2008 Legislation
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HOUSE BILL NO. 411<br /> – Annuity sales, consumers


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Bill Status

H0411...........................................................by BUSINESS
ANNUITY SALES - Amends existing law relating to annuities to provide for
annuity sales to consumers.

01/24    House intro - 1st rdg - to printing
01/25    Rpt prt - to Bus
02/22    Rpt out - rec d/p - to 2nd rdg
02/25    2nd rdg - to 3rd rdg
02/26    3rd rdg - PASSED - 67-0-3
      AYES -- Anderson, Andrus, Barrett, Bayer, Bedke, Bell, Bilbao, Black,
      Block, Bock, Boe, Bolz, Bowers, Brackett, Bradford, Chadderdon,
      Chavez, Chew, Collins, Crane, Durst, Eskridge, Hagedorn, Hart,
      Harwood, Henbest, Henderson, Jaquet, Killen, King, Kren, Labrador,
      LeFavour, Loertscher, Luker, Marriott, Mathews, McGeachin, Mortimer,
      Moyle, Nielsen, Nonini, Pasley-Stuart, Pence, Raybould, Ringo,
      Roberts, Ruchti, Rusche, Sayler, Schaefer, Shepherd(02),
      Shepherd(08), Shirley, Shively, Smith(24), Smith(30)(Stanek),
      Snodgrass, Stevenson, Thayn, Thomas, Trail, Vander Woude, Wills,
      Wood(27), Wood(35), Mr. Speaker
      NAYS -- None
      Absent and excused -- Clark, Lake, Patrick
    Floor Sponsor - Collins
    Title apvd - to Senate
02/27    Senate intro - 1st rdg - to Com/HuRes
03/12    Rpt out - rec d/p - to 2nd rdg
03/13    2nd rdg - to 3rd rdg
03/14    3rd rdg - PASSED - 33-0-2
      AYES -- Andreason, Bair, Bastian, Broadsword, Burkett, Cameron,
      Coiner, Corder, Darrington, Davis, Fulcher, Gannon, Geddes, Goedde,
      Hammond, Heinrich, Hill, Kelly, Keough, Langhorst, Little, Lodge,
      Malepeai(Sagness), McGee, McKague, McKenzie, Pearce, Richardson,
      Schroeder, Siddoway, Stegner, Stennett, Werk
      NAYS -- None
      Absent and excused -- Bilyeu, Jorgenson
    Floor Sponsor - Andreason
    Title apvd - to House
03/17    To enrol - Rpt enrol - Sp signed
03/18    Pres signed - To Governor
03/19    Governor signed
         Session Law Chapter 202
         Effective: 07/01/08

Bill Text

  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-ninth Legislature                   Second Regular Session - 2008


                              IN THE HOUSE OF REPRESENTATIVES

                                     HOUSE BILL NO. 411

                                   BY BUSINESS COMMITTEE

  1                                        AN ACT

  4    Be It Enacted by the Legislature of the State of Idaho:

  5        SECTION  1.  That  Section 41-1940, Idaho Code, be, and the same is hereby
  6    amended to read as follows:

  8    mending  to a senior consumer the purchase of an annuity or the exchange of an
  9    annuity that results in an insurance transaction  or  a  series  of  insurance
 10    transactions,  the  insurance  producer,  or  the insurer where no producer is
 11    involved, shall have reasonable grounds for believing that the  recommendation
 12    is suitable for the senior consumer on the basis of the facts disclosed by the
 13    senior  consumer  as  to the senior consumer's investments and other insurance
 14    products and as to the senior consumer's age, financial situation and needs.
 15        (2)  For purposes of this section, "senior consumer" means a person sixty-
 16    five (65) years of age or older. In the event of a joint purchase by more than
 17    one (1) party, the purchaser will be considered a senior consumer  if  any  of
 18    the parties is sixty-five (65) years of age or older.
 19        (3)  Prior  to  the  execution  of  a  purchase  or exchange of an annuity
 20    resulting from a recommendation, an insurance producer, or an insurer where no
 21    producer is involved, shall make reasonable efforts to obtain information con-
 22    cerning:
 23        (a)  The senior consumer's financial status;
 24        (b)  The senior consumer's tax status;
 25        (c)  The senior consumer's investment objectives; and
 26        (d)  Such other information used or considered to  be  reasonable  by  the
 27        insurance  producer, or the insurer where no producer is involved, in mak-
 28        ing recommendations to the senior consumer.
 29        (43)  Neither an insurance producer, nor an insurer where no  producer  is
 30    involved,  shall  have  any obligation to a senior consumer under this section
 31    related to any recommendation if a senior consumer:
 32        (a)  Refuses to provide relevant information requested by the  insurer  or
 33        insurance producer;
 34        (b)  Decides to enter into an insurance transaction that is not based upon
 35        a recommendation of the insurer or insurance producer; or
 36        (c)  Fails to provide complete and accurate information.
 37        (54)  This section shall not apply to recommendations involving:
 38        (a)  Direct  response solicitations where there is no recommendation based
 39        upon information collected from the senior consumer;
 40        (b)  Contracts used to fund employee retirement or  benefit  plans  estab-
 41        lished or maintained by an employer;
 42        (c)  Settlements of or assumptions of liabilities associated with personal
 43        injury litigation or any dispute or claim resolution process; or


  1        (d)  Contracts  or  transactions exempted pursuant to rules promulgated by
  2        the director, where the director has determined the  protections  of  this
  3        law are not necessary.
  4        (65)  The  director  may promulgate rules pursuant to this section for the
  5    protection of senior consumers in annuity transactions.
  6        (76)  Nothing in this section shall be construed to create or imply a pri-
  7    vate cause of action for a violation of this section or rules promulgated pur-
  8    suant to this section.

Statement of Purpose / Fiscal Impact

                      STATEMENT OF PURPOSE

                            RS 17350

In 2005, the Legislature enacted HB 117 (Idaho Code § 41-1940) 
requiring that persons selling annuities to senior consumers 
have reasonable grounds for believing that the recommended 
product is suitable for the senior consumer.  A senior consumer 
is defined as a person 65 years old or older.  Section 41-1940 
is based on a model law developed by the National Association of 
Insurance Commissioners (NAIC).  Annuity products often consist 
of complex financial contracts and the problem of unsuitable 
products can arise with consumers of any age.  Recognizing this 
fact, the NAIC has amended the model annuity suitability law to 
make its provisions applicable to consumers all ages.  This 
proposal would amend Idaho’s suitability law to make it 
consistent with the latest version of the model law by extending 
suitability protections to annuity purchasers of all ages.

                          FISCAL NOTE

No Fiscal Impact.

Name:	Jim Genetti
Agency:	Insurance, Dept. of
Phone:	334-4340