The national annuities guide covers types, phases, payout options, surrender charges and taxation. Florida annuity sales are governed by three sets of rules:

• the 21-day free look and cover page (626.99(4))
• the best-interest rule (627.4554), which is based on the NAIC model and applies at all ages
• a surrender-charge cap for seniors (627.4554(9))

Free look and cover page (626.99(4))

• Every fixed and variable annuity has an unconditional 21-day refund period, whatever the owner's age. Accredited investors buying variable contracts are excepted.
• Fixed annuities: the refund is all premiums, including fees and charges.
• Variable or market value annuities: the refund is the cash surrender value plus fees and charges deducted, or a return of premium.
• Cover page must show:
  • the refund period
  • the insurer's and agent's contact information
  • the DFS help line
  • bold disclosures, including that an annuity is a long-term commitment that may limit access to money

Best interest (627.4554)

• Scope: applies to every annuity recommendation regardless of age. The old senior-only suitability rule no longer exists.
• Care: the agent learns the consumer's profile and must reasonably believe the annuity addresses the consumer's situation and goals. The profile covers:
  • age, income and financial situation
  • experience, objectives and time horizon
  • existing assets and liquidity needs
  • risk tolerance and tax status
• Exchanges and replacements: the agent weighs surrender charges, lost benefits, fees, whether the new product substantially benefits the consumer, and any exchange in the past 60 months.
• Disclosure: the agent's role, the products and insurers represented, and the sources and types of compensation. On request, the agent gives a reasonable estimate of cash compensation.
• Not required: the rule creates no fiduciary duty and no duty of ongoing monitoring. It doesn't require any license beyond the insurance license unless securities advice is given.
• Signed consumer statements:
  • when the consumer refuses to give profile information
  • when the purchase is not based on a recommendation
• Insurer duties: insurers must eliminate sales contests, quotas and bonuses tied to specific annuities.
• Training: a one-time 4-hour annuity course. The insurer verifies completion before letting the agent sell its annuities.
• Records: kept 5 years.
• Penalties: DFS orders restitution of any amount misappropriated or withheld.

Seniors and surrenders

• Buyers 65 or older: surrender charges are capped at 10% and must end after the 10th policy year, or 10 years after each premium payment, whichever is later (627.4554(9)).
• Recommending a surrender: a written disclosure of surrender charges, lost interest guarantees, tax consequences and forfeited benefits is required (627.4553).

Contract and licensing points

• Grace period: annuity and pure endowment contracts allow one month, but not less than 30 days (627.465).
• Variable contracts:
  • Assets are held in a separate account (627.8015).
  • Sellers must pass the variable contracts portion, which is included in the Life exam, and must be registered to sell securities (626.7845, 517.12).
• Charitable gift annuities may be issued by a qualified 501(c)(3) in operation at least five years (627.481).
• Guaranty: deferred annuity values are covered up to $250,000 (631.717).

Exam traps

• The annuity free look is 21 days for everyone, not just seniors. The 14-day figure belongs to life policies.
• The 10% surrender cap applies to buyers 65+.
• Training is 4 hours, once. Records are kept 5 years.