Fla. Stat. §627.4554 — what it says, and how the exam tests it

627.4554 Suitability in annuity transactions. — (1) PURPOSE. — The purpose of this section is to require agents to act in the best interest of the consumer when making a recommendation of an annuity and to require insurers to establish and maintain a system to supervise so that the insurance needs and financial objectives of consumers are effectively addressed at the time of the transaction. (2) SCOPE. — This section applies to any sale or recommendation of an annuity. (3) DEFINITIONS. — As used in this section, the term: (a) “Agent” means a person or entity required to be licensed under the laws of this state to sell, solicit, or negotiate insurance, including annuities. For purposes of this section, the term includes an insurer when no agent is involved. (b) “Annuity” means an insurance product under state law which is individually solicited, whether classified as an individual or group annuity. (c) “Cash compensation” means any discount, concession, fee, service fee, commission, sales charge, loan, override, or cash benefit received by an agent from an insurer or intermediary or directly from the consumer in connection with the recommendation or sale of an annuity. (d) “Consumer profile information” means information that is reasonably appropriate to determine whether a recommendation addresses the consumer’s financial situation, insurance needs, and financial objectives, including, at a minimum, the following: 1. Age. 2. Annual income. 3. Financial situation and needs, including debts and other obligations. 4. Financial experience. 5. Insurance needs. 6. Financial objectives. 7. Intended use of the annuity. 8. Financial time horizon. 9. Existing assets or financial products, including investment, annuity, and insurance holdings. 10. Liquidity needs. 11. Liquid net worth. 12. Risk tolerance, including, but not limited to, willingness to accept nonguaranteed elements in the annuity. 13. Financial resources used to fund the annuity. 14. Tax status.