Before recommending an annuity to a consumer under Pennsylvania's suitability law (Act 48 of 2018), what must a producer obtain?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Pennsylvania's annuity suitability law, adopted through Act 48 of 2018 and codified at 40 P.S. § 627-1 et seq., requires the producer to obtain suitability information before recommending an annuity: the consumer's age, income, financial situation and needs, financial experience, objectives, intended use of the funds, time horizon, existing assets including life insurance, liquidity, liquid net worth, risk tolerance, and tax status. The recommendation must fit that profile. Skipping the information gathering is a suitability violation even if the consumer offers to waive it.
Why the other options are wrong
- A) The duty to obtain suitability information cannot be waived by the consumer; it is the producer's obligation under 40 P.S. § 627-1 et seq.
- B) Employer permission is irrelevant; the suitability duty runs from the producer to the consumer under the Pennsylvania Insurance Department's rules.
- D) A credit report is not the suitability tool; the law requires the enumerated suitability information, not a credit check.
Memory hook
No recommendation without the profile: age, income, objectives, horizon — the suitability checklist.