Assigned to FIN                                                                                                            AS PASSED BY HOUSE

ARIZONA STATE SENATE

Fifty-Fourth Legislature, First Regular Session

AMENDED

FACT SHEET FOR S.B. 1534

fixed-index annuities; disclosure; indexing

(NOW: annuity disclosure; rules)

            As passed by the Senate, S.B. 1534 provided use and retention requirements for documents relating to sales of a fixed-index annuity.

            The House of Representatives adopted a strike-everything amendment that does the following:

Purpose

            Requires the Department of Insurance (DOI) to adopt rules relating to the National Association of Insurance Commissioners annuity disclosure model regulation.                                                                           

Background

            Current statute requires that if an application for an annuity contract is taken in a
face-to-face meeting, the applicant, at or before the time of application, is given both the disclosure document and the annuity buyer's guide in the form prescribed by the Director of the DOI (A.R.S. § 20-1242.02).

            If the application for an annuity contract is taken by means other than in a face-to-face meeting, the applicant shall be sent both the disclosure document and the annuity buyer's guide no later than five business days after the completed application is received by the insurer.

            Statute also requires that a solicitation for an annuity contract provided in other than a
face-to-face meeting shall include a statement that the proposed applicant may contact the insurer for a free annuity buyer's guide. If the annuity buyer's guide and disclosure document are not provided at or before the time of application, a free look period of at least 15 days shall be provided for the applicant to return the annuity contract without penalty. This free look period shall run concurrently with any other free look period provided under statute.

            There is no anticipated fiscal impact to the state General Fund associated with this legislation.

Provisions

1. Requires the DOI, within one year after the effective date, to adopt rules relating to: 

a) the National Association of Insurance Commissioners annuity disclosure model regulation, effective on the effective date; and

b) illustration requirements specific to participating immediate and deferred income annuities.

2. Becomes effective on the general effective date.

Amendments Adopted by the House of Representatives

· Adopted the strike-everything amendment related to annuity disclosure rules.

House Action

COM               3/26/19      DPA/SE      9-0-0-0

3^rd Read          5/6/19                            58-0-2

Prepared by Senate Research

May 6, 2019

CS/kja