Alaska Suitability in Annuity Transactions
The New Best Interest Requirement
The Alaska Division of Insurance recently adopted RA22-01 modifying the existing training requirement for Alaska Suitability in Annuity transactions. The order goes into effect on November 23, 2022 and requires that all licensed insurance producers who hold a life insurance line of authority in Alaska and want to sell annuities on or after July 15, 2023, must take an Annuity Best Interest (Annuity BI) certification course offered by an approved continuing education provider. The updated training courses will include adopted NAIC’s 2020 Model Law #275 best-interest standards, which among other changes, outline the requirement for producers to act in the best interest of the consumer at the time the annuity recommendation is made.
Required Annuity Suitability Training
The topics that must be covered by the training course are set out in the regulation covering Alaska Suitability in Annuity Transactions and shall include information on:
- The types of annuities and various classifications of annuities
- Identification of the parties to an annuity
- How specific annuity contract provisions affect the consumer
- The application of income taxation of qualified and non-qualified annuities
- The primary uses of annuities
- Appropriate standard of conduct, sales practices, replacement and disclosure requirements
New Alaska Training Requirement
A producer shall not solicit the sale of an annuity product unless the producer has adequate knowledge of the product to recommend the annuity and the producer is in compliance with the insurer’s standards for product training. A producer may rely on insurer-provided product-specific training standards and materials to comply with 3 AAC 26.778.
A producer who engages in the sale of annuity products shall complete a one-time minimum four credit-hour annuity training course approved by the director and provided in accordance with AS 21.27.020 and 3 AAC 23.100- 3 AAC 23.208.
Producers who obtain a new life insurance line of authority may not engage in the sale of annuities until the annuity training course required under 3 AAC 26.778 has been completed.
Frequently Asked Questions
Who needs to complete the new training?
All producers who engage in the sale of annuities in the state of Alaska must complete the training required by the revised model.
When is the training due?
Producers who already took an Annuity Suitability training course that the director approved before January 15, 2023 and who are currently certified to sell annuities in Alaska need to complete either:
1-Hour Annuity Best Interest course by July 15, 2023
OR
4-Hour Annuity Best Interest course after July 15, 2023 and before the sale, solicitation or negotiation of an annuity product in Alaska.
A producer who has NOT completed the Annuity Suitability training requirements under the prior version of the model must complete the required training by July 15, 2023 or before the sale, solicitation or negotiation of an annuity product in Alaska.
What if a producer does not complete the required training?
A producer who fails to satisfy the training requirements is not permitted to recommend or sell annuities. A producer who recommends or sells annuities without completing the required training may face enforcement action by the Alaska Division of Insurance.
Will a producer get CE credit for taking the new annuity best interest training?
Yes, courses must be taken through an approved continuing educatino provider. The course approval should indicate a course category of “Annuity”. These courses are approved for insurance continuing education towards your license renewal and it is the education providers responsibility to post these credits to your transcript. InsuranceStudy will have both courses available in our catalog at https://www.insurancestudy.com/courses/alaska-insurance-continuing-education. Courses will be available upon approval by the Alaska Division of Insurance.
How does a producer show that they have met the new annuity best interest training requirement?
The producer may be asked by the insurer to provide a certificate of completion of the training course in order to satisfy the insurer’s responsibility under the Regulation. Certificates of Completion are provided by InsuranceStudy at the completion of your course and can be downloaded at any time from your course dashboard. Additionally, InsuranceStudy is an approved ClearCert provider and all course completions will be reported to ClearCert so that carriers may verify a producer’s certification status at any time. It is the insurer’s responsibility to verify that the producer has completed the training.
