RICP #2 - Competency 10 questions with verified
solutions graded A+
1. The National Association of Insurance Com- False. In 2020, the NAIC updated
their
missioners (NAIC) updated their model reg- model regulations to shift from a
ulations in 2020 to incorporate a suitability standard to a best interest
suitability standard for annuity
recommendations. requirement.
2. An advisor should not inquire into a
client's age or intended use of the
False. This is an important part of informa-
annuity because this information is
sensitive. tion gathering, though there is an
exemp- tion from the requirements
if the client refuses to provide this
3. One concern for an older client
purchasing a deferred annuity is information.
diminished capacity.
True. The main concern is diminished ca-
pacity.
4. Regulators are concerned with deferred an- The correct answer is True.
nuities that have a surrender charge
period that exceeds a client's life
expectancy.
5. While annuity contracts can be difficult for False. Producers are required to
make
clients to understand, it is not the insurance sure clients understand the
products they
producer's job to ensure that clients are purchasing.
under- stand all the key features of a
deferred an- nuity.
6. A purchase or exchange of an annuity
can only be recommended to a True. The focus of an annuity should
consumer by a be on the consumer's benefit and
not the pro-
producer if the annuity would be in the best ducer's.
1/
7
, RICP #2 - Competency 10 questions with verified
solutions graded A+
interest of the consumer, regardless of its
impact on the producer.
7. The non-natural person rule that applies The correct answer is True.
to annuities does not apply if the estate
of the deceased contract owner becomes
the ben- eficiary of the contract.
1/
7
solutions graded A+
1. The National Association of Insurance Com- False. In 2020, the NAIC updated
their
missioners (NAIC) updated their model reg- model regulations to shift from a
ulations in 2020 to incorporate a suitability standard to a best interest
suitability standard for annuity
recommendations. requirement.
2. An advisor should not inquire into a
client's age or intended use of the
False. This is an important part of informa-
annuity because this information is
sensitive. tion gathering, though there is an
exemp- tion from the requirements
if the client refuses to provide this
3. One concern for an older client
purchasing a deferred annuity is information.
diminished capacity.
True. The main concern is diminished ca-
pacity.
4. Regulators are concerned with deferred an- The correct answer is True.
nuities that have a surrender charge
period that exceeds a client's life
expectancy.
5. While annuity contracts can be difficult for False. Producers are required to
make
clients to understand, it is not the insurance sure clients understand the
products they
producer's job to ensure that clients are purchasing.
under- stand all the key features of a
deferred an- nuity.
6. A purchase or exchange of an annuity
can only be recommended to a True. The focus of an annuity should
consumer by a be on the consumer's benefit and
not the pro-
producer if the annuity would be in the best ducer's.
1/
7
, RICP #2 - Competency 10 questions with verified
solutions graded A+
interest of the consumer, regardless of its
impact on the producer.
7. The non-natural person rule that applies The correct answer is True.
to annuities does not apply if the estate
of the deceased contract owner becomes
the ben- eficiary of the contract.
1/
7
