Annuity Watch List - STATES - NAFA

1 Annuity Watch List STATES ROUND-UP January 2012 Update NAFA's Monthly Update on Regulatory and legislative Activity Affecting Fixed Annuity Products, Distributors, and Manufacturers 0 State Issue Latest Update Date AR General The Arkansas Department of Insurance issued its 2010 Annual Report. 12/06/2011. IA Index Options The Iowa Insurance Division (IID) is holding a round table discussion on February 8, 2012 to discuss 01/03/ 2012 . its proposed new guidelines for index options for indexed life insurance products and indexed Annuity products.

2 NAFA has submitted written comments, and Kim O'Brien will attend the Feb. 8th round table hearing to make an oral presentation regarding concerns with aspects of the proposed guidelines that are vague and/or overreaching. IA Annuity Disclosure 01/03/ 2012 . Requirements Iowa est seq -- APA The Iowa Insurance Division proposes to amend Chapter 15, "Unfair Trade Practices" of the Iowa Administrative Code to conform the standards and guidelines of insurance business conduct with the Annuity Disclosure Model Regulation adopted by the National Association of Insurance Commissioners.

3 (See pdf above, Notice of Intended Action.) Deadline for written comments is January 18, 2012 , and NAFA submitted a comment letter on December 14, 2011, particularly addressing (6) related to Standards for Annuity Illustrations. In addition, NAFA will be represented at the January 18th public hearing before the IID. NV 70/10 Rule Nevada has adopted the "70/10" rule for new Annuity contracts issued on or after January 1, 2012 , 01/03/ 2012 . eliminating the ability to have Annuity payments commence at optional maturity dates and requiring the maturity date to be no later than the anniversary of the contract next following the annuitant's 70th birthday or the 10th anniversary of the contract, whichever is later.

4 (See Nevada AB 74, adopted June 2011, Section 42 (p. 31 of the Bill)) According to the NV Division of Insurance, Annuity contracts that have been already issued prior to January 1, 2012 will be grandfathered in, but Annuity products sold as of that date must comply with the new 70/10 rule. See also, Nevada Division of Insurance Bulletin 11-007. 1/4/ 2012 1. Annuity Watch List STATES ROUND-UP - January 2012 Update NAFA's Monthly Update on Regulatory and legislative Activity Affecting Fixed Annuity Products, Distributors, and Manufacturers 0 State Issue Latest Update Date NV Changes to "Free- Also included in Nevada AB 74 (see Sections 38 & 39), were changes to the free-look period 01/03/ 2012 .

5 Look" Period for requirements for individual life insurance policies and individual Annuity contracts, pursuant to Life Insurance and Nevada Revised Statutes Effective October 1, 2011, non-replacement life insurance Annuities policies and Annuity contracts must provide for a 10-day "free look" after delivery of the policy or contract, during which time the policy holder or annuitant may cancel the contract and receive a full refund of all premiums or considerations paid. (Previously the 10-day requirement applied to life insurance policies only.)

6 In addition, NV AB 74 requires that replacement policies or replacement Annuity contracts provide a 30-day period after delivery during which time the policy or contract may be cancelled for a full refund. Nevada Division of Insurance Bulletin 11-008. STATES WITH ENACTED LEGISLATION/ADMIN RULES RE SUITABILITY IN Annuity TRANSACTIONS. Adoption of The following STATES have adopted new regulations relating to Suitability in Annuity Transactions, Suitability in pursuant to the NAIC Model Regulation #275 and the mandates of the Dodd-Frank Act: Annuity Transactions Alaska (AK Title 3 AAC - ), California (CA Chapter 295), Colorado (CO 3 CCR 702-4, Reg.)

7 4-1-11), Connecticut (CT Suitability in Annuity Transactions 38a-432a-1 - 38a-432a-8), District of Columbia (DC Mun. Regs. 26-A84 (2011)), Hawaii (HI SB 1278 (Hawaii 2011 Act 108)), Illinois (50 Ill Admin. Code 3120), Indiana (Indiana 2011 Enrolled Act 1015), Iowa (Iowa Admin. Code ), Kentucky (806 KAR 12:120) 806 KAR 9:220, Maryland (MD Reg (Final Published )), New Jersey (NJ Admin Code (go to Title 11: Insurance)), New York (NY. NOTES: 2. 1. To get related documents to these issues please visit and click on Advocacy Tab.

8 Then click on the state(s) of your choice. 2. All NAIC Suitability Model final adoption specifics on TRAINING can be found on the State-By-State NAIC Model Analysis located here. 3. This report has been research and compiled by NAFA Legal Counsel, Pamela M. Heinrich, Esq. All questions should be directed to or Annuity Watch List STATES ROUND-UP - January 2012 Update NAFA's Monthly Update on Regulatory and legislative Activity Affecting Fixed Annuity Products, Distributors, and Manufacturers 0 State Issue Latest Update Date Emergency Regulation 187) (NOTE: New York has adopted an emergency rule which requires insurers to train producers but does not require producers to complete specific training requirements.

9 Pending legislation, NY AB 563, would provide CE requirements, but that bill has not been adopted by the NY Legislature), North Dakota (ND Ch. Annuity Transaction Practices), Ohio (Ohio 3901-6-13), Oklahoma (OK 365: 25-3-1), Oregon (OAR 836-080-0001 (Scroll to 0170)), Rhode Island (RI Insurance Regulation 12), South Carolina (SC Code 69-29 Suitability in Annuity Transactions), Texas (Texas HB 2154, Texas HB 2277), West Virginia (WV Rule 114-11B. (open PDF link)), and Wisconsin (Wis. Stats. Ch. 628 (scroll to )). January 2012 ALASKA: Producers who were licensed as of October 16, 2011 must complete the product specific Deadlines for training before January 16, 2012 and must complete the one-time, 4-hour CE Annuity training Compliance with before April 16, 2012 .

10 Annuity Training, pursuant to the CALIFORNIA: Insurance producers who have not completed the insurer's product-specific Annuity adoption of training prior to January 1, 2012 is precluded from selling those Annuity products until the product- Suitability specific training is completed. See CA Dept. of Insurance Notice, 12/06/11. Standards HAWAII: Existing HI producers have until January 31, 2012 to complete the 4-hour CE Annuity training course and the product-specific training (PST). Producers licensed after January 31, 2012 .