NAC688A.455. Recommendations: Responsibilities of insurer or producer of insurance; corrective action.

     1. Except as otherwise provided in subsection 2, before an insurer or a producer of insurance recommends to a person the purchase of an annuity, or the exchange of an annuity that results in the purchase or exchange of an annuity in accordance with the recommendation, the insurer or producer of insurance must make reasonable efforts to obtain:

     (a) The financial and tax status of the person;

     (b) The investment objectives of the person; and

     (c) Any other information that the insurer or producer of insurance determines would be useful in making such a recommendation.

     2. Before an insurer or a producer of insurance recommends to a person the purchase of a variable annuity, or the exchange of a variable annuity that results in any additional insurance transaction, the insurer or producer of insurance must make reasonable efforts to obtain:

     (a) The information described in subsection 1; or

     (b) The information described in Conduct Rule 2310 of the National Association of Securities Dealers.

     3. Except as otherwise provided in subsection 4, if an insured is harmed financially because an insurer or a producer of insurance failed to comply with subsection 1 or 2, the Commissioner may require the insurer or producer of insurance to take corrective action.

     4. An insurer or a producer of insurance is not responsible for any financial damages incurred by an insured relating to the purchase or exchange of an annuity that was recommended by the insurer or producer of insurance if the insured:

     (a) Refused to provide to the insurer or producer of insurance the information described in subsection 1 or 2;

     (b) Provided to the insurer or producer of insurance information that was incomplete or inaccurate; or

     (c) Entered into an insurance transaction that was not based on the recommendation of the insurer or producer of insurance.

     (Added to NAC by Comm’r of Insurance by R076-05, eff. 2-23-2006; A by R115-06, 9-18-2006)

Notation

REVISER’S NOTE.

      The regulation of the Commissioner of Insurance filed with the Secretary of State on September 18, 2006 (LCB File No. R115-06), which amended this section, contains the following provision not included in NAC:

      “An insurer or provider of insurance is not required to comply with the provisions of this regulation until December 17, 2006.”