N.M. Code R. § 12.15.1.8

Current through Register Vol. 35, No. 11, June 11, 2024

Section 12.15.1.8 - ANNUITY SALES

A. A lending institution or its affiliate may engage in the sale of annuities subject to the following.

(1) All lending institution/affiliate employees who are engaged in the sale of annuities must be licensed to the extent required by the Insurance Code Section 59A-12-6 NMSA 1978.

(2) The lending institution/affiliate must provide and retain a copy of the disclosure and written statement signed by the purchaser of the annuity as provided by Section 13 of this regulation [now 12.15.1.13 NMAC].

(3) The lending institution may provide to affiliates and/or third-party providers only customer name, address, telephone number and types of products owned. It may not share confidential information, such as specific or aggregate dollar amounts of investments, deposit balances, net worth, etc., without the customer's prior acknowledgment and written consent. The written consent will be on a form specified by the financial institutions division. This does not limit the lending institution's obligation to provide information to the insurer in the sale of an annuity product.

(4) the lending institution may not underwrite annuities.

B. A lending institution or its affiliate may enter into an arrangement with a third-party provider under which the lending institution/affiliate may refer customers directly to the annuity agent for the sale of annuities. A lending institution or its affiliate may enter into arrangements with a third-party provider to provide space on lending institution premises for sale of annuities. Any arrangement between a lending institution or its affiliate and a third party provider that utilizes space on the premises of the lending institution to facilitate the sale of annuities shall be subject to the following general conditions.

(1) The arrangements between a lending institution/affiliate and a third party provider must be governed by a written agreement that:

(a) sets forth the responsibilities of the parties;

(b) specifies the compensation to be received by the lending institution;

(c) requires that annuities may be sold only by an annuity agent;

(d) reserves the right of the lending institution to disapprove the placement or retention of any annuity agent;

(e) requires the annuity agent to provide and retain copies of the disclosure and written statement signed by the purchaser of the annuity in accordance with Section 13 [now 12.15.1.13 NMAC];

(f) requires the annuity agent or third party provider to receive prior approval of the lending institution before engaging in any advertising/solicitation that identifies the name, address or telephone number of the lending institution.

(2) When the annuities sales program is operated independently by a person that is not an employee or affiliate of the lending institution and annuities are sold on the premises of the lending institution, the lending institution must include in the written agreement with the third party provider language that expressly:

(a) negates a partnership or joint venture between the lending institution and the annuity agent; and

(b) states that the lending institution has no right to, and may not attempt to, exercise control over the sale of annuities by the annuity agent other than as expressly permitted by this regulation.

(3) When the annuity sales program is operated by an annuity agent who is also an employee of the lending institution or affiliate, the written agreement between the lending institution and third-party provider shall:

(a) define the supervisory responsibilities of each party to the agreement;

(b) specify the rights of the respective parties to control the compensation of the annuity agent;

(c) specify that the annuity agent will not use bank customer confidential information for solicitation of annuity products, other than procedures otherwise expressly authorized by this regulation;

(d) specify that if a dual employee is terminated by either party to the agreement, the party causing the termination shall notify the other party of such termination and the reasons, if any, therefore;

(e) specify that each party to the agreement shall notify the other party of any investigation or proceeding by a regulatory or law enforcement authority regarding the employee except as otherwise prohibited by law.

C. A lending institution shall serve written notice to the financial institutions division when it has entered into an agreement required by this regulation.

N.M. Code R. § 12.15.1.8

12/15/95; Recompiled 10/15/01