State RegulationsFL specificDifficulty 2/5
Under Florida law governing annuity transactions, what does the best-interest standard require of a producer who recommends an annuity to a consumer?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Under Chapter 627, Florida Statutes, and DFS rules implementing the best-interest standard, a producer recommending an annuity must have a reasonable basis to believe the recommendation suits the consumer's financial situation, insurance needs, and financial objectives, and must act without placing the producer's own financial interest ahead of the consumer's. Performance guarantees and lowest-price tests are no part of the standard; reasonable inquiry, care, and disclosure are.
Why the other options are wrong
- A) No Florida standard requires a performance guarantee; suitability focuses on the consumer's circumstances, not future returns.
- B) A legal opinion is not required; the producer's own reasonable inquiry and documentation satisfy the standard.
- C) Lowest cost is not the test; the cheapest contract can still be unsuitable for the consumer's objectives.
Memory hook
Best interest: the client's needs, not your commission.