Suitability in Annuity Transactions

Proposed Rulemaking Filed: 09/20/2023
Effective Date: July 5, 2024

Purpose

1. The purpose of this rule is to require producers, as defined in this rule, to act in the bestinterest of the consumer when making a recommendation of an annuity and to requireinsurers to establish and maintain a system to supervise recommendations so that theinsurance needs and financial objectives of consumers at the time of the transaction areeffectively addressed.
2. Nothing herein shall be construed to create or imply a private cause of action for a violationof this rule or to subject a producer to civil liability under the best interest standard of careoutlined in Section 6 of this rule or under standards governing the conduct of a fiduciaryor a fiduciary relationship.
3. This rule sets forth the standards for the sale of annuities in Vermont and should be read with the requirements of 8 V.S.A. § 4724(16) and other applicable Vermont laws including the Insurance Trade Practices Act, 8 V.S.A. §§ 4721 et seq. Nothing precludes an insurer from exceeding the requirements of this rule.
4. A recommendation to purchase or sell products defined as securities under the Vermont Uniform Securities Act is the offering of investment advice. A person who offers investment advice must be registered with the Vermont.