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31.09.12.00.htm 31.09.12.00. Title 31 MARYLAND INSURANCE ADMINISTRATION Subtitle 09 LIFE INSURANCE AND ANNUITIES Chapter 12 Suitability in Annuity Transactions Authority: Insurance Article, §2-109(a) 4-113, 10-126(a)13) and (d) 27-102, 27-202, and 27-203, Annotated Code of Maryland
31.09.12.01.htm 31.09.12.01. 01 Purpose.. The purpose of this chapter is to require insurers to establish a system to supervise recommendations and to set forth standards and procedures for each recommendation to a consumer that results in a transaction involving an annuity product so that the insurance needs and financial objectives of the consumer at the time of the transaction are appropriately addressed.
31.09.12.02.htm 31.09.12.02. 02 Scope.. A. In General. This chapter applies to each recommendation to purchase, exchange, or replace an annuity made to a consumer by an insurance producer, or an insurer where no insurance producer is involved, that results in the purchase, exchange, or replacement recommended.B. Exceptions. Unless otherwise specifically included, this chapter does not apply to recommendations involving:1) Direct response solicitations where there is no recommendation based on
31.09.12.03.htm 31.09.12.03. 03 Definitions.. A. In this chapter, the following terms have the meanings indicated.. B. Terms Defined.. 1) "Annuity" means a fixed annuity or variable annuity that is individually solicited, whether the product is classified as an individual or group annuity.2) "Consumer" means an individual who seeks to obtain, obtains, or has obtained an annuity covered by this chapter either directly from an insurer or from an insurance producer.3) “Continuing education
31.09.12.04.htm 31.09.12.04. 04 Duties of Insurers and of Insurance Producers.. A. In recommending to a consumer the purchase of an annuity, the exchange of an annuity, or the replacement of an annuity, any of which results in another insurance transaction or series of insurance transactions, an insurance producer, or an insurer where no insurance producer is involved, shall have reasonable grounds for believing that the recommendation is suitable for the consumer based on:
31.09.12.05.htm 31.09.12.05. 05 System to Supervise Recommendations.. A. Supervision System.. 1) An insurer shall establish a supervision system that is reasonably designed to achieve the insurer’s and the insurance producer’s compliance with this chapter, including, at a minimum:a) Maintaining reasonable procedures to inform its insurance producers of the requirements of this chapter and incorporating the requirements of this chapter into relevant insurance producer training manuals;b) Establishing standards
31.09.12.06.htm 31.09.12.06. 06 Prohibited Acts ― Insurance Producers.. An insurance producer may not dissuade, or attempt to dissuade, a consumer from:. A. Truthfully responding to an insurer’s request for confirmation of suitability information;. B. Filing a complaint; or. C. Cooperating with the investigation of a complaint..
31.09.12.07.htm 31.09.12.07. 07 Compliance with FINRA Requirements.. A. FINRA Requirements.. 1) Sales made in compliance with FINRA requirements pertaining to suitability and supervision of annuity transactions shall satisfy the requirements under this chapter.2) This regulation applies to FINRA broker-dealer sales of variable annuities and fixed annuities if the suitability and supervision are similar to those applied to variable annuity sales.3) Noncompliance with FINRA requirements means tha
31.09.12.08.htm 31.09.12.08. 08 Insurance Producer Training.. A. Requirements of Adequate Knowledge.. 1) An insurance producer may not solicit the sale of an annuity product unless the insurance producer has adequate knowledge of the product to recommend the annuity and the insurance producer is in compliance with the insurer’s standards for product training.2) An insurance producer may rely on insurer-provided, product-specific training standards and materials to comply with this B. An insurance producer
31.09.12.09.htm 31.09.12.09. 09 Compliance and Penalties.. A. An insurer is responsible for compliance with this chapter.. B. If a violation of this chapter occurs, because of either the action or the inaction of the insurer or its insurance producer, the Commissioner may order:1) An insurer to take reasonably appropriate corrective action for any consumer harmed by the insurer's, or by its insurance producer's, violation of this chapter;2) A general agency, independent agency, or an ins
31.09.12.10.htm 31.09.12.10. 10 Record Keeping.. A. Insurers, general agents, independent agencies, and insurance producers shall maintain or be able to make available to the Commissioner records of the information collected from the consumer and other information used in making the recommendations that were the basis for insurance transactions for 3 years after the insurance transaction is completed by the insurer. An insurer is permitted, but is not required, to maintain documentation on beha
31.09.12.11.htm 31.09.12.11. 11 No Private Cause of Action.. This chapter does not create a private cause of action for a violation of this chapter..
31.09.12.9999.htm 31.09.12.9999. Administrative History Effective date: July 1, 2007 (34:8 Md. R. 768) ―. Chapter revised effective November 1, 2011 (38:10 Md. R. 618).
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