Key Takeaways
- Georgia requires a 10-day free look period for all annuity contracts
- Georgia has adopted the NAIC Suitability in Annuity Transactions Model Regulation
- Producers must document suitability analysis before recommending annuities
- Annuity replacements require detailed comparison disclosures
- Georgia prohibits annuity sales that are clearly unsuitable for the customer
Georgia Annuity Regulations
Georgia has adopted comprehensive annuity regulations to protect consumers from unsuitable sales and deceptive practices.
Free Look Period
Georgia provides a 10-day free look period for annuity contracts:
- Applies to all annuity types (fixed, variable, indexed)
- Buyer can return for full premium refund
- No penalty for exercising free look
- Period begins when contract is delivered
Suitability Requirements
Georgia adopted 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 |
Best Interest Standard
Georgia requires:
- Recommendations in the best interest of the consumer
- Producer cannot place own interest above customer's interest
- Material conflicts must be disclosed
- Enhanced documentation requirements
Senior Consumer Protections
Georgia provides additional protections for senior consumers:
Enhanced Disclosures
For consumers age 65 or older:
- Clear explanation of surrender charges and duration
- Explanation of how annuity fits their financial needs
- Disclosure of all fees and charges
- Information about liquidity restrictions
Unsuitable Sales
The following are considered red flags for unsuitable sales to seniors:
- Annuities with surrender periods exceeding life expectancy
- Tying up all liquid assets in illiquid products
- Products not matching stated objectives
- Switching existing annuities to trigger new surrender periods
Surrender Charge Disclosures
Georgia requires clear disclosure of surrender charges:
| Disclosure | Requirement |
|---|---|
| Surrender Schedule | Must provide complete schedule |
| Free Withdrawal | Must disclose any penalty-free amounts |
| Duration | Must clearly state how long charges apply |
| Dollar Amount | Must show actual dollar impact |
Replacement Requirements
When replacing an existing annuity, producers must:
Documentation Required
- Comparison statement - Side-by-side comparison of old and new contract
- Replacement form - Signed acknowledgment of replacement
- Suitability analysis - Why replacement is appropriate
- Notice to existing insurer - Notification of pending replacement
Red Flags for Churning
The Commissioner scrutinizes replacements for:
- Short holding periods before replacement
- Surrender charges not fully explained
- New surrender charge period starting over
- Commission-motivated transactions
- Pattern of replacements by same producer
What is the free look period for annuity contracts in Georgia?
Under Georgia suitability regulations, what must a producer do before recommending an annuity?