Suitability in Annuity Transactions Model Regulation #275

In Spring of 2020, the NAIC approved revisions to the Suitability in Annuity Transactions Model Regulation #275 requiring producers to use “reasonable diligence, care and skill” in making recommendations and to act in the “best interest” of consumers. Learn more about the new model reg and what Nassau is doing to comply with the help of Angelus Tammaro, our Director of Compliance.

In states which have adopted these new NAIC model regulations or similar regulations, all recommendations or sales must be in the best interest of the client. Under these new regulations, in addition to existing suitability requirements:

  • The client’s interest must be prioritized
  • Recommendations and sales must effectively address the client’s unique financial situation, insurance needs and financial objectives
  • Producers must meet specific “best interest” obligations regarding care, disclosure, conflict of interest and documentation

The following is a summary of new producer responsibilities under the 2020 NAIC Suitability in Annuity Transactions model regulation:*

  • Complete new training credits prior to any state deadline
  • Obtain a signed “Insurance Agent (Producer) Disclosure for Annuities” form at the time of recommendation or sale
  • Obtain additional signed forms if a consumer refuses to provide certain information or is making a purchasing decision against a producer’s recommendation**
  • Avoid and disclose any material conflict of interest
  • If requested by the client, disclose any cash and non-cash compensation in the form of a range or percentage
  • Communicate the basis or bases of any recommendation to the client and make a written record of any recommendation, the basis for the recommendation and any disclosures provided (including oral disclosures)


Similar to the 2010 model regulation, states that adopt the new 2020 model regulation will require advisors new to selling annuities to complete a four hour continuing education (CE) credit annuity training. Experienced advisors, previously trained under the 2010 model suitability model regulation, must complete either a new four hour CE credit course or an additional one-time, one hour CE credit course.

Nassau continues to partner with Pinpoint Global, an outside vendor, to meet the training needs of our appointed producers. New state-required CE courses are expected to be available in late December 2020 and January 2021 through Nassau’s online NAIC Product Training Center, powered by LIMRA and accessible through Salesnet. Training may also be completed via an outside vendor such as LIMRA or RegEd, provided that vendor’s valid certification confirming course completion is submitted to Nassau. Copies of completed courses taken outside of our Pinpoint Global Site vendor can be submitted to our contracting team at

Product-specific training requirements have not changed and product training courses will be updated to include information related to the new 2020 NAIC model suitability regulations.

To avoid interruption in processing new business with Nassau, producers in states which have adopted these new regulations must complete their CE credits no later than applicable state deadlines. For more information, including state-by-state training requirements, refer to the Annuity Training Requirements on Salesnet.

At the time of recommendation or sale, a signed copy of the “Insurance Agent (Producer) Disclosure for Annuities” form (OL5420) must be provided to the customer and retained in the producer’s records. Nassau will not require a copy to be submitted with new applications. This form will be made available to producers when using eApp or the Apps and Forms Search page on Salesnet based on the requirements of the state where new business is being submitted.

Nassau currently requires producers to retain written records of recommendations made to consumers, including how the Nassau annuity you recommended meets your client’s needs and objectives. For additional information regarding producer responsibilities related to maintaining records, review the Nassau Compliance Guide on Salesnet.

To help Nassau meet our regulatory obligations, producers in states which have adopted the new model regulation (or similar regulations) will be required to indicate on the Annuity Suitability Questionnaire that the new “Insurance Agent (Producer) Disclosure for Annuities” form has been provided to the client. For eApp submissions, the new question will appear automatically on the questionnaire in states where it is required. For paper submissions, be sure to use the most recent state-specific forms made available through the Apps and Forms Search page on Salesnet.

Under the new model regulations, the following must be considered for exchange and replacement transactions:

  • Surrender charges, loss of benefits, increased fees or charge
  • If the consumer will see a substantial benefit over the life of the product
  • If there has been more than one exchange or replacement within the preceding 60 months

Nassau has always demonstrated a strong commitment to complying with the replacement model regulations and applicable state laws, and has discouraged producers from recommending a replacement transaction unless it is in the best interest of the client. All replacement transactions must meet Nassau’s internal suitability requirements.

To comply with the new model regulations and applicable state laws, Nassau is revising our Replacement Comparison Worksheet to extend the “lookback” period for replacement transactions from 36 months to 60 months. No other changes to Nassau’s suitability review process are expected at this time and all replacement transactions will continue to be escalated to a Nassau Suitability Analyst for a heightened level of review. As a reminder, Nassau will not consider an application if the existing contract being replaced is less than 24 months old (36 months if the same producer who sold the existing contract is also selling the replacement contract).

We thank you for your continued partnership and hope you found this information helpful. We encourage you to check back frequently for any updates to this article and other suitability information on Salesnet in the coming few months.

*This is only a summary. You are required to comply with all suitability regulations that are applicable in the state in which you are selling or recommending the purchase of an annuity.

**Nassau will not issue a contract if the Annuity Suitability Questionnaire is not completed or if the sale was not recommended by the producer.


For Producer Use Only. Not for use in solicitation or advertising to the Public.

Product features, rider options and availability may vary by state. Actual product details, including all terms and conditions that apply, are contained in the annuity contract. Product sales must be appropriate based on a comprehensive evaluation of the customer’s financial situation, needs, and objectives. Lifetime payments and guarantees are based on the claims-paying ability of the issuing company.

Annuities are issued by Nassau Life and Annuity Company (Hartford, CT). In California, Nassau Life and Annuity Company does business as “Nassau Life and Annuity Insurance Company.” Nassau Life and Annuity Company is not authorized to conduct business in MA, ME, and NY, but that is subject to change. In New York, annuities are issued by Nassau Life Insurance Company (East Greenbush, NY). Nassau Life and Annuity Company and Nassau Life Insurance Company are subsidiaries of Nassau Financial Group. The insurers are separate entities and each is responsible only for its own financial condition and contractual obligations.

Insurance Products: NOT FDIC or NCUAA Insured | NO Bank or Credit Union Guarantee.

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Anthony LaRosaSuitability in Annuity Transactions Model Regulation #275