State RegulationsCA specific✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
Under Section 10509.912, California's annuity suitability requirements do NOT apply to an annuity used to:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Section 10509.912(b)(5) exempts from the suitability article contracts used for settlements of or assumptions of liabilities associated with personal injury litigation or any dispute or claim resolution process. Structured settlement annuities, which fund periodic payments to personal injury claimants, fall within this exemption because the settlement process and court or administrative oversight already protect the claimant's interests.
Why the other options are wrong
- B) A retirement income annuity sold to a consumer over 65 is individually solicited and fully subject to the suitability requirements.
- C) A replacement transaction must meet suitability analysis and disclosure obligations, not an exemption.
- D) An immediate annuity for a retired teacher is an individually solicited annuity subject to the suitability rules.
Memory hook
Personal injury structured settlements skip the suitability form: the litigation settlement process already watched over the deal.