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Annuity Best Interest Notice

IMPORTANT NOTICE FOR MINNESOTA INSURANCE PRODUCERS

On May 23, 2022, Minnesota’s training requirements for insurance producers who wish to engage in the sale of annuity products changed.  The training requirement for an individual producer depends on when that person became licensed and whether they previously completed the annuity suitability and disclosure training required by Minnesota law. 

General annuity training requirement. An insurance producer who sells annuity products must complete a onetime four-credit training course approved by the Commerce Department before being involved in an annuity transaction.

Insurance producers who hold a life insurance line of authority on December 31, 2022, and who want to sell annuities, must complete the training requirements no later than June 30, 2023. Individuals who obtain a life insurance line of authority on or after January 1, 2023, may not engage in the sale of annuities until the required annuity training course has been completed.

Annuity training courses may be conducted and completed by classroom or self-study methods in accordance with Minn. Stat. Chapter 45.

Option for producers with prior training. An insurance producer licensed by December 31, 2022, who holds a life insurance line of authority and previously completed the annuity suitability and disclosure training required by Minnesota law must complete either:

  1. a new four-credit training course approved by the Department of Commerce after July 1, 2022; or
  2. an additional onetime one-credit training course approved by the Department of Commerce after July 1, 2022. The course must be provided by a Department of Commerce-approved education provider on appropriate sales practices and replacement and disclosure requirements under Minn. Stat. §§ 72A.203 to 72A.2036.

Course requirements. To be approved, the course must be titled "Best Interest Standards of Conduct for Annuity Sales." Only courses satisfying the requirements of Minn. Stat. § 72A.2033 can use this course title after July 1, 2022.

The required training must include information on the following topics:

  1. (the types of annuities and various classifications of annuities;
  2. identification of the parties to an annuity;
  3. how fixed, variable, and indexed annuity contract provisions affect consumers;
  4. the application of income taxation of qualified and nonqualified annuities;
  5. the primary uses of annuities;
  6. appropriate standard of conduct, sales practices, replacement, and disclosure requirements; and
  7. the recognition of indicators that a prospective insured may lack the short-term memory or judgment to knowingly purchase an insurance product.
 
Providers of these courses must cover all topics listed in the prescribed outline and must not present any marketing information or provide training on sales techniques or provide specific information about a particular insurer's products.
 

Reporting requirements. Providers of annuity training must comply with the course completion reporting requirements of Minn. Stat. Chapter 45.

Insurer verification requirements. An insurer must verify that an insurance producer has completed the annuity training course required under Minn. Stat. § 72A.2033, subd. 2 before allowing the insurance producer to sell an annuity product for that insurer.

The satisfaction of the training requirements of another state that are substantially similar to the provisions of Minn. Stat. § 72A.2033, subd. 2 satisfies the training requirements of Minn. Stat. § 72A.2033, subd. 2 in Minnesota.

The satisfaction of the components of the training requirements of any course or courses with components substantially similar to the provisions of Minn. Stat. § 72A.2033, subd. 2 satisfy the training requirements of Minn. Stat. § 72A.2033, subd. 2.

FREQUENTLY ASKED QUESTIONS

When do the new insurance producer training requirements for annuity transactions take effect?

The updated training requirements became effective May 23, 2022, but the compliance deadline for an individual producer depends on when the individual became licensed and whether the individual previously completed the annuity suitability and disclosure training required by Minnesota law. Insurance producers who hold a life insurance line of authority on December 31, 2022, and who desire to sell annuities must complete the training requirements by June 30, 2023. Individuals who obtain a life insurance line of authority on or after January 1, 2023, may not engage in the sale of annuities until the required annuity training course has been completed. See Minn. Stat. Chap. 45 and § 72A.2033.

Is an insurance producer who holds an active license with a life insurance line of authority but who does not want to solicit annuity products required to complete the annuity training requirements?

The annuity training course is required only for an insurance producer who desires to sell annuities. See Minn. Stat. § 72A.2033, subd. 1. 

How can I find an approved Best Interest Standards of Conduct for Annuity Sales course?

Visit www.sircon.com/minnesota to review a list of approved providers, courses, and course offerings. Look for Annuity Best Interest courses.

I took the required annuity suitability training course a few years ago. Do I need to take a new Best Interest Standards of Conduct for Annuity Sales course?

Yes, if you want to keep selling annuities. If you were licensed as an insurance producer by December 31, 2022, hold a life insurance line of authority, and previously completed the annuity suitability and disclosure training required by Minnesota law, you must complete either the new four-credit training course approved by the Department of Commerce after July 1, 2022, or an additional onetime one-credit training course approved by the Department of Commerce after July 1, 2022. See Minn. Stat. § 72A.2033, subd. 2. 

I’m a nonresident insurance producer licensee. Am I required to complete the Minnesota annuity training requirements?

Yes, unless you completed training requirements in another state that are substantially similar to the provisions of Minn. Stat. § 72A.2033, subd. 2. The insurer must verify the course content similarity and your completion of the annuity training before allowing you to sell any of its annuity products. See Minn. Stat. § 72A.2033, subd. 2.

I completed a four-credit annuity training course in another state. Will that course satisfy the annuity training requirements for Minnesota?

Only if the course is substantially similar to the training required by the provisions of Minn. Stat. § 72A.2033, subd. 2. The insurer must verify the course content similarity and your completion of the annuity training before allowing you to sell any of its annuity products. See Minn. Stat. § 72A.2033, subd. 2.

Is an insurance producer who holds an active license with a life insurance line of authority required to complete the annuity training in order to renew their insurance producer license?

The annuity training requirement will not be audited at your license renewal. It is the ongoing responsibility of the insurer to document that the required training has been completed. See Minn. Stat. § 72A.2033, subd. 2.

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