California Insurance Code

§ 10509.914

INS § 10509.914 Effective Jan 1, 2025Div. 2 · Part 2 · Ch. 5 · Art. 9

Statute text

(a)In recommending to a consumer the purchase of an annuity or the exchange of an annuity that results in another insurance transaction or series of insurance transactions, the producer, or an insurer if no producer is involved, shall have reasonable grounds for believing that the recommendation is suitable for the consumer on the basis of the facts disclosed by the consumer as to their investments and other insurance products and as to their financial situation and needs, including the consumer’s suitability information, and that there is a reasonable basis to believe all of the following:

(1)The consumer has been reasonably informed of various features of the annuity, such as the potential surrender period and surrender charge, potential tax penalty if the consumer sells, exchanges, surrenders, or annuitizes the annuity, mortality and expense fees, investment advisory fees, potential charges for and features of riders, limitations on interest returns, insurance and investment components, and market risk.

(2)The consumer would receive a tangible net benefit from the transaction.

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Legislative history

Amended by Stats. 2024, Ch. 2, Sec. 3. (SB 263) Effective January 1, 2025.