State RegulationsCA specific✓ Verified · outline & fact-checked · Sep 2026Difficulty 3/5
Under California's annuity suitability rule, a producer's annuity recommendation must be:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
California's suitability standard (Section 10509.913) requires the producer to gather suitability information — including age, income, financial situation, time horizon, liquidity needs, and risk tolerance — and to base any recommendation on that information so the annuity is suitable for the consumer. Recommending without adequate information, or steering the consumer toward a product that does not fit their needs, violates the standard.
Why the other options are wrong
- B) Home-office approval of sales materials is a separate insurer practice; the suitability obligation rests on the producer's recommendation process.
- C) Producer profitability is never a legitimate basis for a recommendation; suitability to the consumer governs.
- D) The rule does not limit products to fixed annuities; it requires that whatever annuity is recommended fit the consumer's collected profile.
Memory hook
Fit the product to the person, not the person to the commission. Suitability starts with gathered facts.