State RegulationsPA specificDifficulty 2/5
During a replacement review under Pennsylvania's annuity suitability rules, the producer learns the consumer replaced an annuity two years ago. Which consideration does the suitability analysis require regarding that prior transaction?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Pennsylvania's annuity suitability framework under Act 48 of 2018 (40 P.S. § 627-1 et seq.) requires the replacement review to consider whether the consumer has had another annuity replacement within the preceding 36 months. A recent history of replacements signals potential churning and weighs directly against recommending yet another exchange. The producer must weigh that fact in the suitability analysis and record the recommendation in writing.
Why the other options are wrong
- A) The relative charter dates of the insurer and producer have no place in the suitability analysis; the focus is the consumer's replacement history.
- C) Whether the old contract sits inside a cafeteria plan is not the required replacement consideration; the lookback is on prior annuity replacements.
- D) Complaint history with the Pennsylvania Insurance Department may be relevant to a producer's standing, but it is not the replacement-review factor the suitability rule requires.
Memory hook
Replaced before? Look back 36 months before recommending another swap.