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2009 Senate Bill 5671: Regarding consumer protections in the selling of annuities
Introduced by Sen. Jean Berkey, (D-Everett) (D) on January 28, 2009
Requires an annuity sold in Washington to be suitable to the age and financial situation of the owner. Purchasers are entitled to a clear written description of the annuity at the time of solicitation that has been reviewed by the insurance commissioner. Prior to issuing an annuity, the insurer must obtain sufficient information from the purchaser to verify the suitability of the proposed sale and to enable the prospective owner to make an informed purchase. (See also Companion HB 1563).   Official Text and Analysis.
Referred to the Senate Financial Institutions, Housing & Insurance Committee on January 28, 2009
Substitute offered in the Senate on February 19, 2009
To add oversight requirements with the option of using a third party to monitor compliance with the section. Also insurers and producers are not required to provide annuity disclosure forms with clear, written information about annuities. Other technical changes are made to allow more flexibility in the underlining bill.
The substitute passed by voice vote in the Senate on February 19, 2009
Referred to the Senate Rules Committee on February 19, 2009
Amendment offered by Sen. Jean Berkey, (D-Everett) (D) on March 6, 2009
To state that the suitability requirement does not affect securities regulation by the department of financial institutions.
The amendment passed by voice vote in the Senate on March 6, 2009
Received in the House on March 9, 2009
Referred to the House Financal Institutions & Insurance Committee on March 9, 2009
Amendment offered in the House on March 10, 2009
To require the Insurance Commissioner to notify the Legislature if there is a change in how annuities are regulated under the federal Securities Act of 1933 that impacts the exemption for compliance with FINRA standards.
The amendment passed by voice vote in the House on March 10, 2009
Referred to the House Rules Committee on March 12, 2009
Received in the Senate on March 20, 2009
Insurers and producers must comply with a number of requirements in recommending or selling an annuity: they must have reasonable grounds to believe the recommendation is suitable; must make reasonable efforts to obtain relevant information from the client; and must make recommendations that are reasonable in light of all circumstances actually known to the insurer and producer. Insurer is not liable if client refuses to offer information or comply with requests for information. Insurer must make information available to the commissioner when requested.
Signed by Gov. Christine Gregoire on March 30, 2009