Which finra rule covers suitability of sales of variable annuities?

Which finra rule covers suitability of sales of variable annuities?

FINRA Rule 2330
FINRA Rule 2330 (Members’ Responsibilities Regarding Deferred Variable Annuities) establishes sales practice standards regarding recommended purchases and exchanges of deferred variable annuities, including requiring a reasonable belief that the customer has been informed of the various features of annuities (such as …

What 2 entities regulate the sale of variable annuities?

Variable annuities are securities registered with the Securities and Exchange Commission (SEC), and sales of variable insurance products are regulated by the SEC and FINRA.

What does finra Rule 2330 apply to?

Rule 2330 requires a registered principal to review and determine whether to approve a customer’s application for a deferred variable annuity before sending the application to the issuing insurance company.

How long does a principal have to review a recommended variable annuity transaction and make a suitability determination?

Under the earlier version of paragraph (c) of NASD Rule 2821, principals were required to review and determine whether to reject or approve a deferred variable annuity transaction no later than seven business days after the customer signed the 2 Regulatory Notice June 2009 09-32 Page 3 application.

When would a variable annuity be most suitable for a client?

A variable annuity would be MOST suitable for which of the following customers? A variable annuity is most suitable for an investor seeking long-term, tax-deferred income for retirement. A tax-deferred investment, as with a variable annuity, becomes more advantageous for an investor with a higher tax bracket.

Do you have to register with finra to sell variable annuities?

In addition to receiving state oversight, variable annuities are regulated at the federal level by the U.S. Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). Anyone selling variable annuities must carry a securities license.

What is the difference between fixed annuity and variable annuity?

A fixed annuity guarantees payment of a set amount for the term of the agreement. It can’t go down (or up). A variable annuity fluctuates with the returns on the mutual funds it is invested in. Its value can go up (or down).

Which annuity is the only one regulated by the SEC finra and state insurance departments?

Which annuity is the only one regulated by the SEC, FINRA, and State insurance departments? Variable annuities are regulated by the SEC, FINRA, and State insurance departments. While annuities provide many types of benefits, they are not suitable for everyone and in every situation.

How can a violation of the suitability regulations be reduced or eliminated?

Any applicable penalty under [insert statutory citation] for a violation of this regulation may be reduced or eliminated [, according to a schedule adopted by the commissioner,] if corrective action for the consumer was taken promptly after a violation was discovered or the violation was not part of a pattern or …

What types of annuities have a step up in cost basis for federal income tax purposes?

For variable annuity contracts issued prior to 10/21/79, there is a “step-up” in basis for income tax purposes and no income tax is payable on the earnings. Qualified annuities refers to an annuity that is purchased inside of a qualified retirement plan, like an Individual Retirement Account (IRA).

What are the FINRA rules for variable annuities?

FINRA Rule 2320 (Variable Contracts of an Insurance Company) contains important requirements regarding cash and non-cash compensation arrangements associated with variable annuity sales. Rule 2330 establishes sales practice standards regarding recommended purchases and exchanges of deferred variable annuities.

What are the rules for variable life insurance?

2211. Communications with the Public About Variable Life Insurance and Variable Annuities The standards governing communications with the public are set forth in Rule 2210.

How to contact FINRA about variable life insurance?

2211. Communications with the Public About Variable Life Insurance and Variable Annuities | FINRA.org Registered representatives can fulfill Continuing Education requirements, view their industry CRD record and perform other compliance tasks. Firm compliance professionals can access filings and requests, run reports and submit support tickets.

When to approve a deferred variable annuity application?

Rule 2330 requires a registered principal to review and determine whether to approve a customer’s application for a deferred variable annuity before sending the application to the issuing insurance company. This must occur no later than seven business days after an office of supervisory jurisdiction receives a complete and correct application.