211 CMR 96.04 - Definitions

Current through Register 1466, April 1, 2022

Annuity means a fixed annuity or variable annuity that is individually solicited, whether the product is classified as an individual or group annuity.

Commissioner means the Commissioner of Insurance appointed pursuant to M.G.L. c. 26, § 6.

Continuing Education Credit or CE Credit means a continuing education credit as required by M.G.L. c. 175, § 177E and 211 CMR 50.00: Continuing Education for Insurance Producers.

Continuing Education Provider or CE Provider means an individual or entity that is approved to offer continuing education courses pursuant to M.G.L. c. 175, § 177E and 211 CMR 50.00: Continuing Education for Insurance Producers.

FINRA means the Financial Industry Regulatory Authority or a succeeding agency.

Insurance Producer means a person required to be licensed under the laws of Massachusetts to sell, solicit or negotiate insurance, including annuities.

Insurer means a company required to be licensed under the laws of Massachusetts to provide insurance products, including annuities.

Person means any individual, corporation, association, partnership, limited liability company, limited liability partnership or other legal entity.

Recommendation means advice provided by an insurance producer, or an insurer where no producer is involved, to an individual consumer that results in a purchase, exchange or replacement of an annuity in accordance with that advice.

Replacement means a transaction in which a new policy or contract is to be purchased, and it is known or should be known to the proposing producer, or to the proposing insurer if there is no producer, that by reason of the transaction, an existing policy or contract has been or is to be:

(a) Lapsed, forfeited, surrendered, partially surrendered, assigned to the replacing insurer or otherwise terminated;

(b) Converted to reduced paid-up insurance, continued as extended term insurance, or otherwise reduced in value by the use of nonforfeiture benefits or other policy values;

(c) Amended so as to effect either a reduction in benefits or in the term for which coverage would otherwise remain in force or for which benefits would be paid;

(d) Reissued with any reduction in cash value; or

(e) Used in a financed purchase.

Suitability Information means information that is reasonably appropriate to determine the suitability of a recommendation, including the following:

(a) Age;

(b) Annual income;

(c) Financial situation and needs, including the financial resources used for the funding of the annuity;

(d) Financial experience;

(e) Financial objectives;

(f) Intended use of the annuity;

(g) Financial time horizon;

(h) Existing assets, including investment and life insurance holdings;

(i) Liquidity needs;

(j) Liquid net worth;

(k) Risk tolerance;

(l) Tax status; and

(m) Existing policies or contracts previously sold by the same producer to the same consumer.

Notes

211 CMR 96.04
Amended by Mass Register Issue 1316, eff. 7/1/2016.

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