The national Annuities guide covers how annuities work: phases, fixed, indexed and variable products, payout options, surrender charges, 1035 exchanges and taxes. This guide covers the Wisconsin rules:

• the best interest standard in Wis. Stat. 628.347, as amended by 2021 Wisconsin Act 260
• required annuity training
• the Preliminary Contract Summary
• replacement

Training (Wis. Stat. 628.347(4m))

• Before selling annuities, an intermediary completes a one-time approved course worth at least 4 CE credits.
• The course can't include marketing, sales technique or insurer-specific product information.
• The insurer verifies that the course is done before allowing sales.

Best interest (Wis. Stat. 628.347)

An intermediary recommending an annuity acts in the consumer's best interest and doesn't put the intermediary's or insurer's financial interest ahead of the consumer's. There are four obligations:

1. Care. Know the consumer's profile and have a reasonable basis for the recommendation. The profile includes age, income, financial situation, objectives, liquidity needs, tax status and risk tolerance.
2. Disclosure. Tell the consumer the scope of the relationship. That includes whether the intermediary sells for one insurer, for two or more insurers while primarily contracted with one, or for two or more insurers. Also disclose the products offered and how the intermediary is paid.
3. Conflict of interest. Identify material conflicts and avoid or disclose them.
4. Documentation. Record the basis for the recommendation. A consumer who refuses to give profile information signs a statement (like the NAIC Appendix B form) documenting the refusal and what it means.

Exchanges and replacements: the intermediary considers other exchanges or replacements, especially in the past 60 months.

What the standard doesn't do:

• create a fiduciary obligation
• require recommending the lowest-compensation annuity

Other rules:

• An intermediary may not discourage a consumer from truthfully confirming profile information, filing a complaint or cooperating with an investigation (628.347(3m)).
• Records are kept 6 years after the transaction is completed (628.347(7)(a)).

Preliminary Contract Summary (Ins 2.15)

• A Preliminary Contract Summary is a written statement given before the sale.
• It must prominently disclose surrender charges and similar fees.
• Immediate annuities that begin payments within 13 months of issue are exempt.

Replacement

Wisconsin's replacement rule, Ins 2.07, covers life insurance and annuities:

• notice to the existing insurer within 5 business days
• a 30-day right to return the replacement for a full refund
• evidence of a financed purchase when existing values are used within 4 months before or 13 months after the new contract starts

See the Wisconsin Life Policy Provisions guide for the full procedure.

Guaranty protection

The Wisconsin Insurance Security Fund covers up to $300,000 per life (Wis. Stat. 646.31). Using the fund as a sales point is prohibited (628.34(10)).

Common exam traps

• Annuity training is a one-time 4-credit course, and the insurer must verify it.
• Best interest has four obligations, isn't fiduciary, and doesn't require the cheapest product.
• Wisconsin keeps best-interest records 6 years.
• The look-back for prior replacements is 60 months.
• The Preliminary Contract Summary comes before the sale. Immediate annuities paying within 13 months are exempt.
• A replacement gets 30 days to return.