Section 760 IAC 1-72-3 - DefinitionsAuthority: IC 27-4-9-4
Affected: IC 27-1-15.6-12; IC 27-4-1-4; IC 27-4-9-2
Sec. 3.
The following definitions apply throughout this rule:
(1) "Annuity" means an annuity that is an insurance product under state law that is individually solicited, whether the product is classified as an individual or group annuity.(2) "Cash compensation" means any: (I) cash benefit; received by a producer in connection with the recommendation or sale of an annuity from an insurer, an intermediary, or directly from the consumer.
(3) "Commissioner" means the commissioner of the department of insurance.(4) "Consumer" has the meaning set forth in IC 27-4-9-2.(5) "Consumer profile information" means information that is reasonably appropriate to determine whether a recommendation addresses the consumer's financial situation, insurance needs, and financial objectives, including, at a minimum, the following: (C) Financial situation and needs, including debts and other obligations.(D) Financial experience.(F) Financial objectives.(G) Intended use of the annuity.(H) Financial time horizon.(I) Existing assets or financial products, including investment, annuity, and insurance holdings.(L) Risk tolerance, including, but not limited to, willingness to accept nonguaranteed elements in the annuity.(M) Financial resources used to fund the annuity.(6) "Continuing education credit" or "CE credit" has the meaning set forth in 760 IAC 1-50-3.(7) "Continuing education provider" or "CE provider" has the meaning set forth in 760 IAC 1-50-2(4).(8) "Department" means the Indiana department of insurance.(9) "FINRA" means the Financial Industry Regulatory Authority or a successor agency.(10) "Insurer" means a company required to be licensed under the laws of this state to provide insurance products, including annuities.(11) "Intermediary" means an entity contracted directly with an insurer, or with another entity contracted with an insurer, to facilitate the sale of the insurer's annuities by producers.(12) "Material conflict of interest" means a financial interest of the producer in the sale of an annuity that a reasonable person would expect to influence the impartiality of a recommendation. The term does not include cash compensation or noncash compensation.(13) "Noncash compensation" means a form of compensation that is not cash compensation, including, but not limited to, the following: (14) "Nonguaranteed elements" means: (B) credited interest rates, including bonuses;(F) noninterest based credits;(H) elements of formulas used to determine subdivisions (A) through (G); that are subject to company discretion and are not guaranteed at issue. An element is considered nonguaranteed if any of the underlying nonguaranteed elements are used in its calculation.
(15) "Producer" means a person or entity required to be licensed under the laws of this state to sell, solicit, or negotiate insurance, including annuities. For purposes of this rule, "producer" includes an insurer where no producer is involved.(16) "Recommendation" means advice provided by a producer to an individual consumer that was intended to result or does result in a purchase, an exchange, or a replacement of an annuity in accordance with that advice. The term does not include general communication to the public, generalized customer services assistance or administrative support, general educational information and tools, prospectuses, or other product and sales material.(17) "Replacement" means a transaction in which a new annuity is to be purchased, and it is known or should be known to the proposing producer, or to the proposing insurer whether or not a producer is involved, that by reason of the transaction, an existing annuity or other insurance policy has been or is to be any of the following:(A) Lapsed, forfeited, surrendered or partially surrendered, assigned to the replacing insurer, or otherwise terminated.(B) Converted to reduced paid-up insurance, continued as extended term insurance, or otherwise reduced in value by the use of nonforfeiture benefits or other policy values.(C) Amended so as to effect either a reduction in benefits or in the term for which coverage would otherwise remain in force or for which benefits would be paid.(D) Reissued with a reduction in cash value.(E) Used in a financed purchase.(18) "SEC" means the United States Securities and Exchange Commission.Department of Insurance; 760 IAC 1-72-3; filed Feb 16, 2006, 8:25 a.m.: 29 IR 2193, eff Jul 1, 2006; filed Jan 27, 2009, 9:51 a.m.: 20090225-IR-760080058FRAReadopted filed 11/20/2015, 9:25 a.m.: 20151216-IR-760150341RFAReadopted filed 11/15/2021, 8:32 a.m.: 20211215-IR-760210419RFAFiled 2/8/2024, 12:47 p.m.: 20240306-IR-760230518FRA, eff 7/1/2024