California Insurance Code & EthicsQuestion 73 of 716
California's annuity suitability rules require an insurer or producer recommending an annuity to a consumer to have reasonable grounds to believe the recommendation is suitable based on:
a.The popularity of the product among other clients the producer's office has written that quarter
b.Whether the consumer can be persuaded to buy after a second in-home sales presentation is made
c.The producer's own commission level and the sales-bonus schedule that the insurer pays on that particular product
d.The consumer's age, financial situation, tax status, investment objectives, and other suitability information
Explanation
§§10509.910+ adopt the NAIC suitability model (with California enhancements) requiring that recommendations be based on documented suitability information about the consumer, not the producer's compensation.
Law Reference: Cal. Ins. Code §10509.915This topic, taught in full in the California Life & Health Insurance Producer Exam guide. California Life & Health Insurance Producer Exam — Complete Study Guide (2026) — PDF + EPUB, $19.99 · 14-day refund →
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PrepPass team · Verified against California Life & Health Insurance License Exam · How we review
Reviewed by John Zihao Zhang — California-Licensed Life Insurance Agent (CA Dept. of Insurance License #4396095 — verify)