California Insurance Code & EthicsQuestion 73 of 315
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 in the producer's office
b.Whether the consumer can be persuaded to buy
c.The producer's commission level for the 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 §10509.915Practice all 315 questions free — no signup required.
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Sen Lin, PrepPass Founder · 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)