Free Annuities Study Guide
Missouri Life exam — Annuities.
The national Annuities guide covers annuity types, phases, payout options and taxation. This guide covers Missouri's annuity rules: the best interest regulation (20 CSR 400-5.900), the variable annuity rules, and the replacement rule.
Best interest standard (20 CSR 400-5.900)
A producer recommending an annuity meets the best interest standard by satisfying four obligations:
| Obligation | What it requires |
|---|---|
| Care | Know the consumer profile and have a reasonable basis for the recommendation. The profile includes age, income, financial objectives, liquidity needs, risk tolerance and tax status. |
| Disclosure | Before the recommendation or sale, use a form substantially similar to the rule's Appendix A |
| Conflict of interest | Identify and avoid, or manage and disclose, material conflicts. Cash or non-cash compensation is not itself a material conflict. It's handled through disclosure. |
| Documentation | Record the basis for the recommendation |
- A "recommendation" doesn't include general public communications, general education materials or product materials.
- No one may dissuade a consumer from answering truthfully, filing a complaint or cooperating with an investigation.
- Records are kept at least 3 years after the insurer completes the transaction.
Training (20 CSR 400-5.900(5))
A one-time 4-credit course approved by the Director must be completed before a producer sells annuities.
Variable annuities
- A variable contract's benefits or values reflect the investment results of separate accounts (RSMo 376.309; 20 CSR 400-1.020).
- A variable annuity contract must have a 30-day grace period for payments (20 CSR 400-1.020).
- Selling variable products requires Missouri's variable life and variable annuity line of authority (RSMo 375.018).
- Guaranty coverage excludes amounts not guaranteed by the insurer, such as variable separate account values (376.717).
Replacement (20 CSR 400-5.400)
The life and annuity replacement rule applies to annuities too:
- signed statements on existing coverage
- the replacement notice read and signed at application
- sales material left with the applicant
- notice to the existing insurer within 5 business days
- a 30-day right to return. For variable contracts, the refund is the cash value plus any charges.
Guaranty protection
The Missouri Life and Health Insurance Guaranty Association covers up to $250,000 in annuity present value, including cash surrender and withdrawal values (376.717).
Common exam traps
- Best interest: care, disclosure, conflict of interest, documentation. Compensation is handled by disclosure, not as a conflict.
- Training: 4 credits once, before selling.
- Records: 3 years.
- Variable annuity grace period: 30 days. A replacement gives a 30-day return right.
- The guaranty association excludes non-guaranteed separate account values. The cap is $250,000.
Practice Annuities questions All Life topics
Practice questions are study aids generated for exam preparation and are not actual exam questions. Content is provided for educational purposes and is not legal advice. Verify current statutes, rules, and exam specifications with the Insurance Department and the exam administrator before relying on it.
