Key Takeaways
- Ohio requires delivery of the NAIC Annuity Buyer's Guide before or at the time of application
- Producers must disclose surrender charges, fees, and limitations before purchase
- The free look period for annuities is 10 days (20 days for senior citizens age 60+)
- All guaranteed and non-guaranteed elements must be clearly identified
- Replacement transactions require additional disclosure of comparative information
Ohio Annuity Disclosure Requirements
Ohio requires comprehensive disclosures to ensure consumers understand annuity products before purchase.
Buyer's Guide Requirement
Producers must provide the NAIC Annuity Buyer's Guide:
| Timing | Requirement |
|---|---|
| Standard Sale | At or before application |
| Replacement | Before application accepted |
| Direct Response | At policy delivery |
Contents of Buyer's Guide
The guide explains:
- How annuities work
- Types of annuities available
- Key questions to ask
- Understanding fees and charges
- Tax considerations
Fee and Charge Disclosures
Required Disclosures Before Sale
| Item | Disclosure Requirement |
|---|---|
| Surrender Charges | Complete schedule with duration |
| Administrative Fees | Annual fees and charges |
| Mortality & Expense | M&E charges for variable annuities |
| Subaccount Fees | Investment option expenses |
| Contract Charges | Any other applicable fees |
Surrender Charge Information
Producers must clearly explain:
- How surrender charges work
- Duration of surrender period
- Any free withdrawal provisions
- Impact on liquidity
Exam Tip: Ohio emphasizes that consumers must understand surrender charges before purchase. Failure to disclose is a serious violation.
Guaranteed vs. Non-Guaranteed Elements
All annuity illustrations must clearly distinguish:
What Must Be Labeled
| Element Type | Examples |
|---|---|
| Guaranteed | Minimum interest rate, death benefit minimum |
| Non-Guaranteed | Current interest rate, projected values |
| Illustrated | Hypothetical projections |
Free Look Period
Ohio provides a free look period for annuity purchasers:
Standard Free Look
| Buyer Age | Free Look Period |
|---|---|
| Under 60 | 10 days |
| 60 and older | 20 days |
Free Look Provisions
During the free look period:
- Buyer may return the annuity for full refund
- No questions asked
- No surrender charges apply
- Period begins when policy is delivered
Replacement Disclosures
When replacing an existing annuity, additional disclosures required:
Comparison Information
| Comparison Element | Requirement |
|---|---|
| Existing Benefits | Current surrender value, interest rate |
| New Benefits | New contract terms and rates |
| Surrender Charges | Existing charges if terminated |
| Tax Consequences | Potential tax impact of exchange |
| New Surrender Period | Length of new surrender period |
Replacement Notice
The replacement notice must:
- Be signed by the consumer
- Explain the impact of replacement
- Provide comparison of key features
- Disclose any commissions involved
Senior Consumer Protections
Ohio provides enhanced protections for seniors:
Age 60+ Protections
| Protection | Requirement |
|---|---|
| Extended Free Look | 20 days instead of 10 |
| Enhanced Disclosure | Additional suitability focus |
| Documentation | More detailed suitability records |
Senior-Specific Considerations
When selling to seniors, producers must:
- Carefully evaluate liquidity needs
- Consider shorter time horizons
- Document appropriateness of surrender period
- Ensure the senior understands the product
When must the NAIC Annuity Buyer's Guide be provided to Ohio consumers?
How long is the free look period for an annuity purchased by a 65-year-old in Ohio?
When replacing an existing annuity in Ohio, which disclosure is NOT required?
In an Ohio annuity illustration, which element must be labeled as "non-guaranteed"?
What happens if an annuity buyer returns the contract during Ohio's free look period?