Key Takeaways
- Nevada requires suitability analysis before recommending annuity products
- Annuity contracts must include a free look period for consumer review
- Nevada follows NAIC Suitability in Annuity Transactions Model Regulation
- Replacement transactions require detailed disclosure and comparison
- Annuity incontestability is governed by NRS 688A.200
Nevada Annuity Regulations
Nevada has adopted comprehensive annuity regulations to protect consumers from unsuitable sales and deceptive practices.
Suitability Requirements
Nevada follows the NAIC Suitability in Annuity Transactions Model Regulation:
Producer Duties
Before recommending an annuity, the producer must:
- Make reasonable efforts to obtain customer information
- Analyze whether the recommendation is suitable
- Document the basis for the recommendation
- Disclose all material information about the product
Required Information
| Category | Information Required |
|---|---|
| Financial Status | Income, liquid assets, financial needs |
| Tax Status | Tax bracket, qualified vs. non-qualified funds |
| Investment Objectives | Goals, time horizon, risk tolerance |
| Existing Coverage | Current annuities and life insurance |
| Liquidity Needs | Expected need for funds |
Annuity Incontestability (NRS 688A.200)
For annuity or pure endowment contracts:
- 2-year incontestability from date of issue
- Applies during the lifetime of the annuitant
- Exceptions for nonpayment of stipulated payments
- Disability and accidental death provisions may be excepted
Free Look Period
Nevada provides a free look period for annuity contracts:
- Buyer can return for full premium refund
- No penalty for exercising free look
- Period begins when contract is delivered
Senior-Specific Protections
Nevada has protections for annuity sales to seniors:
Enhanced Disclosures
Seniors must receive:
- Clear explanation of surrender charges
- Comparison with existing contracts
- Written confirmation of suitability
- Information about withdrawal restrictions
Annuity Best Interest Standard (Effective November 15, 2024)
Nevada adopted the NAIC Suitability in Annuity Transactions Model Regulation with best interest amendments:
Producer Obligations
| Obligation | Requirement |
|---|---|
| Care | Exercise reasonable diligence, care, and skill |
| Disclosure | Disclose role, compensation, and material conflicts |
| Conflict of Interest | Identify and avoid/mitigate conflicts |
| Documentation | Document basis for recommendation |
Required Training
| Requirement | Detail |
|---|---|
| Hours | 4-hour one-time course |
| When | Before selling annuity products |
| Content | Best interest standard requirements |
| Provider | Nevada DOI-approved |
Supervision Requirements
Insurance companies must:
- Establish and maintain supervision system
- Train producers on best interest requirements
- Review recommendations for compliance
- Take corrective action when violations occur
Important: As of November 15, 2024, Nevada producers must complete 4 hours of annuity best interest training before selling annuity products.
Annuity Free Look Period
| Policy Type | Free Look Period |
|---|---|
| Standard Annuity | 10 days |
| Replacement Annuity | 10 days minimum |
| Senior (65+) | Consider extended period |
What must a Nevada producer do before recommending an annuity?
What is the incontestability period for annuity contracts in Nevada under NRS 688A.200?