Washington Administrative Code › Title 284 - Insurance Commissioner, Office of the › Chapter 284-23 - Washington life insurance regulations › SUITABILITY IN ANNUITY TRANSACTIONS › Section 284-23-390 - Duties of insurers and producers

Current through Register Vol. 24-14, July 15, 2024
(1) For purposes of
				this section, "producer" has the meaning set forth in
				RCW
				 48.23.015, unless the context clearly
				requires otherwise.
(2) For
				purposes of this section, "consumer profile information" has the meaning set
				forth in RCW  48.23.015.
(3) In addition to the requirements in
				RCW
				 48.23.015 an insurer must:
(a) Establish and maintain reasonable
				procedures to inform its producers of the requirements of this regulation and
				shall incorporate the requirements of this regulation into relevant producer
				training manuals;
(b) Establish and
				maintain standards for producer product training and must establish and
				maintain reasonable procedures to require its producers to comply with the
				requirements of WAC
				284-17-265;
(c) Provide product-specific training and
				training materials which explain all material features of its annuity products
				to its producers;
(d) Establish and
				maintain procedures for the review of each recommendation before issuance of an
				annuity that are designed to ensure there is a reasonable basis to determine
				that the recommended annuity would effectively address the particular
				consumer's financial situation, insurance needs, and financial objectives. The
				review procedures may apply a screening system for the purpose of identifying
				selected transactions for additional review and may be accomplished
				electronically or through other means including, but not limited to, physical
				review. The electronic or other system may be designed to require additional
				review only of those transactions identified for additional review by the
				selection criteria;
(e) Establish
				and maintain reasonable procedures to detect recommendations that are not in
				compliance with
				RCW
				 48.23.015 (3), (4), and (6),
				and subsection (6) of this section. This may include, but is not limited to,
				confirmation of the consumer's consumer profile information, systematic
				customer surveys, producer and consumer interviews, confirmation letters,
				producer statements or attestations, and programs of internal monitoring.
				Nothing in this subsection prevents an insurer from complying with this
				subsection by applying sampling procedures, or by confirming the consumer
				profile information or other required information under this section after
				issuance or delivery of the annuity;
(f) Establish and maintain reasonable
				procedures to assess, before or upon issuance or delivery of an annuity,
				whether a producer has provided to the consumer the information required to be
				provided under this section;
(g)
				Establish and maintain reasonable procedures to identify and address suspicious
				consumer refusals to provide consumer profile information;
(h) Establish and maintain reasonable
				procedures to identify and eliminate any sales contests, sales quotas, bonuses,
				and noncash compensation that are based on the sales of specific annuities
				within a limited period of time. The requirements of this subsection (3)(h) are
				not intended to prohibit the receipt of health insurance, office rent, office
				support, retirement benefits, or other employee benefits by employees as long
				as those benefits are not based upon the volume of sales of a specific annuity
				within a limited period of time; and
(i) Annually provide a written report to
				senior management, including to the senior manager responsible for audit
				functions, which details the review, with appropriate testing, reasonably
				designed to determine the effectiveness of the supervision system, the
				exceptions found, and corrective action taken or recommended, if any.