New Jersey Administrative Code
Title 11 - INSURANCE
Chapter 4 - ACTUARIAL SERVICES
Subchapter 59A - SUITABILITY AND INSURER SUPERVISION REQUIREMENTS FOR ANNUITIES DIRECTLY SOLICITED TO CONSUMERS
Section 11:4-59A.2 - Definitions
Words and terms as defined in 17B:25-35, when used in this subchapter, shall have the meanings as defined in the Act, unless the context clearly indicates otherwise or as further defined in this subchapter. The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise.
"Act" means 17B:25-34 et seq.
"Annuity" means a product as defined at 17B:17-5 that is individually solicited, whether the product is classified as an individual or group annuity.
"Commissioner" means the Commissioner of the New Jersey Department of Banking and Insurance.
"Continuing education credit" or "CE credit" means one continuing education credit as defined in N.J.A.C. 11:17-3.
"Continuing education provider" or "CE provider" means an individual or entity that is approved to offer continuing education courses pursuant to N.J.A.C. 11:17-3.
"Department" means the New Jersey Department of Banking and Insurance.
"FINRA" means the Financial Industry Regulatory Authority or a succeeding agency.
"Recommendation" means advice provided by an insurance producer, or an insurer where no producer is involved, to an individual consumer that results in a purchase, exchange, or replacement of an annuity in accordance with that advice.
"Replacement" means a transaction in which a new policy or contract is to be purchased, and it is known or should be known to the proposing producer, or to the proposing insurer if there is no producer, that by reason of the transaction, an existing policy or contract has been or is to be:
1. Lapsed, forfeited, surrendered, or partially surrendered, assigned to the replacing insurer or otherwise terminated;
2. 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;
3. 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;
4. Reissued with any reduction in cash value; or
5. Used in a financed purchase.
"Suitability information" means information that is reasonably appropriate to determine the suitability of a recommendation, including the following:
1. Age;
2. Annual income;
3. Financial situation and needs, including the financial resources used for the funding of the annuity;
4. Financial experience;
5. Financial objectives;
6. Intended use of the annuity;
7. Financial time horizon;
8. Existing assets, including investment and life insurance holdings;
9. Liquidity needs;
10. Liquid net worth;
11. Risk tolerance;
12. Tax status; and
13. Any other factors set forth in N.J.S.A. 17B:25-38b not referenced or subsumed in the factors set forth in 1 through 12 above.
