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REFERENCE TITLE: annuity transactions; training requirements |
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State of Arizona House of Representatives Fifty-third Legislature First Regular Session 2017
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HB 2160 |
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Introduced by Representative Livingston
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AN ACT
amending section 20‑1243, Arizona Revised Statutes; Amending title 20, chapter 6, article 1.3, Arizona Revised Statutes, by adding section 20‑1243.07; relating to annuity transactions.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 20-1243, Arizona Revised Statutes, is amended to read:
20-1243. Definitions
In this article, unless the context otherwise requires:
1. "Annuity" means a fixed or variable an annuity that is individually solicited, whether the product is classified as an individual or group annuity.
2. "Business entity" has the same meaning prescribed in section 20‑281.
3. "Insurance producer" has the same meaning prescribed in section 20‑281.
4. "Insurer" has the same meaning prescribed in section 20-104.
5. "Managing general agent" has the same meaning prescribed in section 20-311.
6. "Recommendation" means advice provided by an insurance producer, or an insurer if no producer is involved, to an individual consumer that results in a purchase or exchange of an annuity pursuant to that advice.
Sec. 2. Title 20, chapter 6, article 1.3, Arizona Revised Statutes, is amended by adding section 20-1243.07, to read:
20-1243.07. Insurance producer training; annuities; continuing education
A. An insurance producer may 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 subsection.
B. An insurance producer who engages in the sale of annuity products shall complete a onetime four credit training course approved by the department of insurance and provided by a department of insurance approved education provider. Insurance producers who hold a life insurance line of authority on the effective date of this section and who desire to sell annuities shall complete the requirements of this subsection within six months after the effective date of this section. Individuals who obtain a life insurance line of authority on or after the effective date of this section may not engage in the sale of annuities until the annuity training course required by this subsection has been completed.
C. The minimum length of the training required under subsection B of this section shall be sufficient to qualify for at least four continuing education credits, but may be longer. The training required under subsection B of this section shall include information on the following topics:
1. The types of annuities and various classifications of annuities.
2. Identification of the parties to an annuity.
3. How product specific annuity contract features affect consumers.
4. The application of income taxation of qualified and nonqualified annuities.
5. The primary uses of annuities.
6. Appropriate sales practices, replacement and disclosure requirements.
D. A Provider of an annuity training course intended to comply with this section shall cover all topics listed in subsection C of this section and may not present any marketing information, 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 topics listed in subsection C of this section. A provider of an annuity training course intended to comply with this section shall register as a continuing education provider in this state and shall comply with the rules and guidelines applicable to insurance producer continuing education courses required by chapter 18 of this title. A Provider of an annuity training course shall comply with the reporting requirements and shall issue a certificate of completion in accordance with chapter 18 of this title.
E. Annuity training courses may be conducted and completed by classroom or self‑study methods in accordance with chapter 18 of this title and any rules of the department. Satisfactory completion of the training requirements of another state that are substantially similar to the provisions of this section satisfy the training requirements of this section.
F. An insurer shall verify that an insurance producer has completed the annuity training course before allowing the producer to sell an annuity product for that insurer. An insurer may satisfy its responsibility under this subsection by obtaining certificates of completion of the annuity training course or obtaining reports provided by department‑sponsored database systems or vendors or from a reasonably reliable commercial database vendor that has a reporting arrangement with approved insurance education providers.