State RegulationsTN specificDifficulty 1/5
Under Tennessee's suitability and best-interest rule for annuities, whose financial interest must a producer place first when making a recommendation?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Tenn. Comp. R. & Regs. 0780-01-86 establishes a best-interest obligation: when a Tennessee producer recommends an annuity, the consumer's financial interest controls and must be placed ahead of the producer's and the insurer's interests. The Tennessee Department of Commerce & Insurance adopted this consumer-first standard as the foundation of its annuity suitability framework.
Why the other options are wrong
- A) Later client approval does not reorder the duties; the producer's obligation to put the consumer first applies at the time of the recommendation.
- C) The insurer's interest in the transaction is subordinate to the consumer's under the best-interest standard.
- D) Who bears the commission is a compensation question, not the measure of whose interest the recommendation must serve.
Memory hook
Best interest means the buyer's interest — the rule says so before anything else.