DFS Proposes Changes to Appearance of Annuity Cover Pages
The subject of annuities was addressed in the last days of the 2010 Florida Legislative Session in a general insurance bill (SB 2176), now Chapter 2010-175, Laws of Florida. The statute, section 626.99(4)(c), was amended to require cover pages for fixed and variable annuity contracts. For fixed annuities the statute requires the notice to be in the form “as provided by the National Association of Insurance Commissioners (NAIC) Annuity Disclosure Model Regulation, until such time as a buyer’s guide is developed by the department…” For variable annuities the statute permitted a policy summary contained in a prospectus until a buyer’s guide is developed by the NAIC or the department. The existing rule 69B-162 adopts numerous forms for the use in disclosure and comparison of annuity contracts.
The purpose of the proposed rule amendment is to revise the existing rule to reflect new provisions of Senate Bill 2176. The relevant statute, Section 626.99(4)(c), F.S., has been amended to require cover pages for fixed and variable annuity contracts. The notice for the rule states the effect of the proposed rule is to provide clear and concise information to consumers regarding the circumstances under which an annuity contract may be cancelled for an unconditional refund. In addition to mandatory formatting requirements, the proposed rule amendment requires annuity cover pages to contain specific cautionary language that informs consumers of the risks, policy features and contact sources for those seeking additional information or to report complaints.
A public hearing to address the changes to this rule will be held on August 16th at the Department of Financial Services. The text of the proposed rule is here.