State RegulationsTN specificDifficulty 1/5
What overarching standard does Tennessee's annuity rule impose on a life producer who recommends an annuity contract to a consumer?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Tenn. Comp. R. & Regs. 0780-01-86 is Tennessee's annuity suitability and best-interest rule: a producer recommending an annuity must exercise a standard of care to act in the consumer's best interest and may not place the producer's or the insurer's financial interest ahead of the consumer's. The Tennessee Department of Commerce & Insurance enforces this standard against producers who steer consumers for their own benefit.
Why the other options are wrong
- B) The appointing insurer's market position is not the benchmark; the consumer's best interest is the controlling standard.
- C) Commission size can never be the selection criterion, and late disclosure does not convert a self-interested recommendation into a compliant one.
- D) Recommendations are precisely what the rule regulates, so they cannot be insulated from review as mere actuarial opinions.
Memory hook
Consumer first: the producer's wallet and the carrier's market share come second.