Compliance Newsletter - December 2025

Stay up to date with key compliance requirements, regulatory changes and essential resources in Protective’s December compliance newsletter.

Protective is committed to making the most of every opportunity to put more within your reach – more tools and more resources to help you do the right thing, serve people, build trust, and aspire for better. Because together we are all Protectors.

Suitability

Protective’s Annuity Suitability Review Desk helps ensure producers comply with applicable annuity suitability laws and regulations, notably the NAIC Suitability in Annuity Transactions Model Regulation (Model Regulation). The regulatory framework mandates that producers must be knowledgeable about the products they offer and ultimately make recommendations that are in the best interest of the client. Producers are encouraged to review Protective’s Annuity Suitability Guidelines and Annuity Suitability Producer Guide to help ensure compliance with applicable annuity suitability laws and regulations. Producers can access these guides from the new site experience For Professionals by selecting the Doing Business drop down menu, then selecting Compliance Support.

The NAIC Suitability in Annuity Transactions Model Regulation (“Model Regulation”) provides the framework for annuity suitability guidelines. The Model Regulation was revised with enhanced standards in 2020 which mandate that a producer must act in the best interest of the consumer in recommending an annuity transaction to an applicant. Producers must have reasonable grounds for believing that a recommendation effectively addresses the consumer’s individual insurance needs and financial objectives, including but not limited to the following:

Make reasonable efforts to obtain the client’s suitability information.
Retain accurate client records that support any product recommendation.
Understand the client’s current and long-term financial situation and objectives.
Complete all required training and maintain a comprehensive knowledge of the recommended annuity product, staying current on any material product changes.
Stay current on all relevant legal and regulatory developments.
Recommend products based solely on the client’s best interest.
Educate the client on the advantages and disadvantages of any recommended product(s) and describe how the client’s needs and objectives are addressed.
Be aware of and adhere to regulatory requirements about annuity illustrations, solicitation practices and replacement transactions.

In addition, when there is an exchange or replacement for another product the producer must have reasonable basis to believe that the exchange or replacement is in the client’s best interest, taking into consideration whether the applicant will:

Incur a surrender charge.
Be subject to the commencement of a new surrender period.
Lose existing benefits (such as death benefit, living benefit, or other contractual benefit).
Be subject to increased fees or charges for riders or similar product enhancements.
Benefit from product enhancements and improvements.
Have had another annuity exchange or replacement within the preceding 60 months.

Conditional suitability review

Protective may undertake a conditional suitability review upon request by the producer or wholesaler. This review enables producers or wholesalers to inquire about the suitability of a particular product for a potential applicant prior to submitting a signed application. Conditional review requests may be made by submitting a “Consumer Profile and Suitability Questionnaire” via email to the Annuity Suitability Review Desk at annuitysuitabilityreview@protective.com. The questionnaire does not need to be signed by the client or producer for a conditional review. The Annuity Suitability Review Desk will conduct a review and provide conditional approval, decline, or ask for more information. The Annuity Suitability Review Desk is available to answer general questions concerning annuity suitability or the Consumer Profile and Suitability Questionnaire.

New York Regulation 60 - Replacements

When completing the New York Regulation 60 Disclosure Statement, note question #3 of the Agent/Broker statement that asks for advantages of continuing the existing life insurance or annuity contract without changes. This question must be answered in detail. It is not acceptable to answer this question with “N/A” or “None.” The advantage(s) of continuing the existing contract must be documented. If not, the form will be considered “not in good order” and will delay review by the Suitability Review Desk.

Grow your practice

Protective publishes educational materials on www.protective.com/for-professionals under both the Retirement and Protection drop down menus to assist producers in better educating consumers before purchasing life insurance or an annuity. Protective encourages you to use these materials to help inform consumers about how our products work. These marketing materials include information on available riders, endorsements, restrictions, withdrawals, annuitization, expenses, surrender charges, and other important features and risks. The Retirement and Protection sections to Grow your practice serves as a helpful reminder to producers that Protective has made available product specific marketing material to be used with consumers at the point of sale.

Important information about sales material and advertising

Insurance advertising is highly regulated with guidelines that differ from state to state. All sales and marketing materials available on www.protective.com/for-professionals have been reviewed by Protective Corporate Compliance. Accordingly, any advertising or sales material must be approved prior to use if the Protective name or branding, or any product, sales aid, or computer systems are referenced. Remember, urging a customer to purchase or modify a policy through prospecting letters, form letters, and internet websites is considered advertising and fall within these pre-approval guidelines.

Contact us

Our purpose is to help more people become Protectors. We stand by your side as you help your customers protect what matters most. Please contact us at 800-866-6410, Option 1, for additional support. Additionally, the Annuity Suitability Review Desk may be reached at Annuitysuitabilityreview@protective.com.

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