Success Continuing Annuities

Where a policy replacement is involved, the existing insurer is required to retain all replacement notifications received for at least:

5 years

Many annuities allow the withdrawal of _____ of the contract value per year without a surrender charge.

5-10% per year

Generally, the contract owner may change the annuitant at any time provided the new annuitant was _______ at the time the contract was originally written.

Alive

The revisions to NAIC Suitability in Annuity Transactions Model Regulation (#275) include a new "________" Standard.

Best Interest

The maximum rate of interest the annuity will earn regardless of the performance of the index is the ________ rate.

Cap

Utilization of the bailout clause can occur if the interest rate credited to the annuity:

Escape clause, drops more than 1.2% below the guaranteed rate.

The taxable portion of annuity distributions or withdrawals will be taxed as:

Ordinary income only

Interest credited to an annuity may be subject to a percentage of the index gain during the index period, which is called the:

Participation Rate

Interest credited to an annuity may be subject to a maximum rate of interest, which is called the:

Rate cap

FINRA Rule 2111 identifies which three main suitability obligations?

Reasonable basis, customer specific and quantitative suitability.

SEC Reg BI is known as the ________; and FINRA Rule 2111 is known as the ________.

Suitability Standard; Best Interest Rule

The enhanced Model Regulation includes a new best interest standard of care that producers and insurers can meet if they satisfy ALL of the following requirements:

a Care Obligation, a Disclosure Obligation, a Material Conflict of Interest Obligation, and a Documentation Obligation.

The investments that the insurer is buying today are known as the _______ money rate.

guaranteed

The minimum interest rate that is guaranteed for the life of an annuity is known as the _______ rate.

lifetime guaranteed.

The revisions to NAIC Suitability in Annuity Transactions Model Regulation (#275) requires agents and carriers to act with "________" in making recommendations.

reasonable diligence, care and skill

The investments the insurer bought when the annuity was originally purchased as known as the _______ rate.

renewal

The SEC's Regulation Best Interest (Reg BI) is effective as of:

the broker-dealer entity

Long-term point-to-point indexing works like annual point-to-point indexing EXCEPT:

the indexing period is longer than one policy year.

In determining whether a combination of words constitutes a professional designation implying that person has special certification in servicing seniors include the use of one or more words such as "senior," "advisor," "specialist," "elder," etc., are considered in addition to:

the manner in which those words are combined.

FINRA Rules 2310, 2320, 2341, and 5110 each include provisions restricting the payment and receipt of non-cash compensation in connect with the sale and distribution of securities. In general, these rules limit non-cash compensation arrangements to gifts that do not exceed ________ in value.

100$

As set forth in Reg BI's explanation, to satisfy the Care Obligation, the broker-dealer will have to satisfy, at a minimum:

ALL of the elements of FINRA Rule 2111.

A type of annuity in which the surrender charge period and the interest guarantee period are equal in length is called a "________" annuity.

CD-type

Which of the following annuities do not fluctuate in value?

Fixed Annuity

_______ is the act of inducing or attempting to induce a policyowner to drop an existing insurance policy or contract to take another policy or contract that is substantially the same by using misrepresentations or incomplete comparisons of the two policies.

Twisting

The annuity "account value" is the:

annuity's initial premium payment.

The most common bonus paid on an annuity is where the premiums earn higher interest:

for the first year of the contract.

FINRA amended Rule 2111 to state that it will:

to state that it will not apply to recommendations subject to Reg BI, and to remove the element of control from the quantitative suitability obligation.

According to the NAIC Annuity Disclosure Model Regulation, the uses of unearned certifications or professional designations are considered ________ in the business of insurance.

unfair and deceptive acts or practices

According to the NAIC Annuity Disclosure Model Regulation, where the Buyer's Guide and disclosure document are not provided at or before the time of application, a free look period of no less than ________ must be provided.

15 days

Firms are required to maintain a copy of each Form CRS on record for at least:

6 years

If a broker-dealer is required to comply with both Reg BI and Rule 2111 regarding a recommendation to a retail customer, compliance with Reg BI would result in compliance with Rule 2111. Why?

Because a broker-dealer that meets the best interest standard would necessarily meet the suitability standard.

"The ethical requirement that people who care for others will do so in good faith, placing their assessment of that person's best interests above their own" refers to the:

Best Interest Standard

SEC Reg BI's ________ Obligation requires broker-dealers to establish, maintain, and enforce written policies and procedures reasonably designed to identify and eliminate such things as sales contests, quotas and bonuses.

Conflict of Interest

What are the three basic phases in the life of an annuity?

Contribution, Accumulation, and Distribution

The ________ states that the annuity will be credited with a minimum rate of return regardless of index performance and is usually guaranteed to never fall below zero.

Floor rate

What is the basic premise of the annuity first year bonus?

It is used as an inducement to move large blocks of money into an annuity.

Which of the following settlement options provides payments that are guaranteed during the lifetime of two people?

Joint Life

23 _______ refers to the strict financial requirements that must be met by an insurance company to protect the money paid in by all policyholders.

Legal serve

Payments stop at the death of the annuitant in a _______ settlement option.

Life only

While life insurance provides protection against dying too soon, annuities provide protection against:

Living to long

The indexing strategy that takes the index gains and losses into account on a monthly basis is the ________ indexing method.

Monthly Point-to-Point

Any person directly involved in the selling and marketing of annuities must carry an active life insurance license, plus a _______ if dealing with variable contracts.

Securities license

The annuity's initial participation rate depends on:

When the application was received.

The annuity "contract value" is the:

cash value of the annuity.

If you are a dually registered financial professional who is making an account recommendation to a retail customer, whether Reg BI or the Advisers Act applies depends on which factor?

the capacity in which you are acting when making the recommendation.

All of the following are examples of twisting, EXCEPT:

the intentional incorrect recording of an answer.