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ARIZONA STATE SENATE
Fifty-Fourth Legislature, First Regular Session
fixed-index annuities; disclosure; indexing
Purpose
Provides use and retention requirements for documents relating to sales of a fixed-index annuity.
Background
Current
statute requires that if an application for an annuity contract is taken in a
face-to-face meeting, the applicant, at or before the time of application,
shall be given both the disclosure document and the buyer's guide in the form
prescribed by the Director of the Department of Insurance (A.R.S.
§ 20-1242.02).
If the application for an annuity contract is taken by means other than in a face-to-face meeting, the applicant shall be sent both the disclosure document and the buyer's guide no later than 5 business days after the completed application is received by the insurer.
That statute also requires that a solicitation for an annuity contract provided in other than a face-to-face meeting shall include a statement that the proposed applicant may contact the insurer for a free annuity buyer's guide. If the buyer's guide and disclosure document are not provided at or before the time of application, a free look period of at least 15 days shall be provided for the applicant to return the annuity contract without penalty. This free look period shall run concurrently with any other free look period provided under statute.
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Requires an insurer and an insurance producer selling a fixed-index annuity, in the case of a face-to-face meeting, to retain copies of the disclosure document, illustrations and the buyer's guide and all other forms of advertising for the duration of the fixed-index annuity or 10 years, whichever is shorter.
2. Prohibits an index from being used to illustrate the fixed-index annuity account value if that index used to determine a fixed-index annuity account value has not existed for at least 10 calendar years.
3. Requires the illustration for a fixed-index annuity to be labeled with the date on which it is prepared and signed by the consumer.
4. Makes technical changes.
5. Becomes effective on the general effective date.
Prepared by Senate Research
February 18, 2019
CS/kja