58-33A-20. Insurer's system for supervising recommendations.
An insurer shall establish a system to supervise recommendations that is reasonably designed to achieve compliance with §§58-33A-13 to 58-33A-27, inclusive, including:
(1)The insurer shall maintain reasonable procedures to inform its insurance producers of the requirements of §§58-33A-16 to 58-33A-26, inclusive and shall incorporate the requirements of this regulation into relevant insurance producer training manuals;
(2)The insurer shall establish standards for insurance producer product training and shall maintain reasonable procedures to require its insurance producers to comply with the requirements of §§58-33A-25.1 to 58-33A-25.3, inclusive;
(3)The insurer shall provide product-specific training and training materials that explain all material features of its annuity products to its insurance producers;
(4)The insurer shall maintain procedures for review of each recommendation prior to issuance of an annuity that are designed to ensure that there is a reasonable basis to determine that a recommendation is suitable. Such review procedures may apply a screening system for the purpose of identifying selected transactions for additional review and may be accomplished electronically or through other means including, physical review. Such an electronic or other system may be designed to require additional review only of those transactions identified for additional review by the selection criteria;
(5)The insurer shall maintain reasonable procedure to detect recommendations that are not suitable. This may include confirmation of consumer suitability information, systematic customer surveys, interviews, confirmation letters, and programs of internal monitoring. Nothing in this subdivision prevents an insurer from complying with this subdivision by applying sampling procedures or by confirming suitability information after issuance or delivery of the annuity; and
(6)The insurer shall annually provide a report to senior management, including to the senior manager responsible for audit functions, that details a review, with appropriate testing, reasonably designed to determine the effectiveness of the supervision system, the exceptions found, and corrective action taken or recommended, if any.
Source: SL 2008, ch 273, §8; SL 2012, ch 250, §7.