State RegulationsTN specificDifficulty 2/5
A producer licensed in Tennessee for accident and health only asks whether she may begin selling fixed annuity contracts to her health-insurance clients. What must she do first?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Tennessee licenses producers by line of authority, and annuities belong to the life line, so an accident-and-health-only producer must obtain the life line of authority before soliciting annuity contracts. Once life-licensed, she would also be subject to the annuity best-interest requirements of Tenn. Comp. R. & Regs. 0780-01-86 enforced by the Tennessee Department of Commerce & Insurance.
Why the other options are wrong
- A) A producer license does not blanket-cover all products; authority is line-specific, and annuities require the life line.
- C) Annuities are not a limited-lines product; limited lines authority covers narrow classes such as travel or credit insurance, not annuity sales.
- D) A preexisting client relationship does not expand licensing authority; selling annuities without the life line is unlicensed activity regardless of who the client is.
Memory hook
Health license, health products: annuities wait until the life line is in hand.