State RegulationsFL specificDifficulty 1/5
When recommending an annuity to a Florida consumer, what standard must the agent's recommendation meet?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under Florida law administered by the Office of Insurance Regulation and the Department of Financial Services (Chapter 626, Florida Statutes), a recommendation to purchase or replace an annuity must be in the consumer's best interest at the time it is made, based on the consumer's needs and financial circumstances. The agent must have a reasonable basis for the recommendation - not merely offer the cheapest product, the agent's personal favorite, or a product another insurer happens to bless.
Why the other options are wrong
- B) Best interest is judged against the consumer's needs and circumstances, not a lowest-price test.
- C) The agent's personal preference is not the benchmark for the consumer's best interest.
- D) No advance approval from the consumer's existing insurer is required for a suitable recommendation.
Memory hook
Best interest = the consumer's needs, at that moment.