The Florida Department of Financial Services ("DFS") announced changes to its proposed suitability rule - Rule 69B-162.011 and the two forms adopted by the Proposed Rule - the "Annuity Suitability Questionnaire" form and the "Disclosure and Comparison of Annuity Contracts" form (the "Forms"). The proposed Rule and Forms implement Florida Statutes Section 627.4554, which imposes more stringent suitability and replacement requirements on the sale of annuities to consumers age 65 or older.
While changes were made to the Forms purportedly addressing concerns raised on the Forms at the public hearing held on June 16, 2009, the changes do not appear to address the global comments raised at the June 16th hearing, which we reported on in our previous Alert . The two main changes are: (i) requiring consumers to sign only one page of the respective Forms and allowing consumers to initial the other pages; and (ii) modification of the questions in the Annuity Suitability Questionnaire form on the consumer's anticipated medical expense and income to pay for medical expenses to clarify that the questions only cover "out-of-pocket" medical expenses. Additional minor changes were also made.
The proposed Rule was changed to delete the text that appeared to require the use of the Forms effective January 1, 2009. Also a statement as to where the Forms could be obtained was added to the proposed Rule.
Changes to the Forms were made in two separate Notices of Change, one published on August 14, 2009 and another published on August 21, 2009. The changes to the Forms described above were made in the August 14, 2009 Notice of Change. Changes to the proposed Rule and one other minor change to the "Disclosure and Comparison of Annuity Contracts" form were made in the Notice of Change published on August 21, 2009.
The publication of each Notice of Change triggers a 21-day challenge period on the changes. If no challenges are raised, DFS will adopt the proposed Rule and the Forms, and we have been advised that they will become effective 60 days after the adoption date.