TITLE 13 INSURANCE
CHAPTER 9 LIFE INSURANCE AND ANNUITIES
PART 20 SUITABILITY IN ANNUITY
TRANSACTIONS
13.9.20.1 ISSUING AGENCY: The New Mexico Office of Superintendent of
Insurance (“OSI”).
[13.9.20.1 NMAC –
N, 10/1/2022]
13.9.20.2 SCOPE: This rule applies to any sale or
recommendation of an annuity in New Mexico or to a resident of New Mexico,
regardless of an insurance producer’s state of domicile.
[13.9.20.2 NMAC –
N, 10/1/2022]
13.9.20.3 STATUTORY AUTHORITY: Chapter 59A, Article 16 NMSA 1978 and Section
59A-2-9 NMSA 1978.
[13.9.20.3 NMAC –
N, 10/1/2022]
13.9.20.4 DURATION: Permanent.
[13.9.20.4 NMAC –
N, 10/1/2022]
13.9.20.5 EFFECTIVE DATE: October 1, 2022, unless a later date is cited
at the end of a section.
[13.9.20.5 NMAC –
N, 10/1/2022]
13.9.20.6 OBJECTIVE:
A. This rule requires an insurance producer as defined
in Section 59A-12-2E NMSA 1978 to act in the best interest of a consumer when
making a recommendation of an annuity and require an insurer to establish and
maintain a system to supervise recommendations so that the insurance needs and
financial objectives of the consumer at the time of the transaction are
effectively addressed.
B. Another objective of this rule is to regulate trade
practices in the insurance business and related businesses in accordance with
the intent of Congress, as expressed in the Act of Congress approved March 9,
1945, being c. 20, 59 Stat. 33, also designated as 15 U.S.C. Sections 1011 to
1015, inclusive, by defining, or providing for determination of, practices in
this state which constitute unfair methods of competition or unfair or
deceptive acts or practices so defined or determined.
[13.9.20.6 NMAC –
N, 10/1/2022]
13.9.20.7 DEFINITIONS: For the purposes of this rule:
A. “Annuity” means an annuity that is an insurance
product under state law that is individually solicited, whether the product is
classified as an individual or group annuity.
B. “Cash compensation” means any discount, concession,
fee, service fee, commission, sales charge, loan, override or cash benefit
received by an insurance producer in connection with the recommendation or sale
of an annuity from an insurer, intermediary or directly from the consumer.
C. “Comparable standards” means:
(1) for broker-dealers and registered
representatives of broker-dealers, applicable SEC and FINRA rules pertaining to
best interest obligations and supervision of annuity recommendations and sales, including, but not limited
to, the most current version of
Regulation Best Interest as promulgated by the SEC and codified at 84
F.R. 33318, and any amendments
or successor rules thereto;
(2) for investment advisers registered
under federal or state securities laws or investment adviser representatives, the fiduciary duties
and all other requirements imposed on such investment advisers
or investment adviser
representatives by contract
or under the Investment Advisers Act of 1940 or the
New Mexico Uniform Securities Act, Section C of Chapter 58, Article 13 NMSA
1978, including but not limited to, SEC Form ADV and interpretations; and
(3) for plan fiduciaries or fiduciaries, the
duties, obligations, prohibitions and all other requirements attendant to such
status under ERISA or the IRC and any amendments or successor statutes thereto.
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 non-guaranteed elements in the annuity;
(13) financial resources used to fund the
annuity; and
(14) tax status.
E. “Continuing education credit” or “CE credit” means
one continuing education credit hour as defined in 13.4.7.7 NMAC.
F. “Continuing education provider” or “CE provider” means
an individual or entity that is approved to offer continuing education courses
pursuant to Section 59A-12-26 NMSA 1978 and 13.4.7 NMAC.
G. “ERISA” means the federal Employee Retirement and Income
Security Act.
H. “Financial professional” means an insurance producer who
is regulated and acting as:
(1) a broker-dealer registered under
federal or state securities laws or a registered representative of a
broker-dealer;
(2) an investment adviser registered
under federal or state securities laws or a representative of an investment
adviser working with a registered adviser; or
(3) a plan fiduciary, as defined in ERISA
or IRC.
I. “FINRA” means the financial
industry regulatory authority or a succeeding agency.
J. “Intermediary” means an entity contracted directly
with an insurer or with another entity contracted with an insurer to facilitate
the sale of the insurer’s annuities by insurance producers.
K. “IRC” means the Internal Revenue Code.
L. “Material conflict of interest” means a financial
interest of an insurance producer in the sale of an annuity that a reasonable
person would expect to influence the impartiality of a recommendation. It does not include cash compensation or
non-cash compensation.
M. “Non-cash compensation” means any form of compensation
that is not cash compensation, including but not limited to health insurance,
office rent, office support and retirement benefits.
N. “Non-guaranteed elements” means the premiums,
credited interest rates (including any bonus), benefits, values, dividends,
non-interest-based credits, charges or elements of formulas used to determine
any of these that are subject to company discretion and are not guaranteed at
issue. An element is considered
non-guaranteed if any of the underlying non-guaranteed elements are used in its
calculation.
O. “Recommendation” means advice provided by an insurance
producer to an individual consumer that is intended to result or does result in
a purchase, exchange or replacement of an annuity in accordance with that
advice. Recommendation does not include
general communication to the public, generalized customer service assistance or
administrative support, general educational information and tools, prospectuses
or other product and sales material.
P. “Replacement” means a transaction in which a new
annuity is to be purchased and it is known or should be known to the proposing
insurance producer, or to the proposing insurers whether or not an insurance
producer is involved, that because of the transaction, an existing annuity or
other insurance policy has been or is to be any of the following:
(1) lapsed, forfeited, surrendered or
partially surrendered, assigned to the replacing insurer or otherwise
terminated;
(2) converted to reduced paid-up
insurance, continued as extended term insurance, or otherwise reduced in value
by the use of nonforfeiture benefits or other policy values;
(3) amended so as to
effect either a reduction in benefits or in the term for which coverage would
otherwise remain in force or which benefits would be paid;
(4) reissued with any reduction in cash
value; or
(5) used in a financed purchase.
Q. “SEC” means the United States securities and exchange
commission.
[13.9.20.7 NMAC –
N, 10/1/2022]
13.9.20.8 EXCEPTIONS: Unless otherwise
specifically stated, this rule shall not apply to transactions involving:
A. a direct response solicitation when there is no
recommendation based on information collected from the consumer pursuant to this
rule;
B. a contract used to fund:
(1) an employee pension or welfare
benefit plan that is covered by ERISA;
(2) a plan described by Sections 401(a), 401(k),
403(b), 408(k) or 408(p)
of the IRC, as amended, if established or maintained by an employer;
(3) a government or church plan defined
in Section 414 of the IRC, a government or church welfare benefit plan, or a
deferred compensation plan of a state or local government or tax-exempt
organization under Section 457 of the IRC; or
(4) a nonqualified deferred compensation
arrangement established or maintained by an employer or plan sponsor;
C. a settlement of or assumption of liability associated
with personal injury litigation or any dispute or claim resolution process; or
D. a formal prepaid funeral contract.
[13.9.20.8 NMAC –
N, 10/1/2022]
13.9.20.9 DUTIES OF INSURERS AND INSURANCE
PRODUCERS:
A. Best interest obligations. An insurance producer, when making a
recommendation of an annuity, shall act in the best interest of the consumer
under the circumstances known at the time the recommendation is made, without
placing the insurance producer’s or the insurer’s financial interest ahead of
the consumer’s interest. An insurance
producer has acted in the best interest of the consumer if the insurance
producer has satisfied the following obligations regarding care, disclosure,
conflict of interest and documentation as outlined in this rule.
(1) Care
obligation. An insurance producer,
in making a recommendation, shall exercise reasonable diligence, care and skill
to:
(a) know the consumer’s financial
situation, insurance needs and financial objectives;
(b) understand the available
recommendation options after making a reasonable inquiry into options available
to the insurance producer;
(c) have a reasonable basis to believe
the recommended option effectively addresses the consumer’s financial
situation, insurance needs and financial objectives over the life of the
product, after consideration of the information provided in the consumer
profile information;
(d) communicate the basis or bases of the
recommendation;
(e) make reasonable efforts to obtain
consumer profile information from the consumer before the recommendation of an
annuity;
(g) consider the consumer profile
information, characteristics of the insurer and product cost, rates, benefits
and features in making a determination whether an
annuity effectively addresses the consumer’s financial situation, insurance
needs and financial objectives, while understanding that:
(i) the level of importance of each
factor of the care obligation may vary depending on the facts and circumstances
of a particular case; and
(ii) each factor shall not be considered
in isolation.
(h) in the case of an exchange or
replacement of an annuity, consider the whole transaction, which includes
consideration of whether:
(i) the consumer will incur a surrender
charge, be subject to the commencement of a new surrender period, lose existing
benefits such as death, living or other contractual benefits, or be subject to
increased fees, investment advisory fees or charges for riders and similar
product enhancements;
(ii) the replacing product would
substantially benefit the consumer in comparison to the replaced product over
the life of the product; and
(iii) the consumer has had another annuity
exchange or replacement and in particular, an exchange or replacement within
the preceding 60 months.
(i) The care obligation
requirements of this rule:
(i) include having a reasonable
basis to believe the consumer would benefit from certain features of the
annuity, such as annuitization, death or living benefit or other
insurance-related features;
apply to a
particular annuity as a whole and to the underlying subaccounts to which funds
are allocated at the time of annuity purchase or exchange and to riders and
similar producer enhancements, if any;
(ii) do not require recommendation in all situations of an
annuity with the lowest one-time or multiple occurrence compensation structure;
(iii) do not impose additional ongoing monitoring
obligations on a producer, but such obligations may be separately owed under
the terms of a fiduciary, consulting, investment advising or financial planning
agreement between the producer and a consumer; and
(iv) do not create a fiduciary
obligation or relationship.
(2) Disclosure obligation. Before or at the time of the recommendation
or sale of an annuity, an insurance producer shall have a reasonable basis to
believe the consumer has been 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; any annual fees,
potential charges for and features of riders or other options of the annuity
limitations on interest returns, potential changes in non-guaranteed elements
of the annuity, insurance and investment components and market risk. These requirements are intended to supplement
and not replace other disclosure requirements of this rule. Before the recommendation or sale of an
annuity, an insurance producer shall prominently disclose to a consumer on a
form substantially similar to Appendix A located at
the end of this rule the following information:
(a) a description of the scope and terms
of the insurance producer’s relationship with the consumer and the role of the
insurance producer in the transaction;
(b) an affirmative statement of whether
the insurance producer is licensed and authorized to sell the following
products:
(i) fixed annuities;
(ii) fixed indexed annuities;
(iii) variable annuities;
(iv) life insurance;
(v) mutual funds;
(vi) stocks and bonds; and
(vii) certificates of deposit;
(c) an affirmative statement describing
the insurers for which the insurance producer is authorized, contracted or
appointed, or otherwise able to sell insurance products, using the following
descriptions:
(i) from one insurer;
(ii) from two or more insurers; or
(iii) from two or more insurers although
primarily contracted with one insurer;
(d) a description of the sources and
types of cash compensation and non-cash compensation to be received by the
insurance producer, including whether the insurance producer is to be
compensated for the sale of a recommended annuity by commission as part of a
premium or other remuneration received from the insurer, intermediary or other
insurance producer or by a fee as a result of a contract for advice or consulting
services; and
(e) a notice of a consumer’s or
consumer’s representative’s right to request additional information regarding
cash compensation that discloses:
(i) a reasonable estimate of the amount
of cash compensation to be received by the insurance producer, which may be
stated as a range of mounts or percentages; and
(ii) whether the cash compensation is a
one-time or multiple occurrence amount, and if a multiple occurrence amount,
the frequency and amount of the occurrence, which may be stated as a range of
amounts or percentages.
(3) Conflict
of interest obligation. An insurance
producer shall identify and avoid or reasonably manage and disclose material
conflicts of interest, including material conflicts of interest related to an
ownership interest.
(4) Documentation obligation. At the time of recommendation or sale an
insurance producer shall:
(a) make a written record of any
recommendation and the basis for the recommendation subject to this rule;
(b) obtain a consumer signed statement on
a form substantially similar to Appendix B located at
the end of this rule documenting:
(i) a consumer’s refusal to provide the
consumer profile information, if any; and
(ii) a consumer’s understanding of the
ramification of not providing their consumer profile information or providing
insufficient consumer profile information; and
(c) obtain a consumer signed statement on
a form substantially similar to Appendix C
acknowledging that the annuity transaction is not recommended if a consumer
decides to enter into an annuity transaction that is not based on the insurance
producer’s recommendation.
B. Application of the best interest obligation. Any requirement applicable to an insurance
producer under this section shall apply to every insurance producer who has
exercised material control or influence in the making of a recommendation and
has received direct compensation as a result of the recommendation or sale,
regardless of whether the insurance producer has had any direct contact with
the consumer. Activities such as
providing or delivering marketing or educational material, product wholesaling
or other back-office product support and general supervision of an insurance
producer do not, in and of themselves, constitute material control or
influence.
C. Transactions not based on a recommendation.
(1) Except as provided in this rule, an
insurance producer shall have no obligation to a consumer under the care
obligation related to any annuity transaction if:
(a) no recommendation is made;
(b) a recommendation was made and was
later found to have been prepared based on materially inaccurate information
provided by the consumer;
(c) a consumer refuses to provide
relevant consumer profile information and the annuity transaction is not
recommended; or
(d) a consumer decides to enter into an annuity transaction that is not based on a
recommendation of the producer.
(2) An insurer’s issuance of an annuity
under the above conditions shall be reasonable under all circumstances known to
the insurer at the time the annuity is issued.
D. Supervision system.
(1) Except as permitted in circumstances
of transactions not based on a recommendation, an insurer may not issue an
annuity recommendation to a consumer unless there is a reasonable basis to believe
the annuity would effectively address the consumer’s financial situation,
insurance needs and financial objectives based on the consumer’s profile information.
(2) An insurer shall establish and
maintain a supervision system that is reasonably designed to achieve the
insurer’s and its insurance producers’ compliance with this rule, including,
but not limited to developing and implementing the following:
(a) procedures to inform its insurance
producers of the requirements of this rule and incorporate the requirements of this
rule into relevant insurance producer training manuals;
(b) product-specific training and
training materials which explain all material features of its annuity products and
requirements of this rule to its insurance producers;
(c) procedures for the review of each recommendation
prior to issuance of an annuity that are designed to ensure there is a
reasonable basis to determine that the recommended annuity would effectively
address the consumer's financial situation, insurance needs and financial
objectives. Such review procedures may apply a screening system to identify
selected transactions for additional review and may be accomplished electronically or through
other means including, but not limited to, physical review. Such an
electronic or other system may be designed to require additional review only of
those transactions identified for additional review by the selection criteria;
(d) reasonable procedures to detect recommendations
that are not in compliance with this rule. This may include, but is not limited
to, confirmation of the consumer’s consumer profile information, systematic consumer
surveys, insurance producer and consumer interviews, confirmation letters, insurance
producer statements or attestations and programs of internal monitoring and
sampling procedures and may be accomplished after the issuance or delivery of
an annuity;
(e) reasonable procedures to assess, prior to or upon issuance or delivery of an annuity, whether an insurance producer has provided to the consumer the information required by this rule;
(f) reasonable procedures to identify and address suspicious consumer refusals to provide consumer profile information; and
(g) reasonable procedures to identify and eliminate any sales contests, sales quotas, bonuses, and non-cash compensation that are based on the sales of specific annuities within a limited time period. The requirements of this rule are not intended to prohibit the receipt of health insurance, office rent, office support, retirement benefits or other employee benefits by employees as long as those benefits are not based upon the volume of sales of a specific annuity within a limited time period.
(3) An insurer shall annually provide a written report to senior management, including to the senior manager responsible for audit functions, which details a review, with appropriate testing, reasonably designed to determine the effectiveness of the supervision system, the exceptions found, and corrective action taken or recommended, if any.
(4) Nothing in this rule restricts an insurer from contracting for the performance of a function (including maintenance of procedures). An insurer shall take appropriate corrective action and may be subject to sanctions and penalties pursuant to Section 59A-1-18 NMSA 1978 regardless of whether the insurer contracts for performance of a function and regardless of the insurer’s compliance with this rule.
(5) An insurer’s supervision system shall include supervision of contractual performance. This includes, but is not limited to the following:
(a) monitoring and, as appropriate, conducting audits to assure that the contracted function is properly performed; and
(b) annually obtaining a certification from a senior manager who has responsibility for the contracted function that the manager has a reasonable basis to represent, and does represent, that the function is properly preformed.
(6) An insurer is not required to include the following in its supervision system:
(a) an insurance producer's recommendations to a consumer of products other than the annuities offered by the insurer; and
(b) consideration of or comparison to options available to the insurance producer or compensation relating to those options other than annuities or other products offered by the insurer.
E. Prohibited practices. Neither an insurance producer nor an insurer shall dissuade, or attempt to dissuade a consumer from:
(1) truthfully responding to an insurer’s request for confirmation of the consumer profile information;
(2) filing a complaint; or
(3) cooperating with the investigation of a complaint.
F. Safe harbor. Recommendations and sales of annuities made in compliance with comparable standards shall satisfy the requirements of this rule. This provision applies to all recommendations and sales of annuities made by financial professionals in compliance with business rules, controls and procedures that satisfy a comparable standard even if such standard would not otherwise apply to the product or recommendation at issue.
(1) This provision shall not limit the superintendent’s ability to investigate and enforce the provisions of this rule.
(2) This provision shall not limit the insurer’s obligation to comply with this rule, although the insurer may base its analysis on information received from either the financial professional or the entity supervising the financial professional.
(3) For this safe harbor to apply, an insurer shall:
(a) monitor the relevant conduct of the financial professional seeking to rely on safe harbor, or the entity responsible for the supervision of the financial professional, such as the financial professional’s broker-dealer or an investment adviser registered under the federal or state securities laws using information collected in the normal course of business; and
(b) provide to the entity responsible for supervising the financial professional seeking to rely on this safe harbor, such as the financial professional’s broker-dealer or investment-adviser registered under federal or state securities laws, information and reports that are reasonably appropriate to assist such entity to maintain its supervision system.
[13.9.20.9 NMAC –
N, 10/1/2022]
13.9.20.10 INSURANCE
PRODUCER TRAINING:
A. An insurance producer shall 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. An insurance producer may rely on insurer-provided product-specific training standards and materials to comply with this rule.
(1) An insurance producer who engages in the sale of annuity products shall complete a one-time four-credit training course approved by OSI and provided by an OSI-approved education provider.
(2) An insurance producer who holds a
life insurance line of authority on the effective date of this rule and who
desires to sell annuities shall complete the requirements of this section
within six months of the effective date of this rule. An insurance producer who
obtains a life insurance line of authority on or after the effective date of this
rule may not engage in the sale of annuities until the required annuity
training course has been completed.
(3) The minimum length of the training required under this rule shall be sufficient to qualify for at least four CE credits but may be longer.
(4) The training required under this rule shall include information on the following topics:
(a) the types of annuities and various classifications of annuities;
(b) identification of the parties to an annuity;
(c) how product-specific annuity contract features affect consumers;
(d) the application of income taxation of qualified and non-qualified annuities;
(e) the primary uses of annuities; and
(f) appropriate standards of conduct, sales practices, replacement and disclosure requirements.
(5) A provider of courses intended to comply with this Section shall cover all topics listed in the prescribed outline and shall not present any marketing information or provide training on sales techniques or provide specific information about a particular insurer’s products. Additional topics may be offered in conjunction with and in addition to the required outline.
(6) A provider of an annuity training course intended to comply with this rule shall register as a CE provider in this state and shall comply with the rules and guidelines applicable to insurance producer continuing education courses as set forth in Section 59A-12-26 NMSA 1978 and 13.4.7 NMAC.
(7) An insurance producer who has completed an annuity training course approved by OSI prior to the effective date of this rule shall, within six months of the effective date of this rule, complete either:
(a) a new four-credit training course approved by OSI after the effective date of this rule; or
(b) An additional one-time, one-credit training course approved by OSI and provided by an OSI-approved education provider on appropriate sales practices, replacement and disclosure requirements under this rule.
(8) Annuity training courses may be conducted and completed by classroom or self-study methods in accordance with Section 59A-12-26 NMSA 1978 and 13.4.7 NMAC.
(9) A provider of annuity training shall comply with the reporting requirements and shall issue certificates of completion in accordance with Section 59A-12-26 NMSA 1978 and 13.4.7 NMAC.
(10) Satisfaction of the training requirements of another state that are substantially similar to the provisions of this rule shall be deemed to satisfy the training requirements of this rule.
(11) Satisfaction of the components of the training requirements of any course or courses with components substantially similar to the provisions of this rule shall be deemed to satisfy the training requirements of this rule.
(12) An insurer shall verify that an insurance producer has completed the annuity training course required by this rule before allowing the insurance producer to sell an annuity product for that insurer. An insurer may satisfy its responsibility under this rule by obtaining certificates of completion of the training course or obtaining reports provided by OSI-sponsored database systems or vendors or from a reasonably reliable commercial database vendor that has a reporting arrangement with approved insurance education providers.
[13.9.20.10 NMAC –
N, 10/1/2022]
13.9.20.11 RECORD
KEEPING:
A. An insurer, general agent, independent agency or insurance producer shall maintain and make available to OSI, upon request, records of the information collected from the consumer, disclosures made to the consumer, including summaries of oral disclosures, and other information used in making the recommendations that were the basis for each insurance transaction for five years after the insurance transaction is completed by the insurer. An insurer is permitted, but shall not be required, to maintain documentation on behalf of an insurance producer.
B. Records required to be maintained by this rule may be maintained in any form that accurately reproduces the actual document.
[13.9.20.11 NMAC –
N, 10/1/2022]
13.9.20.12 COMPLIANCE
MITIGATION; PENALTIES; ENFORCEMENT:
A. An insurer is responsible for compliance with this rule. If a violation occurs, either because of the action or inaction of the insurer or its insurance producer, the superintendent may order:
(1) an insurer to take reasonably appropriate corrective action for any consumer harmed by a failure to comply with this rule by the insurer, an entity contracted to perform the insurer’s supervisory duties or by an insurance producer;
(2) a general agency, independent agency or an insurance producer to take reasonably appropriate corrective action for any consumer harmed by an insurance producer’s violation of this rule; and
(3) appropriate penalties and sanctions.
B. Any applicable penalty under Section 59A-1-18 NMSA 1978 for a violation of this rule may be reduced or eliminated according to a schedule adopted by the superintendent if corrective action for the consumer was taken promptly after a violation was discovered or the violation was not part of a pattern or practice.
APPENDIX
A
CONSUMER
DISCLOSURE
CONSUMER INFORMATION
First Name:
_____________________________________ Last Name:
____________________________________
INSURANCE PRODUCER
INFORMATION
First Name: _____________________________________
Last Name: ____________________________________
Business/Agency
Name: ________________________________________ Website:
_________________________
Business/Mailing
Address: _______________________________________________________________________
Business Telephone
Number: ____________________________ Email Address:
____________________________
National Producer
Number (“NPN”) ____________________________ Domicile State:
______________________
What Types of
Products Can I Sell You?
I am licensed to
sell annuities to You in accordance with state law. If I recommend that You buy an annuity, it
means I believe that it effectively meets Your financial situation, insurance
needs and financial objectives. Other financial products, such as life
insurance or stocks, bonds and mutual funds may also meet Your needs.
I offer the
following products:
Fixed
or Fixed Indexed Annuities
Variable
Annuities
Life
Insurance
I need a separate
license to provide advice about or to sell non-insurance financial
products. Below, I have checked any
non-insurance financial products that I am licensed and authorized to provide
advice about or to sell.
Mutual
Funds
Stocks/Bonds
Certificates
of Deposit
Whose Annuities
Can I Sell to You?
I am authorized to
sell:
Annuities
from only one insurer
Annuities
from two or more insurers
Annuities
from two or more insurers, although I primarily sell annuities from:
_______________________
How I am Paid for
My Work?
It is important
for You to understand how I am paid for my work. Depending on the particular
annuity You purchase, I may be paid a commission or a fee. Commissions are generally paid to Me by the insurer
while fees are generally paid to Me by the Consumer (You). If You have questions about how I am paid,
please ask Me.
Depending on the annuity
You buy, I will or may be paid cash compensation as follows:
Commission,
which is usually paid by the insurer or other sources. If other sources, they
come from: _______________________________.
Fees
(such as a fixed amount, an hourly rate, or a percentage of Your payment),
which are usually paid directly by the Consumer.
Other:
____________________________________________________________________________.
If you have
questions about the above compensation I will be paid for this transaction,
please ask me.
I may also receive
other indirect compensation resulting from this transaction (sometimes called
“non-cash” compensation), such as health or retirement benefits, office rent
and support, or other incentives from the insurer or other sources.
By signing below, You
acknowledge that You have read and understand the information provided to You
in this document.
__________________________________________
Consumer Signature
______________________
Date
__________________________________________
Insurance Producer
Signature
______________________
Date
APPENDIX
B
CONSUMER
REFUSAL TO PROVIDE INFORMATION
Do
Not Sign Unless You Have Read and Understand the Information in this Form
Why are You being given this form?
You are buying a
financial product: an annuity.
To recommend a
product that effectively meets Your needs, objectives and situation, the agent,
broker or insurer needs information about You, Your financial situation,
insurance needs and financial objectives.
If You sign this
form, it means You have not given the agent, broker or insurer some or all the
information needed to decide if the annuity effectively meets Your needs,
objectives and situation. You may lose
protections under the New Mexico Insurance Code if You sign this form or
provide inaccurate information.
Statement of
Purchaser:
·
I
REFUSE to provide this information at this time.
·
I
have chosen to provide LIMITED information at this time.
__________________________________________
Consumer Signature
______________________
Date
APPENDIX
C
Consumer
Decision to Purchase an Annuity NOT Based on a Recommendation
Do
Not Sign This Form Unless You Have Read and Understand It.
Why are You being given this form?
You are buying a
financial product: an annuity.
To recommend a
product that effectively meets Your needs, objectives and situation, the agent,
broker or insurer has the responsibility to learn about You, your financial
situation, insurance needs and financial objectives.
If You sign this
form, it means You know that you are buying an annuity that was not
recommended.
Statement of
Purchaser:
I understand that
I am buying an annuity, but the agent, broker or insurer did not recommend that
I buy it. If I buy it without a recommendation, I understand I may lose
protections under the New Mexico Insurance Code.
__________________________________________
Consumer Signature
______________________
Date
__________________________________________
Insurance Producer
Signature
______________________
Date
History of 13.9.20 NMAC: [RESERVED]