Florida Annuity Regulations

Florida has adopted comprehensive annuity regulations to protect consumers from unsuitable sales and deceptive practices.

Free Look Period

Florida provides a 14-day free look period for annuity contracts:

• Applies to all annuity types (fixed, variable, indexed)
• Buyer can return for full premium refund
• No penalty for exercising free look
• Period begins when contract is delivered

Suitability Requirements

Florida adopted the NAIC Suitability in Annuity Transactions Model Regulation effective January 2021:

Best Interest Standard

Producers must act in the best interest of the consumer when recommending annuities:

1. Care Obligation - Exercise reasonable diligence, care, and skill
2. Disclosure Obligation - Provide full and fair disclosure
3. Conflict of Interest Obligation - Identify and avoid or disclose conflicts
4. Documentation Obligation - Document the basis for recommendations

Required Information Gathering

Supervision Requirements

Insurers must:

• Establish suitability supervision systems
• Train producers on suitability requirements
• Review producer recommendations
• Take corrective action when needed

Senior Consumer Protections

Florida has special rules for annuity sales to seniors:

Enhanced Disclosures for Seniors (65+)

• Clear explanation of surrender charges and periods
• Disclosure of when benefits become available
• Comparison with existing contracts if replacement
• Written confirmation of suitability

Prohibited Practices

Producers cannot:

• Use high-pressure tactics on seniors
• Misrepresent liquidity of annuity products
• Fail to consider reduced life expectancy in recommendations
• Recommend products with surrender periods extending beyond reasonable life expectancy

Surrender Charge Disclosure

Florida requires detailed surrender charge disclosure:

Replacement Requirements

When replacing an existing annuity, producers must:

Documentation Required

1. Comparison statement - Side-by-side comparison of old and new contract
2. Replacement form - Signed acknowledgment of replacement
3. Suitability analysis - Why replacement is in consumer's best interest
4. Notice to existing insurer - Notification of pending replacement

Considerations for Replacement

• Loss of guaranteed rates on existing contract
• New surrender charge period starting
• Tax consequences of exchange or surrender
• Loss of policy benefits or riders
• Impact of age on new contract pricing

Variable Annuity Requirements

Variable annuities have additional requirements in Florida:

Licensing Requirements

To sell variable annuities:

• Florida 2-14 or 2-15 license
• Florida 6-15 Variable Annuity license
• FINRA Series 6 or Series 7 registration
• State securities registration

Disclosure Requirements

Variable annuity sales must include:

• Prospectus delivery before or at sale
• Clear explanation of investment risks
• Fee disclosure (mortality, expense, investment)
• Disclosure that values can decrease

Indexed Annuity Requirements

Indexed (equity-indexed) annuities:

Key Disclosure Points

Florida-Specific Rules

• Indexed annuities treated as fixed products (not securities)
• Suitability requirements still apply
• Producer must explain how product works
• Must be suitable for consumer's risk tolerance