Annuity Recommendation Obligations
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Questions and Answers

What is a producer's obligation when making a recommendation of an annuity?

  • To place the producer's financial interest ahead of the consumer's interest
  • To act in the best interest of the consumer without placing the producer's or the insurer's financial interest ahead of the consumer's interest (correct)
  • To prioritize the insurer's financial interest over the consumer's interest
  • To make recommendations based on the producer's financial situation

What factors must a producer know about a consumer before making a recommendation for an annuity?

  • The consumer's intended use of the annuity and tax status
  • The consumer's financial situation and needs, but not their financial objectives
  • The consumer's financial situation, insurance needs, and financial objectives (correct)
  • Only the consumer's age and annual income

What should a producer consider regarding a consumer's risk tolerance when recommending an annuity?

  • The consumer's willingness to accept nonguaranteed elements in the annuity, among other factors (correct)
  • Only the consumer's willingness to accept guaranteed elements in the annuity
  • Risk tolerance is not relevant in making recommendations for annuities
  • The producer's own risk tolerance, not the consumer's

What must a producer do regarding documentation when recommending an annuity?

<p>Document information relating to care, disclosure, conflict of interest, and the consumer’s financial situation, insurance needs, and financial objectives (C)</p> Signup and view all the answers

What is the main focus of a producer when knowing a consumer's financial situation, insurance needs, and financial objectives?

<p>To provide a recommendation option that addresses the consumer’s financial situation, insurance needs, and financial objectives (B)</p> Signup and view all the answers

In what circumstances should a producer place their financial interest ahead of the consumer's interest when recommending an annuity?

<p>The producer should never place their financial interest ahead of the consumer's interest when making an annuity recommendation (A)</p> Signup and view all the answers

What must a producer consider when making a recommendation for an annuity?

<p>The consumer's financial situation (A)</p> Signup and view all the answers

What must a producer disclose to the consumer before recommending or selling an annuity?

<p>The sources of cash compensation received by the producer (B)</p> Signup and view all the answers

In the case of an exchange or replacement of an annuity, what should the producer consider?

<p>Whether the consumer will incur a surrender charge or lose existing benefits (A)</p> Signup and view all the answers

What is required before selling, soliciting, or negotiating an annuity?

<p>Completion of a 4-hour training course (D)</p> Signup and view all the answers

What action can the Director take for any consumer who is harmed by a violation of laws concerning suitability of annuity sales?

<p>Order corrective action for the consumer (B)</p> Signup and view all the answers

What obligation does the producer have regarding obtaining consumer profile information before recommending an annuity?

<p>Make reasonable efforts to obtain consumer profile information (C)</p> Signup and view all the answers

What is the duty of the producer in making a recommendation for an annuity?

<p>To exercise reasonable diligence, care, and skill (D)</p> Signup and view all the answers

When is a producer not obligated to a consumer?

<p>When the consumer refuses to provide relevant information requested by the producer (C)</p> Signup and view all the answers

What must be considered in the case of an exchange or replacement of an annuity?

<p>Whether the replacing product would substantially benefit the producer (B)</p> Signup and view all the answers

What is required for an insurer's producers before making proper recommendations?

<p>A supervision system through written procedures and periodic record review (A)</p> Signup and view all the answers

'What is one of the disclosure obligations prior to the recommendation or sale of an annuity?' - This question is best suited for which part of the text?

<p>'Disclosure Obligation' section (B)</p> Signup and view all the answers

What is one of the considerations in making a recommendation for an annuity?

<p>Consumer's financial situation (C)</p> Signup and view all the answers

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