State SealARIZONA HOUSE OF REPRESENTATIVES

 

SB 1534: fixed-index annuities; disclosure; indexing

NOW: annuity disclosure; rules

PRIME SPONSOR: Senator Brophy McGee, LD 28

BILL STATUS: House Engrossed

                               

 

Overview

☐ Prop 105 (45 votes) ☐ Prop 108 (40 votes) ☐ Emergency (40 votes) ☐ Fiscal NoteRequires the Department of Insurance (ADOI) to adopt rules relating to annuity disclosure.

History

The National Association of Insurance Commissioners (NAIC) is the U.S. standard-setting and regulatory support organization created and governed by the chief insurance regulators from each of the 50 states.

The Annuity Disclosure Model Regulation, as adopted by the NAIC, provides standards for the disclosure of certain minimum information about annuity contracts to protect consumers and foster consumer education. The regulation specifies the minimum information which must be disclosed, the method for disclosing it and the use and content of illustrations, if used, in connection with the sale of annuity contracts. The goal of this regulation is to ensure that purchasers of annuity contracts understand certain basic features of annuity contracts.

Applicants for an annuity contract are required to be given both the disclosure document and the buyer's guide as prescribed by the director of ADOI provided the application is taken in a face-to-face meeting.

Statute outlines information that, at a minimum, must be included in the disclosure document.  Such information includes: 1) the generic name of the contract and the company product name, 2) the insurer's name and address, 3) a description of the contract and its benefits, 4) the guaranteed, nonguaranteed and determinable elements of the contract, and 5) an explanation of the initial crediting rate, the duration of the rate, and the fact that rates may change. (A.R.S. § 20-1242.02)

Provisions

1.       Instructs ADOI to adopt rules relating to:

a.       The NAIC's Annuity Disclosure Model Regulation, and

b.       Illustration requirements specific to participating immediate and deferred income annuities. (Sec. 1)

2.       Requires the adoption of rules to be made within one year after the effective date of this act. (Sec. 1)

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4.        

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6.       Fifty-fourth Legislature                       SB 1534

7.       First Regular Session                            Version 3: House Engrossed

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