section 414, Internal Revenue Code, a government or church welfare benefit plan, or a deferred compensation plan of a state or local government or tax exempt organization under Section 457, Internal Revenue Code; or
         4. (D) a nonqualified deferred compensation arrangement established or maintained by an employer or plan sponsor;
      3. (iii) a settlement of or an assumption of liabilities associated with personal injury litigation or any dispute or claim resolution process; or
      4. (iv) a formal prepaid funeral contract.

KEY: insurance, annuity suitability

Date of Last Change: June 7, 2024

Notice of Continuation: May 21, 2024

Authorizing, and Implemented or Interpreted Law: 31A-2-201; 31A-22-425