Neither an insurance producer nor an insurer where no producer is involved, will have any obligation to a senior consumer related to any annuity transaction if a consumer refuses to provide relevant information requested by the insurer or insurance producer, decides to enter into an insurance transaction that is not based on a recommendation of the insurer or insurance producer, or fails to provide complete or accurate information.
An insurer or insurance producer's recommendation will be considered reasonable under the circumstances known to the insurer or producer at the time of the recommendation.
To comply with this regulation, insurers must have systems in place for supervising recommendations. For example, an insurer may meet its obligations by conducting periodic reviews or by contracting with a third-party, such as an independent firm, to maintain the system and certify that supervision is taking place.
Compliance with the National Association of Securities Dealers Conduct Rules regarding suitability will satisfy the requirements for variable annuities. However, this does not limit the Insurance Commissioner's ability to enforce provisions of the new regulation.
Additionally, the model regulation exempts insurers and insurance producers from recommendations involving direct-response solicitations (where no recommendations are made based on information provided by the consumer), as well as various funded contracts covered under federal law.
Ohio National is not affiliated with, nor does it endorse or sponsor, any particular prospecting, marketing or selling system.