Annuity Recommendation Obligations

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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?

Document information relating to care, disclosure, conflict of interest, and the consumer’s financial situation, insurance needs, and financial objectives (C) 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?

To provide a recommendation option that addresses the consumer’s financial situation, insurance needs, and financial objectives (B) 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?

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

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

The consumer's financial situation (A) Signup and view all the answers

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

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

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

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

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

Completion of a 4-hour training course (D) 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?

Order corrective action for the consumer (B) Signup and view all the answers

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

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

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

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

When is a producer not obligated to a consumer?

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

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

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

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

A supervision system through written procedures and periodic record review (A) 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?

'Disclosure Obligation' section (B) Signup and view all the answers

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

Consumer's financial situation (C) Signup and view all the answers