Before recommending an annuity, a California producer must evaluate suitability information about the consumer. Under the annuity suitability standards of CIC Section 10509.913, all of the following are factors the producer must consider when determining whether a recommendation is suitable EXCEPT:

Why D is correct

California's annuity suitability standards require the recommendation to be based on the consumer's own circumstances - age, income, financial experience, objectives, time horizon, and risk tolerance - never on the producer's compensation. A producer who recommends an annuity because it pays a high commission or wins a sales contest is placing personal gain ahead of the client's needs, which is exactly what the suitability rules and the ethical duty to put the client's interest first are designed to prevent.

Why the other options are wrong

• A) Age, income, and financial experience are core suitability factors; for example, an elderly client with limited market experience is generally a poor match for a market-risk product.
• B) The consumer's objectives and time horizon determine whether the product's features fit; a client who needs immediate guaranteed income should not be steered into an accumulation product.
• C) Risk tolerance is central to suitability; recommending a variable product to a consumer who cannot tolerate market risk is unsuitable regardless of any disclosure.

Memory hook

Suitable means the product fits the client, not just that the client signed. Paper cannot fix a bad match.