(a) Before the recommendation or sale of an annuity, the producer shall prominently disclose to the consumer on a form substantially similar to Appendix A of the Spring 2020, National Association of Insurance Commissioners Suitability in Annuity Transactions Model Regulation:

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Terms Used In Hawaii Revised Statutes 431:10D-628

  • Annuity: A periodic (usually annual) payment of a fixed sum of money for either the life of the recipient or for a fixed number of years. A series of payments under a contract from an insurance company, a trust company, or an individual. Annuity payments are made at regular intervals over a period of more than one full year.
  • Contract: A legal written agreement that becomes binding when signed.
(1) A description of the scope and terms of the relationship with the consumer and the role of the producer in the transaction;
(2) An affirmative statement on whether the producer is licensed and authorized to sell the following products:

(A) Fixed annuities;
(B) Fixed indexed annuities;
(C) Variable annuities;
(D) Life insurance;
(E) Mutual funds;
(F) Stocks and bonds; and
(G) Certificates of deposit;
(3) An affirmative statement describing the insurers for whom the producer is authorized, contracted, appointed, or otherwise able to sell insurance products, using the following descriptions:

(A) From one insurer;
(B) From two or more insurers; or
(C) From two or more insurers, although primarily contracted with one insurer;
(4) A description of the sources and types of cash compensation and non-cash compensation to be received by the producer, including whether the producer is to be compensated for the sale of a recommended annuity by commission as part of premium or other remuneration received from the insurer, intermediary, or other producer or by fee as a result of a contract for advice or consulting services; and
(5) A notice of the consumer’s right to request additional information regarding cash compensation as described in subsection (b).
(b) Upon request of the consumer or the consumer’s designated representative, the producer shall disclose:

(1) A reasonable estimate of the amount of cash compensation to be received by the producer, which may be stated as a range of amounts or percentages; and
(2) Whether the cash compensation is a one-time or multiple occurrence amount, and, if a multiple occurrence amount, the frequency and amount of the occurrence, which may be stated as a range of amounts or percentages.
(c) Before or at the time of the recommendation or sale of an annuity, the producer shall have a reasonable basis to believe the consumer has been informed of various features of the annuity, such as the potential surrender period and surrender charge; potential tax penalty if the consumer sells, exchanges, surrenders, or annuitizes the annuity; mortality and expense fees; investment advisory fees; any annual fees; potential charges for and features of riders or other options of the annuity; limitations on interest returns; potential changes in non-guaranteed elements of the annuity; insurance and investment components; and market risk.

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