(a) For purposes of this article: (1) âAnnuityâ means an annuity that is an insurance product under California law that is individually solicited, whether the product is classified as an individual or group annuity. (2) âCash compensationâ means any discount, concession, fee, service fee, commission, sales charges, loan, override, or cash benefit received by a producer in connection with the recommendation or sale of an annuity from an insurer, intermediary, or directly from a consumer. (3) âConsumer profile informationâ means information that is reasonably appropriate to determine whether a recommendation addresses the consumerâs financial situation, insurance needs, and financial objectives, including, at a minimum, the following: (A) Age. (B) Annual income. (C) Financial situation and needs, including debts and other obligations, and the financial resources used for the funding of the annuity. (D) Financial experience. (E) Insurance needs. (F) Financial objectives. (G) Intended use of the annuity, including any riders attached thereto. (H) Financial time horizon, including the duration of existing liabilities and obligations. (I) Existing assets or financial products, including investments, annuity, and insurance holdings. (J) Liquidity needs. (K) Liquid net worth. (L) Risk tolerance, including, but not limited to, the willingness to accept nonguaranteed elements in the annuity. (M) Tax status. (N) Whether or not the consumer has a reverse mortgage. (O) Whether or not the consumer intends to apply for means-tested government benefits, including Medi-Cal or the veteransâ aid and attendance benefit. (P) Any other relevant information that the producer or the insurer knew or reasonably should have known about, as provided by the consumer. (4) âContinuing education creditâ or âCE creditâ means one continuing education credit hour as defined in Section 2188.2(i) of Title 10 of the California Code of Regulations. (5) âContinuing education providerâ or âCE providerâ means an individual or entity that is certified to offer continuing education courses pursuant to Section 2186.1(b) and Section 2188 of Title 10 of the California Code of Regulations. (6) âFINRAâ means the Financial Industry Regulatory Authority or a successor agency. (7) âInsurerâ means a company required to be licensed or to hold a certificate of authority, or both, under California law to provide insurance products, including annuities. (8) âIntermediaryâ means an entity contracted directly with an insurer or with another entity contracted with an insurer to facilitate the sale of the insurerâs annuities by producers. (9) âMaterial conflict of interestâ means a financial interest of the producer in the sale of an annuity that a reasonable person would expect to influence the impartiality of a recommendation. âMaterial conflict of interestâ does not include cash compensation or noncash compensation. (10) âNoncash compensationâ means any form of compensation that is not cash compensation, including, but not limited to, health insurance, office rent, office support, and retirement benefits. (11) âNonguaranteed elementsâ means the premiums, benefits, values, credits, charges, and other elements not guaranteed over the life of the annuity, such as credited interest rates, including any temporary bonus interest rate, dividends, noninterest-based credits, index parameters, periodic expense charges, or elements of formulas used to determine any of these nonguaranteed elements, that are subject to insurer discretion and are not guaranteed at issue. An element is considered nonguaranteed if any of the underlying nonguaranteed elements are used in its calculation. (12) âProducerâ means a person required to be licensed under California law to sell, solicit, or negotiate insurance, including annuities. âProducerâ includes an insurer when no producer is involved. (13) (A) âRecommendationâ means advice or gu
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