The national Annuities guide covers annuity types, phases, payout options and taxation. This guide covers Mississippi's annuity sales rules in the suitability and best interest regulation (19 Miss. Admin. Code Pt. 2, Ch. 18), the replacement rule and guaranty coverage.

Best interest standard (Rule 18.06)

A producer recommending an annuity must act in the consumer's best interest under the circumstances known at the time. The producer may not put his or her own financial interest, or the insurer's, ahead of the consumer's. The rule spells out care, disclosure, conflict of interest and documentation obligations. Under the disclosure obligation, the producer discloses the relationship to the consumer on a prescribed form before the recommendation or sale.

• Consumer profile (Rule 18.05): age, income, financial situation, experience, objectives, liquid net worth, risk tolerance and tax status.
• Material conflict of interest: a financial interest likely to affect the producer's impartiality. It does not include cash or non-cash compensation.
• Insurer supervision: each insurer keeps a supervision system reasonably designed to get its own and its producers' compliance.
• Records: information collected, disclosures and the basis for the recommendation are kept 5 years after the transaction.

Training (Rule 18.07)

A one-time 4-credit course approved by the Department is required before a producer sells annuities.

Licensing

Variable annuities require the variable line of authority, which needs a FINRA Series 6 or 7 registration in addition to the life license (Pearson VUE candidate handbook).

Replacement (Regulation 99-2)

The life and annuity replacement rule applies to annuities too:

• the producer reads the replacement notice at or before the application
• the replacing insurer notifies the existing insurer within 5 business days
• a 30-day right to return for a full refund
• records kept 5 years

See the Mississippi Life Policy Provisions guide.

Guaranty protection

The Mississippi Life and Health Insurance Guaranty Association covers up to $250,000 in annuity present value, including cash surrender and withdrawal values (83-23-205). The association may not be used to sell (83-23-235).

Common exam traps

• Best interest is judged on the circumstances known at the time of the recommendation.
• Compensation is not a material conflict of interest.
• Training: 4 credits, once, before selling.
• Records: 5 years. Replacement free look: 30 days.
• Guaranty limit: $250,000.