State RegulationsCO specificDifficulty 2/5
Before recommending that a client exchange an existing annuity, a Colorado producer must take which step under the Colorado Division of Insurance's suitability requirements?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under the Colorado Division of Insurance's suitability requirements for life and annuity sales, the producer must make a reasonable effort to gather client information and determine that the recommendation — including an exchange — fits the client's financial situation, insurance needs, and objectives before proceeding.
Why the other options are wrong
- B) No client waiver relieves the producer of the suitability obligation.
- C) Suitability must be evaluated before the recommendation and delivery, not afterward.
- D) Suitability review rests with the producer and insurer; the Division does not perform individual suitability reviews.
Memory hook
Know the client before you recommend — suitability first.