State RegulationsFL specificDifficulty 2/5
Which statement about a Florida agent's obligations when recommending an annuity is correct?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Under Chapter 627, Florida Statutes, an agent recommending an annuity must make a reasonable inquiry into the consumer's financial status, tax status, investment objectives, and other information reasonably necessary to support a suitable, best-interest recommendation. The duty applies at the point of recommendation, covers fixed and variable annuities alike, and is enforced by the DFS through license discipline.
Why the other options are wrong
- A) Premium size is just one fact among many; suitability is judged on the consumer's whole situation.
- B) The duty focuses on the recommendation itself, so it is fully operative before and when the application is signed.
- C) Suitability obligations apply to annuity recommendations generally, not only to variable products.
Memory hook
Know your client before you pick the product.