Life Only, Chapter 6 - F. Sales and Marketing of Life and Annuities

Senior specific certifications may be used if they do not primarily apply to sales or marketing, and if accredited by:

- American National Standards Institute (ANSI) - National Commission of Certifying Agencies - Any org recognized by US Department of Education

It is an unfair practice for an insurance producer to use a senior-specific certification (or professional designation) that leads the applicant to believe that the producer has special training. Prohibited use of senior specific certifications include:

- a certification by a producer who has not actually earned such certification - a nonexistent certification - certification that implies a level of education (experience) that the producer does not have - a certification from an org that: > primarily engaged in the business of instruction in marketing > does not have reasonable standards for monitoring its clients for improper conduct > does not have reasonable continuing education requirements for its clients

Prior to the execution of any contract for the purchase or exchange of an annuity, the insurance producer must make every reasonable effort to obtain the following info to determine that such transaction is suitable for the consumer based on the following factors:

- age - annual income & existing assets - financial status & experience - tax status - investment objectives - risk tolerance - any additional info that the producer believes is needed to ascertain the consumers current suitability

Noncompliance with the senior specific certifications regulation may result, after proper notice and hearing, in the imposition of any of the sanctions made available in the CO statutes pertaining to the business of insurance or other laws which include any or all of the following:

- fines - issuance of cease and desist orders - suspensions or revocation of license

Life insurance companies doing business in CO may not issue or deliver any life insurance policies that contain provisions that ...............

- forfeit the policy for failure to repay any loan on the policy, or to pay interest on such loan if the total amount owed on the policy is less than the loan value itself - limit the time within which any action may be initiated to less than 5 years after the cause of actions occurs - cause the policy to be issued or to take effect more than 1 year before the original application for the insurance was made (backdating), if doing so would rate the insured at an age not more than 1 year younger than his or her age at the date when application was made, according to his age at nearest birthday

At a minimum, all disclosure documents for annuity contracts provided by the insurer must include:

- generic name of the contract, company name, if different, any form number used by the insurer, and the fact that is an annuity - insurers name and address - description of the contract and its benefits, emphasizing it long-term nature, including examples where appropriate of contract specifications regarding guarantees, credit rates, surrender options, withdrawal options, riders, possible penalties, tax provisions - specific dollar amounts or percentages as they apply to contract provsions - info about the current guaranteed rate and a clear notice that rates are subject to change

The following are the training requirements for producers who sell annuities:

- initial, one-time 4-hour training course on annuities - 4 hours of continuing education on annuities every renewal period thereafter

Advertisement cannot use any terms that may lead the consumer to believe that he or she will receive any benefit not available to other persons of the same class and equal life expectancy. The following terms are considered misleading:

- investment - investment plan - founders plan - charter plan - deposit - expansion plan - profits - profit sharing - interest plan - savings plan - private pension plan - retirement plan - risk-free, and similar

An insurance producer has no obligation to assure that a recommendation is suitable for the consumer if, after attempting to gather the needed info to determine suitability, the consumer:

- refuses to provide relevant info requested by the insurer or producer - decides to enter into an insurance transaction that is not based on a recommendation provided by the insurance producer - fails to provide complete or accurate info

For annuities in the payout period with changes in non guaranteed elements, and for the accumulation period of a deferred annuity, the insurer must provide each contract owner an annual report that contains the following info:

- the beginning and ending date for the report - accumulation and cash surrender value at the end of the previous reporting period and the current reporting period - total amounts that have been credited, charged to, or paid out of the contract during the current period - amounts of any outstanding loans as of the end of the current reporting period

Backdating is no more than ___ year

1

When the buyer's guide and disclosure statement are not provided at or before the time of application, the applicant is entitled to a free-look period of at least _____. This free-look period will run concurrently with any other free-look period provided under state laws or regulations

15 days

When application for an annuity contract is face-to-face with the consumer, the producer must give all required disclosure documents at or before the time of ___________________. In any other case, the producer must provide such documents no later than _____ business days after the completion and receipt of the application

application; 5

When an insurance producer receives an app for an annuity contract, the producer must give the applicant a copy of the __________________ document and a copy of the approved _______________________________

approved disclosure; Buyer's Guide to Fixed Deferred Annuities

Noncompliance with the regulations on suitability in annuity transactions may result in correction action by the Commissioner:

cease and desist order, and license suspension or revocation

All info that is required by law to be disclosed to a prospective buyer must be presented in such a way that all material info and illustrations are _________________________

easily interpreted

The purpose of the regulation on advertising and sales promotion of life insurance and annuities is to.............

establish minimum standards and guidelines to ensure a full and truthful disclosure to the public of info about life products

All ads, literature, and statements made concerning non guaranteed features of a policy must be clearly made in such a way that the prospective buyer recognizes that those features are not _________________________

guaranteed

All advertisements, regardless of who wrote, created, or presented them, are the responsibility of the _____________ whose policies are advertised. All ads must be maintained on file for a period of ____ years after discontinuance of its use of publication

insurer; 5

Illustrations or benefits payable under any variable life policy or variable annuity may not include projections of past ______________________ into the future or attempted predictions of __________ investment experience

investment experience; future

Ads for life policies and annuities must not use as the name or title of a policy or contract any phrase that does not include the words ________________ or _______________ unless accompanied by other clear language indicating that it is that type of contract

life insurance; annuity

A life insurer ___________ exclude or limit coverage of specific legal travel, or charge a differential rate for such coverage, when differences in risk or exposure have been substantiated by the use of relevant data from at least one independent reliable source.

may

A life insurance company doing business in CO _____________ refuse to insure or to continue to inure, may not _________ the amount or type of coverage available, and _____________ charge different rate for the same coverage to applicants solely for reasons associated with an applicant's or insured's past or future lawful foreign travle

may not; limit; may not

When any non-guaranteed feature is mentioned in advertising, it must indicate that the insurer reserves the right to...................

modify or cancel any such element at any time in the future and for any reason

When any nonguaranteed feature is mentioned in advertising, it must indicate that the insurer reserves the right to................

modify or cancel any such element at any time in the future and for any reason

Time period for legal action -

not less than 5 years after the cause of action occurs

In determining whether the producer has used a misleading designation or certification, the Commissioner will consider the manner in which the following terms are used and combined:

senior, retirement, elder, certified, registered, chartered, advisor, specialist, consultant, planner