Key Takeaways
- Virginia requires a 10-day free look period for all annuity contracts
- Virginia adopted the NAIC Suitability in Annuity Transactions Model Regulation
- Producers must act in the best interest of the consumer when recommending annuities
- Annuity replacements require detailed comparison and disclosure documents
- Virginia prohibits misrepresentation and deceptive practices in annuity sales
Last updated: January 2026
Virginia Annuity Regulations
Virginia has adopted comprehensive annuity regulations to protect consumers from unsuitable sales and deceptive practices.
Free Look Period
Virginia 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
Virginia 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
Virginia requires:
- Recommendations in the best interest of the consumer
- Compensation cannot be primary motivator
- Material conflicts must be disclosed
- Enhanced documentation requirements
Surrender Charge Disclosures
Virginia requires clear disclosure of surrender charges:
| Disclosure | Requirement |
|---|---|
| Surrender Schedule | Must be clearly explained |
| Duration | Full period disclosed |
| Free Withdrawal | Any penalty-free access explained |
| Market Value Adjustment | If applicable, disclosed |
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 Replacements
The Bureau scrutinizes replacements for:
- Short holding periods before replacement
- Surrender charges not fully explained
- New surrender charge period starting over
- Commission-motivated churning
Variable Annuity Requirements
Variable annuities in Virginia have additional requirements:
Securities Registration
- Variable annuities are securities
- Producer must hold FINRA Series 6 or 7 license
- Must be registered with Virginia securities division
- Subject to both insurance and securities regulations
Disclosure Requirements
- Prospectus must be delivered
- Fees and expenses clearly disclosed
- Investment options explained
- Risk factors highlighted
Test Your Knowledge
How long is the free look period for annuity contracts in Virginia?
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Test Your Knowledge
Under Virginia annuity suitability rules, what standard must producers meet when recommending annuities?
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