Iowa Administrative Code › Agency 191 - Insurance Division › Unfair Trade Practices › Chapter 15 - Unfair Trade Practices › Rule 191-15.74 - Definitions

Current through Register Vol. 47, No. 3, July 24, 2024
For purposes of this division:
"Annuity"
means an annuity that is an
				  insurance product under state law, 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.
"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:
1. Age;
2. Annual income;
3. Financial situation and needs, including
				debts and other obligations;
4.
				Financial experience;
5. Insurance
				needs;
6. Financial
				objectives;
7. Intended use of the
				annuity;
8. Financial time
				horizon;
9. Existing assets or
				financial products, including investment, annuity and insurance
				holdings;
10. Liquidity
				needs;
11. Liquid net
				worth;
12. Risk tolerance,
				including, but not limited to, willingness to accept nonguaranteed elements in
				the annuity;
13. Financial
				resources used to fund the annuity; and
14. Tax status.
"Continuing education credit"
or
"CE
				  credit"
means one credit as defined in rule
				  191-11.2 (505,522B).
"Continuing education provider"
or
"CE provider"
means a CE provider as defined in rule
				  191-11.2 (505,522B).
"FINRA"
means the Financial Industry
				  Regulatory Authority or a succeeding agency.
"Insurer"
means a company required to be
				  licensed under the laws of this state 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 noncash
				  compensation.
"Noncash 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.
"Nonguaranteed 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 nonguaranteed if any of the underlying
				  nonguaranteed elements are used in its calculation.
"Producer"
means a person or entity required
				  to be licensed under the laws of this state to sell, solicit or negotiate
				  insurance, including annuities. For purposes of these rules, "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 material.
"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:
1. Lapsed, forfeited, surrendered or
				partially surrendered, assigned to the replacing insurer or otherwise
				terminated;
2. 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;
3. 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;
4. Reissued with any reduction in cash value;
				or
5. Used in a financed
				purchase.
"SEC"
means the United States Securities and
				  Exchange Commission.