On May 22, 2009, a notice of proposed rulemaking to adopt new Rule 69B-162.011 was published. This proposed Rule implements the suitability and replacement forms referenced in Florida Statutes Section 627.4554. For any recommendation of an annuity to a senior, Section 627.4554 requires that there must be an objectively reasonable basis for believing that the recommendation is suitable based on specific information that the agent (or the insurer if no agent is involved) must make reasonable efforts to obtain from the senior consumer on a form adopted by the Department of Financial Services. Section 627.4554 also requires that senior consumers be provided with specific information comparing the annuities involved in a replacement or exchange transaction on a form adopted by the Department. Other than the use of the Department adopted forms, insurers, as well as agents, must have begun complying with Section 627.4554 beginning on January 1, 2009.

The new Rule adopts the Annuity Suitability and Disclosure and Comparison forms previously proposed by the Department in January 2009. The new Rule also:

  • Exempts annuity sales that are subject to FINRA’s suitability rules from the requirement of using the Annuity Suitability form.
  • Permits insurers to adapt the Annuity Suitability form or the Disclosure and Comparison form for their own use upon written approval from the Department.
  • Specifies the conditions under which the Department would approve insurer adapted forms.

The Department has no intent to hold further hearings on the proposed Rule unless a request for a hearing is made in writing on or before June 12, 2009. If requested, the hearing will be held on June 16, 2009, at 9:30 a.m. If not, the Department has informally advised us that it expects the Rule will be adopted in mid-June, and take effect in mid-August.