ALABAMA

BILL NUMBER: SB 75 & HB 224

AMENDS CODE SECTION: None 

An Act adopting the Interstate Insurance Product Regulation Compact (IIPRC) to the state of Alabama.  

STATUS: Introduced to House and Senate Committee on Banking and Insurance 5 Feb 2008. 

SUMMARY:  The purpose of this Act is to help states join together to establish an interstate compact to regulate designated insurance products and to create uniformity in the approval of individual and group annuity, life, disability income, and long-term insurance policies. The current law provides that individual and group annuities must be filed with the Commissioner of Insurance before they can be used in the State of Alabama. The amended act adopts the Interstate Insurance Product Regulation Compact which permits uniform approval of individual and group annuities. Furthermore, it permits the state of Alabama to become a member of the Interstate Insurance Product Regulation Commission, a joint public agency. Additionally, the amended act mandates that the Commissioner of Insurance serve as the representative of the state to the Commission.

Alabama seeks to join 31 other states that have adopted the Interstate Insurance Product Regulation Compact (IIPRC). The IIPRC serves its member States by providing a vehicle to develop uniformity in national product standards in order to maintain a high level of protection to consumers of annuities, life insurance, disability income, and long-term care insurance products. The IIPRC also establishes a central filing point for such insurance products. Additionally, the Compact provides the States with a means to thoroughly review product filings and to make regulatory decisions according to uniform product standards. By adopting the IIPRC, Alabama will be providing strong consumer protection to purchasers of annuities and other insurance products; and, serving to sustain a competitive financial market by providing increased and cost-effective insurance choices.

ARIZONA

BILL NUMBER: HB 2387

AMENDS CODE SECTION: 36, Arizona Revised Statutes by adding Chapter 38.         The Act discusses the legal consequences of the “aid in dying” and includes a provision on the effects of insurance and annuity policies (§36-3814).              

STATUS: 24 Jan 2008 went to House Committee(s) Judiciary, Health, and Committee on Rules.

SUMMARY:  The Act outlines general provisions about the legality of “aid in dying.” Section 36-3814 deals with the effects that aid in dying,  specifically, the sale, procurement or issuance of any life, health, or accident insurance or annuity policy or the rate charged for any policy may not be conditioned on or affected by a person making or rescinding a request for medication to end the person’s life in a humane and dignified manner. Furthermore, an insurer may not require or request an insured to disclose whether he or she has considered or executed a request for aid in dying. Finally, the Act provides that a qualified patient’s act of ingesting medication to end his or her life in a humane and dignified manner does not affect these policies.

The effects that “aid in dying” have on insurance and annuities is brand new to Arizona legislation, as well as all of chapter 36 which outlines the many legal implications of “aid in dying.” The new Act encourages humane treatment and autonomy of the dying by separating personal medical choices from having an effect on the annuity.   

ARIZONA

BILL NUMBER: HB 2487

AMENDS CODE SECTION: §33-1126 AZ Revised Statues. An Act relating to personal property exemptions. 

STATUS: Introduced 17 Jan 2008.  

SUMMARY: The Act enumerates specific types of debtors’ property that are exempt from execution, attachment, or sale on any process issued from any court. The amended Act adds that an annuity contract is exempt if it has been owned by the debtor for a continuous unexpired period of two years and the contract has named a trust or debtor as the beneficiary. The Act still allows exemption for the annuity contract if the contract names the beneficiary as the debtor’s surviving spouse, child, parent, brother or sister, or any other dependent family member. 

This amendment broadens the scope of annuity contracts that are exempt from creditors. In effect, the amendment gives the debtor another choice of who can be named the beneficiary of his/her annuity contract while still being exempt from creditors. This amendment provides greater protection for annuities in Arizona, making annuities more attractive to shield assets from creditors.

ARKANSAS

GUIDELINE    EXTERNAL INDEXED CONTRACT GUIDELINES (Found at Arkansas Department of Insurance Life and Health Division – Equity Index guidelines).

Although these Guidelines may not be new, they have new significance especially concerning the provisions of Agent education. The guidelines currently state that “The filing company is responsible for assuring that all persons soliciting an external-indexed contract are suitably licensed and trained. The company shall maintain detailed files of training procedures available for the inspection by the Commissioner. With any filing of an external-indexed contract the company shall submit a certification that the contract will not be solicited by any person who is not trained and qualified.” What does this mean in today’s environment? Increased and repeated training by each individual carrier that an agent is associated with is certainly within the realm of possibility.

CALIFORNIA

BILL NUMBER: AB 267

AMENDS CODE SECTION: An act to add Article 6.2 to Chapter 1 of Part 2 of Division 1 of the Insurance Code, relating to annuity transactions.  

STATUS: Refiled 1 Feb. 2008 pursuant to Joint Rule 56.

SUMMARY: The Act enumerated different suitability standards when recommending an annuity to a senior consumer. For example, the insurer or agent had to have reasonable grounds for believing that the recommendation to purchase an annuity was suitable for the senior consumer based on facts disclosed by the senior relating to financial situation and needs. It also required the insurers to establish a system to supervise compliance with the placement of annuities to senior consumers.

Article IV, Section 10(c) of the California Constitution states that any bill introduced during the first year of the two year legislative session that is not passed by the house of origin by January 31 of the second year of the session can no longer be acted on by the house.

Bill 267 was introduced in February of 2007; and because it was not passed by its house of origin by January 31 2008, it died pursuant to Art. IV, Sec. 10(c) of the California Constitution. The Bill was refilled with the Chief Clerk pursuant to Joint Rule 56 on 2/1/08. Suitability in the legislature of California has been debated for more than 4 years, with little movement except for SB 620 regarding Medi-Cal qualification.  During previous committee meetings, those opposed to the proposed suitability bills strongly voiced a preference for the NAIC Suitability Model. Unfortunately, some legislators have resisted this suggestion. As a result, California, which boasts one of the highest annuity premium amounts being sold in the country, has yet to enact meaningful suitability standards.

While annuity insurance carriers have taken it upon themselves to require suitability analysis and disclosures with applications, the legislature remains stagnant. 

CALIFORNIA

BILL NUMBER: AB 1271

AMENDS CODE SECTION: Amends Sections 10509.4 and 10509.6 of the Insurance Code. The Bill addresses disclosure requirements relating to replacement coverage. 

STATUS: Up from Committee on 1 Feb. 2008; filed with chief clerk pursuant to Joint “Rule 56”.

SUMMARY: Existing law provides for the regulation of life insurers by the Department of Insurance. Under existing law, an agent is required to provide specified information to an applicant for life insurance or for an annuity if the applicant is replacing existing coverage and to provide the applicant with a notice regarding replacement of that coverage. Existing law requires an insurer that is issuing a new policy that is a replacement of existing life insurance or an annuity, to provide specified information to the insurer whose policy or annuity will be replaced. This bill would, in addition, require an agent to prepare a contract comparison summary of the coverage provided by the existing and replacing insurers and would require that information be included in the replacement notice information concerning surrender charge penalties and interest rate. The bill would require an insurer to confirm whether an applicant is replacing existing coverage, and if the application is for replacement coverage, send the applicant specified information relating to the replacement coverage. The bill would also require the replacing insurer to send the existing insurer a copy of the completed contract comparison summary, and both the existing and both the existing and replacing insurers would be required to confirm its accuracy, as specified. The bill would require the replacing insurer to allow cancellation without penalty or extend the trial period, as specified, of coverage if material inaccuracies were communicated about the replacement coverage or it is not a substantial benefit to the insured.

This bill attempts to tackle the increasing replacement practices found in California by a previous study. It is interesting to note that the bill requires a comparison of   the existing policy to the proposed new policy and specifically draws attention to the surrender charge of the existing policy and the bonus, if any, of the proposed policy. It is an industry practice to offer a bonus to alleviate a surrender charge in a replacement transaction.

The bill also requires an examination of the new surrender charge period. Contrary to popular belief, a bonus alone will not protect the transaction from being considered unsuitable. A new, potentially longer, surrender charge period may be problematic. In addition, disclosure of conditions for receiving the bonus must be included. For example, whether the product is two tiered (meaning the interest rate is dependant on payout election a/k/a annuitization.)

Specifically, the agent must identify the “substantial financial benefit” for proposing the replacement. It will require the carriers (or regulators) to create, a special form, otherwise the producer’s individual reasoning will lack uniformity and clarity. A needed amendment in the bill should include clarification when under (B)(4), printed communication needs to be left with the applicant.

CALIFORNIA

BILL NUMBER: AB 2150

AMENDS CODE SECTION: Amends Section 787 of the Insurance Code, relating to insurance and sales designations.

STATUS: May be heard  in Committee on 22 March. Referred to Committee on Insurance on 5 March.

SUMMARY: As introduced by Berg. The existing law provides that no insurer, agent, broker, solicitor, or other person or other entity shall solicit persons 65 years of age or older in CA for the purchase of disability insurance, life insurance, or annuities through the use of a true or fictitious name which is deceptive or misleading with regard to the status, character, or proprietary or representative capacity of the entity or person, or to the true purpose of the advertisement.

This Bill would provide that no insurer or life agent shall use any title, designation, credential, or description, including “certified senior financial advisor,” “certified senior life agent,” “senior life insurance expert,” or any other phrase that implies or could reasonably be interpreted to suggest special expertise or reliability in the sale of life insurance products to persons 65 years of age or older, unless the commissioner has specifically authorized use of the title, designation, credential, or description, as specified.

This bill furthers the insurance industry’s  effort to alleviate the alphabet soup which lingers behind some producer’s names.  California is not alone in its recent restrictions of insurance designations. Many states have issued bulletins directing producer’s use of designations. While California’s legislation focuses on “senior” designations, many insurance carriers have already banned such designations as well as other titles which carriers consider potentially misleading to consumers. This furthers California’s regulations found in Title 10, CA code of Regulations concerning unacceptable words and improper usage of words in corporate names.

CALIFORNIA

BILL NUMBER: SB 739

AMENDS CODE SECTION: An Act to amend Insurance Code § 10127.7 and to add § 789.105.An Act about the suitability of annuity and life insurance transactions. 

STATUS: Vetoed by Governor on 11Sept. 2007.  

SUMMARY:  If a senior makes a request in writing or via telephone for a meeting the same day to discuss the purchase of specific life insurance or annuities that are for funeral or burial costs and have a specified initial face value designated by the purchaser, a certain notice must be delivered to the senior prior to the start of the meeting.

As discussed in Spring 2007 ARC issue, the bill sought to change the free look period to no less than 30 days for annuity contracts purchased with a face amount of $15,000 or more.

CALIFORNIA

BILL NUMBER: SB 1434

AMENDS CODE SECTION: Insurance Code Chapter 1, Part 2, Division 2 by adding Article 8.

An Act adopting the Interstate Insurance Product Regulation Compact (IIPRC) to California.

STATUS: Introduced 21 February 2008.

SUMMARY: By adopting the IIPRC, California will join the Interstate Insurance Product Regulation Commission, a joint public agency. The previous Act gave the Insurance Commissioner the ability to approve the products and filings. The amended Act provides that the Commission will have the authority to make uniform standards of product lines, receive and review products filed with the Commission, and approve the product filings that meet the uniform standards. Additionally, the Act provides that the commission is not the exclusive entity that receives and reviews insurance product filing. The Act also gives the state the opportunity to opt out of a particular uniform standard.  A commissioner would be designated to represent the state of California to the commission. 

See Alabama Comments.

COLORADO

BILL NUMBER: HB09-1228

AMENDS CODE SECTION: 10-2-801(1) Concerning Financial responsibility for unfair business practices in the sale of insurance. 

STATUS: Pending. 

SUMMARY: Authorizes the commissioner of insurance to collect restitution from insurance producers and insurance companies for wrongful acts. Requires an insurer to be financially responsible for the unfair business practices of an insurance producer authorized to sell a product or plan of the insurer, if the insurer knew or should have known about the unfair business practices pursuant to Title 10 CRS. 

Section 10-3-1104 sets for specific methods of unfair competition and practices, including issues from advertising, misrepresentation, rebates, and the failure to act reasonably concerning possible claims. In an ideal world, or a world structured similar to the B/D world, insures would have a better handle on the day to day affairs of independent agents. Although market conduct and advertising regulations have been put in place by insurers to help safeguard against deceptive practices, insurers may not have a system in place which would review all business models, materials and information to detect unfair business practices. It will be interesting to see, how long before insurers put more or different systems in place.  

CONNECTICUT

BILL NUMBER: SB 155

AMENDS CODE SECTION:  § 38a-433(1)(f). The Act prohibits the sale of variable annuity contracts or policies to seniors.

STATUS: Introduced to Joint Select Committee on Aging on 14 February 2008.

SUMMARY: The amended Act adds a provision which provides that no insurance company shall sell a variable annuity policy or contract to any person sixty-five years of age or older. If passed, such provision takes effect on 1 January 2009.

This Act provides the ultimate protection to seniors aged 65 and older against purchasing variable annuities by completely prohibiting it on and after 1/1/09.  This bill was discussed at a hearing on 19 Feb.  Susan Giacalone of the CT Insurance Association testified before the JT committee on Aging. In her testimony she noted that VA’s were vital tools used for retirement, for investment savings and planning. The bill would segment a target of the market and prohibit their use of the tool. Ms. Giacalone noted that there were already safeguards in place such as SEC review and oversight, free look periods, and suitability laws. In response to comments concerning unscrupulous salespersons, Ms. Giacalone comments that abuses have taken place in the past which have lead to better standards, which were supported by the industry. 

During the discussion, it is interesting to note that Indexed products were alluded to. The committee also seemed bothered by information that had been presented to them concerning long surrender charges and high commissions. Ms. Giacalone deferred specific questions concerning annuities to Mr. Pauline of NAIFA, who responded well, noting some additional concerns with the bill, such as possible tax consequences from seniors not being able to 1035 variable annuities. The committee also asked Ms. Giacalone to review current suitability law and compare that with model laws to see if an alternative to the bill would be advisable and would concern strengthening penalties to existing laws.

CONNECTICUT

BILL NUMBER: SB 169

AMENDS CODE SECTION: 38a-453. An Act to protect annuity and life insurance proceeds from certain creditors.            

STATUS: 14 February 2008 moved to Joint Committee on Insurance and Real Estate.

SUMMARY: The Act protects life insurance and annuity proceeds by protecting a maximum of $150,000 of the cash proceeds from a life insurance policy or an annuity contract from attachment, garnishment, or legal process from the creditors of the insured and beneficiary, unless the annuity was taken out for the benefit of such creditor.

The public hearing transcripts on 2/28 have as of yet not been posted. This bill replaces the current general statute Section 38-453. It adds the $150,000 protection that did not appear in the prior law.  If passed it would take effect on 10/1/08.

CONNECTICUT

BILL NUMBER: HB 5158

AMENDS CODE SECTION: § 38a-702. An Act about insurance producers’ licenses Section 38a-432a. An Act relating to suitability regulations.  

STATUS: 14 February 2008 moved to Joint Committee on Insurance and Real Estate. 

SUMMARY: Applicants for an insurance producer’s license must take an exam, and prior to that exam he/she must prove to the commissioner that he/she has successfully completed a course approved by the commissioner requiring least 20 hours for each line of insurance the applicant is applying to be licenses. This is a big change from the previous Act, as the old Act at least 40 hours for each line of insurance.

This provision concerning suitability mandates that the Insurance Commissioner adopt regulations to establish standards for the sale or exchange of annuities to consumers, and to establish procedures for making recommendations to consumers about the sale or exchange of annuities. The previous Act only required the regulations to protect seniors, which were defined as 65 years or older.

The Insurance Commissioner will most likely adopt the NAIC’s amended model suitability regulations which expands suitability protection to annuity consumers of all ages rather than just those individuals 65 years of age or older. The NAIC amended its suitability model regulations because annuity products are usually made up of complex financial contracts; consequently, the problem with unsuitable annuity products affects more than just individuals 65 years or older.

DISTRICT OF COLUMBIA

BILL NUMBER: B 17-0254

AMENDS CODE SECTION: None. An Act adopting the Interstate Insurance Product Regulation Compact (IIPRC).  

STATUS: No action since 20 June 2007.    

SUMMARY: See ALABAMA Summary.

See Alabama Comments.

FLORIDA

BILL NUMBER: HB 1003/SB 2082

AMENDS CODE SECTION: Florida Statutes § 626.171, 626.2815, 626.551, 626.9521, 626.9541, 626.99, and 627.4554 and relates to annuities purchased by seniors, continuing education of insurance producers, suitability and unfair trade practices.

STATUS: Prefiled on 19 February 2008. Committee Substitute bill 27March 2008.  

SUMMARY: Initially the amended Act added an additional provision to Section 627.4554 dealing with annuity purchases by seniors. The act provided that any Floridian who purchased an annuity who was 75 years of age or older at the time of the purchase could rescind the annuity contract without penalty. Such rescission could be made for any reason and at any time within one year of the purchase date if made in writing and delivered to the insurer selling the annuity products or its agent. Upon receipt of the notice of rescission, the senior was to receive a full refund of the costs paid for the annuity product or related services. Finally, the act mandated that any insurer licensed to write or sell annuities or annuity products in the state of Florida must include provisions notifying the senior of his/her right to rescind the annuity and the consequences of such rescission in all contracts and agreements for the purchase of annuity products. The bill has since morphed to remove the initial rescission language and instead address issues of unfair and deceptive marketing, twisting and churning, suitability information and continuing education requirements for producers.

As initially proposed, an annuity contract sold to persons 75 or older could be rescinded within one year. Many significant legal issues arose if this bill would have been adopted in its initial form. The uncertainty of each sale to those 75 or older would be overwhelming. Essentially, beginning at age 75, consumers could repeatedly buy and rescind annuities without any consequence. While unsuitable sales were clearly the target of this legislation, it potentially increased a serious problem of replacing annuities. How would carriers have accounted actuarially for the number of rescissions?

The Florida legislature would have been enticing agents to move business and make unsuitable sales. To react, insurers might have changed commission structures from first year commissions to trail commissions, but the Act also might have deterred insurers from selling annuities and annuity products in Florida because no cause was required for such rescissions.  

Further review of the bill prompted a committee substitute bill. The free look is no longer proposed to be extended to 1 year for those aged 75 and older, but rather is increased only to 14 days, up from 10 days. Florida has also now proposed an increase in agent training for annuity and life insurance producers on the subject of suitability. In proposing changes to its suitability rules and additional replacement laws, Florida’s proposed suitability bill rejects the NAIC suitability language by adding more specific references in the NAIC general categories of information (financial status, investment objective, tax status and other relevant information necessary to make a suitable recommendation).

HAWAII

BILL NUMBER: HB 273

AMENDS CODE SECTION: Amends Chapter 431:10D by adding standards in suitability in annuity transactions.

STATUS: Carried over from the 2007 Regular session and referred to CPH.

SUMMARY: Establishes standards and procedures to be followed by insurers or insurance producers when making recommendations to consumers who are considering the purchase or exchange of any annuity. Stipulates that the commissioner of Securities maintains jurisdiction over variable annuities. 

NAIFA and ACLI testified in support of the bill.  It is noteworthy that while consumer protection and disclosure were the focus of the bill, the committee noted that annuities could be an important source of retirement income.

IDAHO

BILL NUMBER: HB 411

AMENDS CODE SECTION: Idaho Code § 41-1940 An Act adopting the NAIC’s amended model suitability provision. 

STATUS: From House Committee on Business: Do Pass 22 February 2008.  

SUMMARY: This amended Act adopts the current NAIC annuity suitability model provision which expands the application of suitability standards to annuity purchasers of all ages. The previous Act required that when recommending the purchase or exchange of an annuity to a person 65 years of age or older, the insurer must have reasonable grounds to believe such recommendation to be suitable for the senior consumer based on facts disclosed by the consumer regarding the consumer’s investments and other insurance products, the consumer’s age, and his/her financial situation and needs. The amended Act now requires this suitability standard to be applied to all consumers, not just those 65 years of age or older.

The Idaho legislature adopts the NAIC’s current annuity suitability model provision because annuity products are usually made up of complex financial contracts; consequently, the problem with unsuitable annuity products affects more than just individuals 65 years or older.

ILLINOIS

BILL NUMBER: HB 676

AMENDS CODE SECTION: An act to adopt the Interstate Insurance Product Regulation Compact. 

STATUS: Referred to Rules Committee.

SUMMARY: See ALABAMA Summary

See Alabama Comments.

INDIANA

BILL NUMBER: HB 1135               

AMENDS CODE SECTION: Adds § 30-6 and repeals § 30-5 of the Indiana Code. An Act adopting the Uniform Power of Attorney Act.

STATUS: To House Committee on Judiciary on 8 January 2008.

SUMMARY: This amendment adopts the Uniform Power of Attorney Act which relates to annuities in a number of aspects.  An agent under a power of attorney of the principal may waive the principal’s right to be a beneficiary of an annuity if the power of attorney expressly grants the agent the authority to do so and exercise of such authority is not otherwise prohibited by another agreement or instrument. Section 11 of the amended Act outlines the authority the agent has when language in a power of attorney grants general authority over insurance and annuities. The agent is authorized to do the following: (1) Modify, exchange, rescind, release, terminate, continue, pay premiums, or make a contribution on a contract which provides an annuity to the principal or another when the annuity was obtained by or on behalf of the principal; (2) Obtain new, different, and additional annuity contracts for the principal and his/her spouse, children, dependents, and choose the amount, type of annuity, and method of payment; (3) Terminate, release, rescind, exchange, modify, pay premiums or make a contribution on an annuity contract obtained by the agent; (4) Apply for and receive a loan secured by an annuity contract; (5) Exercise an election; (6) Surrender and receive the cash surrender value on the annuity contract; (7) Implement investment available under an annuity contract; (8) Change the method of premium payments on an annuity; (9) Change or convert the type of annuity with respect to the authority the principal has or claims to have; (10) Select the method and timing of payment proceeds from an annuity; (11) Collect, sell, assign, hypothecate, borrow against or pledge the interest of the principal’s annuity contract; (12) Pay, compromise or contest, and apply for refunds in connection with a tax or levy by a taxing authority on an annuity contract, its proceeds, or liability accruing from the tax or levy. Section 12 of the Act outlines the authority the agent has when language in a power of attorney grants general authority over estates, trusts, and other beneficial interests. When this language is used, the agent is authorized to transfer the principal’s interest in an annuity to the trustee of a revocable trust created by the principal as settler.  

The Uniform Power of Attorney Act gives broad authority to the power of attorney, or agent, over the principal’s annuity contracts. The bill gives the POA substantial flexibility to handle annuity matters. At the same time, it continues to prevent the POA from self-dealing by maintaining the fiduciary duty owed from the POA.

KANSAS

BILL NUMBER: SB 439

AMENDS CODE SECTION: Kansas Statutes Annotated 2007 Supplement 40-4909. An Act about annuity advertising standards.

STATUS: To Senate Committee on Financial Institutions and Insurance on 18 January 2008. 

SUMMARY: The amended Act adds an additional means in which the Insurance Commissioner may deny, suspend, revoke, or refuse to renew any license issued under this Act if the commissioner determines that the applicant or license holder violated or knowingly participated in or abetted a violation of The Advertising of Life Insurance and Annuities Act. 

This amendment broadens the commissioner’s ability to deny, refuse to renew, suspend, or revoke licenses.

KANSAS

BILL NUMBER: SB 440

AMENDS CODE SECTION: Kansas Statutes Annotated 2007 Supplement 40-4903. An Act relating to the continuing education requirements of insurance agents and producers.

STATUS: To Senate Committee on Financial Institutions and Insurance on 18 January 2008.

SUMMARY: The previous Act required that a licensed insurance agent who holds a variable contracts qualification must complete 12 continuing education classes (CEC) in variable contracts courses every two years. At least one hour must be dedicated to insurance ethics and no more than three to insurance agency management. The amended Act provides different continuing education classes for different types of insurance licenses. In the biennium January 1, 2008 through December 31, 2009, an insurance agent holding a variable contracts qualification must complete 12 required CECs within those two years. Additionally, the CECs must include at least one hour of class about insurance ethics and legal compliance, and no more than three of the required classes can be in insurance agency management. In the biennium 2010-2011, an insurance agent holding a variable contracts qualification must complete 18 CECs in required courses and at least three hours of classes about insurance ethics and legal compliance.  In the biennium beginning on and after January 1, an insurance agent holding a variable contracts qualification must complete 24 required CECs every two years which include at least three hours of classes about insurance ethics and legal compliance.

The amended Act adds provisions regarding carryover CECs into the next biennium. Such CECs may carryover if the insurance agent has obtained all the necessary CECs in the current license biennium, and the CECs to be carried over are not needed to satisfy the requirements of the current or any prior license biennium. However, the license biennium from January 1, 2008 through December 31, 2009, no CECs can be carried over to the next license biennium. In the license biennium starting on or after January 1, 2012, up to a maximum of 12 CECs can be carried over into the next license biennium. 

The amended Act gradually increases the number of CECs required to be completed every two years. The Act draws attention to the emphasis placed on ethics and compliance for producers.  This is a trend we expect to see more of within the industry.  Regulators, carriers, and producers are recognizing more readily the need for additional and specific training.

KENTUCKY

BILL NUMBER: HB 612

AMENDS CODE SECTION: Kentucky Revised Statutes § 304.15-050. An Act relating to senior’s ability to return policy. 

STATUS: To House Committee on Banking and Insurance on 25 February 2008.  

SUMMARY: The previous Act permitted the policyholder to return the policy only within ten days after purchase. Additionally, the prior Act did not require the annuity purchaser to be a senior at the time of purchase. The amended Act permits senior citizens, defined as an individual 60 years of age or older on the date the annuity was purchased, to return an annuity contract delivered or issued in Kentucky on or after January 1, 2009. The Act also requires annuity contracts to include a provision stating that the annuity contract may be returned by the owner to the company or the producer within a period stated in the contract which can not be less than 30 days after the owner receives the contract.

This Kentucky bill, is not as broad as Florida’s similar bill, as initially proposed.

Florida stated that the annuity may be returned without showing of cause and at any time within one year of the purchase date. Although the amended Kentucky Act lengthened the time in which the policy may be returned, it also restricted who can return the annuity policy. Of interest is Kentucky’s age limit of 60 years of age.  Most states use age 65 to grant special rights; however, Kentucky is using age 60.

KENTUCKY

BILL NUMBER: HB 334

AMENDS CODE SECTION: Kentucky Revised Statutes § 304.9-350. An Act outlining mandatory, permissible, and prohibited conduct by insurance agents and consultants.

STATUS: To House Committee on Banking and Insurance on 6 February 2008.

SUMMARY:  This amendment prohibits an individual or entity licensed as an agent, consultant, or an agency with whom the consultant has a financial or business ownership interest or affiliation, from contracting, soliciting, selling, or negotiating (either indirectly or directly) insurance with respect to the insurance risk of the insured or prospective insured subject to the consulting contract. Such actions are prohibited during the term of the contract and the 12 months after it expires. An individual or entity licensed as a consultant and an agent may sell, solicit, or negotiate insurance for other risks of the insured if: (1) the insurance covering the risk is not subject to the written agreement for consulting services; and (2) the written contract between the consultant and the insured permits the placement.  The amendment also adds provisions relating to agent and consultant compensation and disclosure requirements. 

This provision prohibits agents or agencies from establishing consulting relationships and also soliciting insurance transactions.  The legislation would require the agreement between the consultant and the client to agree upfront to the dual role played by the consultant.  It seems intended to clarify the relationship between the consultant and its client.

MAINE

BILL NUMBER: HB 1569

AMENDS CODE SECTION: 24-A Revised Statutes Annotated § 2537. An Act regarding variable annuity contracts and calculating death benefits.

STATUS: Senate refers to Joint Committee on Insurance and Financial Services in concurrence.

SUMMARY: Under the amended Act, the death benefit in variable annuity contracts must be calculated the day the benefit request is received and appropriate proof of death is provided. The death benefit must be paid within one business day of the day it was requested. By contrast, the previous Act allowed the insurer to calculate the benefit on the date of the insured’s death and the insurer was not required to pay the benefit until much later. 

e previous Act often resulted in a loss of value to the annuity because the insurer took a long time to pay the benefit after it was calculated. The amendment seeks to eliminate this delay by requiring prompt payment after calculations which will ultimately reduce the loss of value to the beneficiary of the variable annuity policy.   Likewise, it allows the beneficiary to dictate the timing of payments as well.

Meaning, if they want to wait until the market recovers, in theory they could delay sending the request and forms in an effort to “time” the payout on a more favorable market day. It also enables the beneficiary to receive prompt payout when requested.

MARYLAND

BILL NUMBER: HB 122

AMENDS CODE SECTION: Annotated Code of Maryland (2004 Replacement Vol. and 2007 Supp.) § 10-209. An Act about Maryland income tax and annuities.

STATUS: To House Committee on Ways and Means on 17 January 2008. 

SUMMARY: The amended Act states that an annuity under I.R.C. § 408 is considered a “qualified retirement plan” under this provision. If a Maryland resident on the last day of the taxable year is 65 years of age or older, is totally disabled, or the resident’s spouse is totally disabled, then an amount is subtracted from the federal adjusted gross income (AGI) in order to determine Maryland AGI. The amount to be subtracted from federal AGI is equal to or the lesser of the total income from an annuity included in the federal AGI for the taxable year.

The purpose of this amendment is to only tax annuity income once at the federal level and not again at the state level. It is giving individuals 65 years of age or older, disabled individuals, or individuals with disabled spouses an income tax break.  This legislation is incentive for Maryland residents to purchase and annuitize their annuities for favorable tax treatment. The Federal Congress has proposed similar favorable income tax treatment for annuity income although it has never proceeded to a federal income tax break. 

MARYLAND 

BILL NUMBER: HB 236

AMENDS CODE SECTION: Adds to Annotated Code of Maryland (2005 Replacement Vol. and 2007 Supp.) § 12-211. An Act relating to annuity contract clauses. 

STATUS: To House Committee on Health and Government Operations on 23 January 2008. 

SUMMARY: Section 12-211 apply to Health Maintenance Organizations. The provision states that an annuity contract may not be sold, delivered, or issued for delivery in Maryland if the policy or contract contains a clause that attempts to reserve discretion to the carrier to interpret the terms of the policy/contract, or to provide standards of interpretation or review. Any clause that contains this clause is void and unenforceable.

This clause was added to the Act to provide increased consumer protection against insurance agents and carriers.

MARYLAND

BILL NUMBER: HB 412/SB 87

AMENDS CODE SECTION: Repeals Annotated Code of Maryland (2001) and Supplement 2007 §§ 13-601 through 13-603 and adding §§ 17-101 through 17-404. An Act adopting the Uniform Power of Attorney Act. 

STATUS: SB 87: The amendment was adopted on the Senate floor on 26 Feb. 2008; HB 412: Sent to House Committee on Judiciary on 28 Jan.

SUMMARY: See Indiana HB 1135 Summary. 

See Indiana HB 1135 Comments.

MISSOURI

BILL NUMBER: SB 783/HB 1691

AMENDS CODE SECTION: None. An Act adopting the Interstate Insurance Product SB 783 Regulation Compact (IIPRC) to the state of Missouri. 

STATUS: HB 1691: To House Special Committee on Health Insurance on 7 Feb. SB 783: To Senate Committee on Small Business, Insurance and Industrial Relations. 

SUMMARY: See ALABAMA Summary.

See Alabama Comments.

MISSOURI

PROPOSED RULES: Implements requirements of sections 375.141.1(8) and 20CSR 700-1.145 to375.143 1.148. Supervision, recommendations and commercial standards in sales. 

STATUS: Hearing to have been held Feb. 2008 and anticipate will become effective by June 2008.  Bulletins concerning such rules were published in Nov. and Dec. 2007.

SUMMARY: Previously, such rules only dealt with variable products. 1.145 discusses the standards of commercial Honor and Principles of Trade in Life, Annuity and Long term care insurance sales. 1.146 discusses recommendations of annuities or variable life insurance to customers.   1.148 discusses reasonable supervision in fixed, indexed or other covered annuity sales.

This Missouri legislature is seeking to broaden the recommendation and supervision of annuities to include fixed products.  These acts will further protect consumers and create market conduct uniformity between variable and fixed products.

MISSOURI

BULLETIN: Annuity Actuarial Values 08-03. 

STATUS: Issued & Amended February 2008. 

SUMMARY: Clarifies laws affecting Annuity contracts in Missouri.  Covers FPDA, Cash values of Deferred Annuities and MVA.

Missouri’s objective in issuing this bulletin is to provide specific and consistent guidelines. Concerning FPDA, the MO DOI notes that some carriers have ignored future interest guarantees on annuity considerations in determining maximum valuation interest rate. Concerning cash values in deferred annuities, the MO DOI notes that standard non-forfeiture law for deferred annuities do not permit reductions in cash surrender value except for loans and withdrawals. Concerning MVA, the DOI notes that if a MVA has the potential to reduce cash surrender value below a previously credited amount, it violates Missouri’s law.

NEBRASKA

BILL NUMBER: LB 983

AMENDS CODE SECTION: Relating to the taxation and income tax credits for planned gifts. 

STATUS: Introduced 15 January 2008. Hearing 21 February 2008. 

SUMMARY: Amends prior law relating to the taxation and income tax credits for planned gifts.

This bill addressed the state income tax consequences of using an annuity in charitable gifting.

NEBRASKA

BILL NUMBER: LB 120

AMENDS CODE SECTION: Amends Sections 44-801 through 44-8107, Revised Statutes Cumulative Supplement, 2006. Concerns Protection in Annuity Transactions. 

STATUS: Carry over from first session.  Amended and Advanced to General File with Amendments. 

SUMMARY: LB 120 was introduced at the request of the Director of Insurance. It would repeal every reference to “senior” in those sections so that the act’s protections would apply to all consumers entering into annuity transactions and not just those aged 65 or older. 

The committee amendments would amend section 44-8106 of the Nebraska Senior Protection in Annuity Transactions Act 9 section 6 of the bill) to repeal provisions that are not in the National Association of Insurance commissioners model on which the Nebraska act is based. This section currently provides that before the execution of a purchase or an exchange of an annuity resulting from a recommendation, an insurance producer, or an insurer if an insurance producer is not involved, shall make reasonable efforts to obtain information concerning, among other things: (1) The senior consumer’s financial status, “including investments held by the senior consumer” and (2) “Other insurance products owned by the senior consumer”.  The committee amendments would repeal the above-quoted provisions.

Nebraska’s legislation is intended to bring its suitability statute back in line with the NAIC model.  Initially, the NAIC model

restricted recommendations to those individuals  65 and older.  The NAIC changed its model and Nebraska is now making changes to reflect the NAIC’s changes.  The NAIC’s language is broader. It requires the producer to consider all relevant information which would be needed to make a suitable recommendation. Such language implies the producer may need to know other insurance products owned by the proposed insured but does not limit the inquiry to just that information.  

NEBRASKA

BULLETIN: Concerns Current practices of carriers offering deferred annuities.

STATUS: Issued Winter 2007.

SUMMARY: The DOI cited a current practice by some insurance carriers offering deferred annuity contracts which was that the carrier leaves the annuity in accumulation status after the scheduled annuity date without obtaining permission or election of the contract owner. The DOI is concerned that contract owners may not understand their options and that the practice of continuation in the accumulation phase, which may be preferable to some owners, may be in violation of the contract.

It is reported that less than 3% of all deferred annuities are annuitized. While some owners roll their funds to other financial products, Nebraska is concerned about those products which are out of the surrender charge period but are still sitting with the carrier. Interestingly, customers receiving notice about their product will likely ask their agent about the notice.  They may be encouraged to move their funds into another financial product, thus beginning a new surrender charge period or contract. Although, the consumer should absolutely be aware of their options, a cautious note should be included in the language of the notice so the consumer does not seek additional products and unnecessarily limit their liquidity options, including starting a new and potentially unsuitable surrender charge period.

NEW HAMPSHIRE

BILL NUMBER: HB 1274

AMENDS CODE SECTION: Amends RSA 421-B:6. Concerns professional designations used by securities professionals.

STATUS: Pending. 

SUMMARY: A requested bill by the secretary of state. Amends RSA 421-B:6. Prohibits certain activities for certain securities professionals and allows the secretary of state to bar a person from licensure and to send letters of censure, caution, warning or admonition. 

New Hampshire is seeking to clarify the use of designations to further consumer understanding and confidence in financial professionals. Many states have prohibited certain designations as a means of avoiding misleading and deceptive trade practices. Many carriers have also set restrictions on certain designations.

NEW JERSEY

BILL NUMBER: A271

AMENDS CODE SECTION: Concerns life and annuity replacement. 

STATUS: Introduced 8 January 2008 and referred to Assembly Financial Institution and Insurance Committee.  Last session Bill # 2816.  

SUMMARY: Mandates adoption of regulations concerning replacement of life insurance and annuities. Regulations are to be similar in form to the Life Insurance and Annuity Model Regulation adopted by the NAIC.

New Jersey is seeking to strengthen its replacement policies and procedures for agents replacing business. The consumer’s understanding that the newly purchased product is intended to replace existing contracts is paramount. Likewise, the consumer must understand the potential differences and changes which will occur when the existing policy is replaced. Many agents falsely believe that a bonus product will alleviate any suitability problem resulting from a surrender charge. A bonus, while significant, is not the only criteria reviewed. An additional consideration is the length of contract terms with the new policy. For example, a 5% surrender charge being replaced by a 5% bonus may be considered of no consequence to the consumer; however, adding years of surrender charges must also be considered and may be detrimental to the consumer. 

NEW JERSEY

BILL NUMBER: S1258            

AMENDS CODE SECTION: Establishes the Interstate Insurance Product Regulation Compact.

STATUS: Introduced 21 February 2008 and referred to Senate Commerce Committee.

SUMMARY: See ALABAMA Summary. 

See ALABAMA Comments.

NEW JERSEY

BILL NUMBER: A1878/S1165

AMENDS CODE SECTION: Section 15 of PL 2001, c210 (C. 17:22A-40)                         

STATUS: Introduced 24 January 2008 and referred to Assembly Fin Institution and Insurance Committee.

SUMMARY: Requires insurance producers to notify Commissioner of  Banking and Insurance of any disciplinary action taken by non-governmental regulatory authority. FINRA is specifically noted. Additional remedies are given the commissioner in the event of noncompliance.

New Jersey is making efforts for additional disclosures regarding any disciplinary

actions. Considering the securities regulators are separate from the insurance producers this legislation will require producers to act affirmatively to report any allegations of misconduct.

NEW YORK

BILL NUMBER: SB 5053 and AO8068 

AMENDS CODE SECTION: Adopts Interstate Insurance Product Regulation Compact.  

STATUS: Carry over from 2007.  Bills referred to Insurance on 9 January 2008. 

SUMMARY: See ALABAMA Summary.

See ALABAMA Comments.

NEW YORK

BILL NUMBER: S07005 and A10002

AMENDS CODE SECTION: Adds new section  concerning the purchase of annuities by seniors. 

STATUS: 20 February 2008 A10002 referred to insurance 26 February 2008 S07005 referred to Aging.  

SUMMARY: The bills require certain disclosures to be made prior to the sale of an annuity to persons 70 years and older. Individuals to be informed of the impact on potential eligibility for the Medicaid program: the partnership for Long Term care, the commission resulting from the sale, and the surrender charges and other pertinent information. The justification for this bill is that it would allow seniors to more accurately evaluate the advisability of an annuity contract prior to buying it.   

This bill addresses several concerns surrounding annuity transactions. First, while annuities may be a solid strategy for preserving for a spouse in a Medicaid planning situation, annuities are sometimes misused in these situations. Because Medicaid eligibility rules are state specific, Medicaid planning necessarily requires interpretation of Medicaid laws, thus the use of a good elder law attorney is a wise choice. Second, the bill addresses suitability for seniors and includes a determination of the senior’s “health”. Next, the bill extends the “cooling off” period, or free-look period, as it is known in most states, to 60 days when the annuity sale occurs in the home of a senior. In all other situations, the senior’s “cooling off” period is 30 days.

NEW YORK

 BILL NUMBER: S00919

AMENDS CODE SECTION: Amends tax law, in relation to the exclusion from income for pensions and annuities and disability income. 

STATUS: Amended and recommitted to investigations and government operations. On 18 January 2008. 

SUMMARY: Raises the amount of the exclusion from taxable income allowed for qualified pensions and annuities from $20,000 to $50,000.

New York’s proposed legislation is an incentive to place funds in an annuity for future income. While the federal congress has not yet adopted federal income tax breaks for annuity income, state income tax assistance is a great step in the direction for supporting consumers for using annuities to provide for their own retirement income.

NEW YORK

BILL NUMBER: A0361

AMENDS CODE SECTION: Amends the civil practice law and the rules and the debtor and the creditor law, in relation to enforcement of money judgments. 

STATUS: Referred to judiciary on 9 January 2008.  

SUMMARY: The purpose of the bill is to increase the amount of exemptions in bankruptcy proceedings and provide a choice between the state and the federal exemptions.  The NY Homestead Act exemptions limits are over 10 years old, and have been eroded by inflation to be almost meaningless.  The bill sets realistic limits for today’s values and needs.   

As noted in the Spring 2007 ARC issue, New York is typically not a debtor friendly state. Numerous attempts in the past to increase exemptions have failed. Because New York did not set an automatic adjustment in the dollar value of exempt property in 1982 or permit New York residents to choose between the federal and state exemptions, New York residents are not on the same footing as residents of many other states. This bill, if passed, would insure that New York residents are not unfairly treated in comparison to residents of states that are completely under the Federal code. 

OREGON  

CONSUMER BROCHURES: Suitable Annuities for Senior Citizens and Your rights when purchasing Insurance and Annuities.

Many states have stepped up their efforts to alert Consumers about improper sales or marketing tactics, agent credentials and items to consider in purchasing annuities.  These brochures give very basic information and encourage senior citizens to call the Oregon Insurance Division with any questions, especially in the event that their questions are not being answered by the agent. This is a significant outreach step by the Insurance Division to consumers.

SOUTH CAROLINA

BILL NUMBER: SB 3023

AMENDS CODE SECTION: Adopts Interstate Insurance Product Regulation Compact.

STATUS: Carryover from 2007. Referred to Committee on Labor, Commerce and Industry 

SUMMARY: See Alabama Summary. 

See ALABAMA Comments.

SOUTH CAROLINA

BILL NUMBER: H3816

AMENDS CODE SECTION: Amends Section 15-41-30 relating to property exempt from attachment, levy and sale.

STATUS: Pending – carryover from 2007.  Referred to Senate Subcommittee. 

SUMMARY:  Increases a debtor’s interest in certain delineated properties, exempt from attachment, levy and sale under order of a court or as a result of a bankruptcy proceeding. Section B is added to allow for periodic adjustment to reflect the change in the Southeastern consumer Price Index, all urban consumers, as published by the Department of Labor.

This bill further protects a consumer’s/debtor’s rights to receive property that is traceable to an annuity.

SOUTH CAROLINA

BILL NUMBER: S456

AMENDS CODE SECTION: Adds article 7 to chapter 69, title 38 to enact the “suitability in annuity transactions”. 

STATUS: Carryover from 2007 – referred to House committee on Labor, commerce and industry.

SUMMARY:  Purpose of the act is to provide standards and procedures for recommendations to consumers which result in a transaction involving annuity products to appropriately address the insurance needs and financial objectives of consumers. Specifically states that compliance with NASD conduct rules pertaining to suitability satisfies the requirement of the article.

This bill was discussed in the Spring 2007 ARC issue. As noted it addresses the paramount concern for legislators and regulators about setting suitability standards for annuity transactions. As with some other proposed legislation, one section states that compliance with NASD (”FINRA”) Conduct Rules pertaining to suitability will satisfy the requirements as provided for recommendation of variable annuities.

TENNESSEE

BILL NUMBER: HB 4207/SB 4208 

AMENDS CODE SECTION: Title 56 by deleting Chapter 8, Part 1 in its entirety.  Relates to unfair trade practices and unfair claims settlement practices in the business of insurance.

STATUS: Referred to Committee.  

SUMMARY: Similar to other NAIC based legislation, this act The purpose of the act is to regulate trade and claims settlement practices in the business of insurance in accordance with the intent of Congress as expressed in the Act of Congress of March 9, 1945 and Gramm-Leach Bliley. The Commissioner has the sole enforcement authority for the act.

This bill deletes Tennessee’s existing unfair trade practice rules and adds new language which prohibits the following: misrepresentation and omission, making a false advertisement, committing defamation, and boycotting, coercion and using intimidation tactics in sales. This bill prohibits false statements and entries, unfair discrimination and rebating. The bill clearly sets forth many business practices which will violate Tennessee law. It also can not be construed to create or imply a private right of action. This prevents private plaintiffs from using the statutes as a cause of action.

TENNESSEE

BILL NUMBER:  SB3124

AMENDS CODE SECTION: TCA Title 56. Requires that the application for an annuity life policy state a duration of policy that is not subject to surrender charges. 

STATUS: Assigned to committees.

This bill states that beginning on July 1, 2008 an “annuity life insurance policy” is required to state the duration of the policy that is not subject to surrender charges.

UTAH

BILL NUMBER: HB 342

AMENDS CODE SECTION: Multiple modifications to Insurance Code.  

STATUS: Pending. 

SUMMARY This bill makes numerous grammatical and technical changes to Utah law. 

As it relates to annuities, the bill addresses maturity dates for annuitization dates, and sets the last date as the contract year following the date the annuitant turns 70 years old or the tenth anniversary of the contract.

WEST VIRGINIA

BILL NUMBER: HB 4246

AMENDS CODE SECTION: Legislative approval request to adopt rules concerning replacement of life insurance and annuities. Amends previous rules. 

STATUS: Pending.

SUMMARY: Series 8 concerns the replacement of life insurance policies and annuities.  The amendments add a definition for and provisions concerning illustrations. 

This bill is modeled from the NAIC Life Insurance and Annuities Replacement Model Regulation. The bill makes some technical corrections and adds language around illustrations.

WEST VIRGINIA

BILL NUMBER: HB 4247

AMENDS CODE SECTION: Legislative approval request to adopt rules concerning advertisement of life insurance and annuities.

STATUS: Pending. 

SUMMARY: Series 11 (proposed rule) amends the existing rules. Among other items, it expands applicability to all life insurance and annuity advertisements to be disseminated in the state.  Items concerning the content of the advertisement have been modified. Notably, new sections 4.1 and 4.2 replace the section concerning deception by omission, comparisons, statements about insurers and deceptive terminology. Under new Section 4.1 and 4.2 the concepts of truth, not misleading in fact or implication, completeness to avoid deception and overall impression are promoted.

This bill is based on the NAIC Advertisements of Life Insurance and Annuities Model Regulation. The definition of what constitutes an advertisement is very broad. It states that any material designed to create public interest in life insurance or annuities or in an insurer, or in an insurance producer; or to induce the public to purchase, increase, modify, reinstate, borrow on, surrender, replace or retain a policy. The bill clarifies what is not considered an advertisement as well. The bill prohibits the use of the term “investment”, “investment plan”, “deposit”, “savings plan” and other similar content. The use of such specific examples is very helpful to producers when crafting materials. The bill also restricts the use of terms such as “financial planner”, “investment adviser”, “financial consultant” or “financial counseling”.

WEST VIRGINIA

BILL NUMBER: HB 4249

AMENDS CODE SECTION: Legislative approval request to adopt rules concerning Suitability in Annuity transactions.

STATUS: Pending.

SUMMARY: Series 11(b) (proposed rule) is based on NAIC model as amended in 2006.  Duty is place on the producer to have reasonable grounds for believing recommendation is suitable for consumer based on facts disclosed. Records retention requirement is 10 years after completion of transaction. 

This bill follows the NAIC suitability model requiring a reasonable inquiry into the consumer’s financial status, tax status, investment objectives, and other relevant information to make a suitable recommendation. The bill does not create a private right of action. 

This is significant in that the state, not an individual consumer, will have access to the statute enforcement.

WEST VIRGINIA

BILL NUMBER: HB 4198 

AMENDS CODE SECTION: Licensing and Conduct of Individual Insurance Producers, Agencies, and Solicitors

STATUS: Pending.

SUMMARY: Series 2 (proposed rule)

This bill gives the commissioner the power to adopt rules concerning producer licensing and conduct. Series 2 is thus being proposed by the Department of Insurance and allows a producer who is not appointed with a certain carrier to refer a client to an appointed producer and then receive a portion of the commission if the referral leads to a sale. Prior to the referral, the non-appointed producer must disclose to the applicant that he/she is not appointed with that particular carrier. This bill includes a disclosure form that is required to be signed by the consumer.

WISCONSIN

BILL NUMBER: AB 542 and SB 294 

AMENDS CODE SECTION: Adopts Interstate Insurance Product Regulation Compact and relating to suitability in annuity transactions.

STATUS: Pending.  AB 542 was introduced on 10-16-07 – Passed the assembly and referred to Senate Committee on Health, Human Services, Insurance and Job Creation on 1/25/08.

SUMMARY: See related discussion on above states concerning interstate insurance product regulation. Suitability standards under this bill will amend current law which is applicable to those only 65 years or older to all consumers. 

See previous discussions concerning the Interstate Insurance Product Regulation Compact.  The amendment to the bill concerning correction of a drafting error relating to the definition of “rule”. In amending the suitability standards, Wisconsin joins a growing number of states which have decided that suitability is applicable to all purchasers not just those over 65 years of age.

WISCONSIN

BILL NUMBER: 2.07

AMENDS CODE SECTION: Relating to replacement of Life Insurance or Annuity Contracts. 

STATUS: Pending. 

SUMMARY: The purpose of this rule is to protect the interest of life insurance and annuity purchasers by establishing minimum standards of conduct and procedures to be observed in replacement and financed purchase transactions. 

This rule is based on the NAIC model.  For additional commentary, see West Virginia HB 4246.