Code of Massachusetts Regulations › 211 CMR - DIVISION OF INSURANCE › Title 211 CMR 96.00 - Consumer Protection And Suitability In Annuity Transactions › Section 96.04 - Definitions

Current through Register 1525, July 5, 2024
Annuity
means an annuity that is an
				insurance product that is individually solicited, whether the product is
				classified as an individual or group annuity.
Cash Compensation
means any discount,
				concession, fee, service fee, commission, sales charge, loan, override, or cash
				benefit received by a producer in connection with the recommendation or sale of
				an annuity from an insurer, intermediary, or directly from the consumer.
Commissioner
means the Commissioner of
				Insurance appointed pursuant to M.G.L. c. 26, § 6.
Consumer Profile Information
means
				information that is reasonably appropriate to determine whether a
				recommendation addresses the consumer's financial situation, insurance needs
				and financial objectives, including, at a minimum, the following:
(a) Age;
(b) Annual income;
(c) Financial situation and needs, including debts and other
				obligations;
(d) Financial experience;
(e) Insurance needs;
(f) Financial objectives;
(g) Intended use of the annuity;
(h) Financial time horizon;
(i) Existing assets or financial products, including
				investment, annuity and insurance holdings;
(j) Liquidity needs;
(k) Liquid net worth;
(l) Risk tolerance, including but not limited to willingness to
				accept non-guaranteed elements in the annuity;
(m) Financial resources used to fund the annuity; and
(n) Tax status
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.
Insurer
means a company required to be
				licensed under the laws of Massachusetts to provide insurance products,
				including annuities.
Intermediary
means an entity
				contracted directly with an insurer or with another entity contracted with an
				insurer to facilitate the sale of the insurer's annuities by producers.
Material Conflict of Interest
means a
				financial interest of the producer in the sale of an annuity that a reasonable
				person would expect to influence the impartiality of a recommendation. Material
				conflict of interest does not include cash compensation or non-cash
				compensation.
Non-cash Compensation
means any form
				of compensation that is not cash compensation including, but not limited to,
				health insurance, office rent, office support and retirement benefits.
Non-guaranteed Elements
means the
				premiums, credited interest rates (including any bonus), benefits, values,
				dividends, non-interest based credits, charges or elements of formulas used to
				determine any of these, that are subject to company discretion and are not
				guaranteed at issue. An element is considered non-guaranteed if any of the
				underlying non-guaranteed elements are used in its calculation.
Person
means any individual,
				corporation, association, partnership, limited liability company, limited
				liability partnership or other legal entity.
Producer
means a person or entity
				required to be licensed under the laws of Massachusetts to sell, solicit or
				negotiate insurance, including annuities. "
Producer
"
				includes an insurer where no producer is involved.
Recommendation
means advice provided
				by a producer to an individual consumer that was intended to result or does
				result in a purchase, an exchange or a replacement of an annuity in accordance
				with that advice.
Recommendation
does not include
				general communication to the public, generalized customer services assistance
				or administrative support, general educational information and tools,
				prospectuses, or other product and sales materials.
Replacement
means a transaction in
				which a new annuity is to be purchased, and it is known or should be known to
				the proposing producer, or to the proposing insurer whether or not a producer
				is involved, that by reason of the transaction, an existing annuity or other
				insurance policy has been or is to be any of the following:
(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.
SEC
means the United States Securities
				and Exchange Commission.