Sentinel: New Suitability Form and Agent Disclosure Requirements
We previously announced our new Suitability Form and new requirements for Agent Disclosure. We’ve received feedback that the requirements are unclear, so we’d like to clarify the requirements here.
New Suitability Questionnaire: Required in All States except Florida
In conjunction with the new, revised NAIC Model Regulation on Annuity Suitability and Agent Disclosure (see below), we have updated the Suitability Questionnaire and will begin using the new form for all states, except Florida. We have updated the application packs and E-App with the new questionnaire. The new questionnaire must be used for all applications signed on or after January 1, 2021.
New Agent Disclosure Form: Required in Arizona, Iowa and Ohio.
Arizona, Iowa, and Ohio have adopted the new Model Regulation on Annuity Suitability and Agent Disclosure (see below). In these states, the agent disclosure form must be signed by both the consumer and agent and submitted with the application. We have updated the application packs and E-App with the form. The Agent Disclosure Form must be included for all applications in Arizona, Iowa and Ohio signed on or after January 1, 2021.
Revised NAIC Model Regulation on Annuity Suitability & Best Interest Standards
In February of 2020, the NAIC Membership approved revisions to Model #275 Annuity Suitability & Best Interest Standards. All recommendations by agents and insurers must be in the consumer’s best interest, and agents and carriers may not place their financial interest ahead of the consumers’ interest in making a recommendation. To date, Arizona, Iowa, and Ohio have adopted the Best-Interest Standard with an implementation date of January 01, 2021.
Agent Disclosure Form
As stated above, for business written in Arizona, Iowa and Ohio, the agent disclosure form must be signed by both the consumer and agent and submitted with the application.
Agent Course Requirements for Arizona, Iowa, Ohio and Rhode Island
Arizona,Iowa, Ohio and Rhode Island have updated existing annuity suitability to best interest standards. Each state requires resident and non-resident producers already licensed to sell annuity products to complete an additional 1-time course covering the NAIC Model’s updated annuity best interest standards of conduct and disclosure requirements.
· Arizona producers have a 6-month window beginning 01/01/2021, however, existing producers may complete their additional 1-hour of training immediately (Online or Live Webinar) Enroll Now
· Ohio producers have a 6-month window beginning 11/30/2020 to complete a one-time four credit training course provided by a department of insurance approved continuing education provider. Enroll Now
· Rhode Island’s updated regulation (230-RICR-20-25-1) will become effective 04/01/2021, and allows producers to begin updated training on or after January 1. Enroll Now
· New producers licensed on or after January 1, 2021, must complete 4-hour annuity certification course covering annuity types, classifications and primary uses, the parties to the contract, how fixed, variable, indexed, and other product-specific annuity contract provisions affect consumers, how qualified and nonqualified annuities are taxed, appropriate standard of conduct sales practices, and replacement and disclosure requirements.
· Both the 1- and 4-hour best interest training courses apply toward a producer’s ongoing continuing education requirements when completed in the resident state.
Sentinel Security Life Insurance Company will continue to provide agents with additional resources and information necessary to aid them in meeting new best interest standards.