Quiz question: Which rule on VA sales is delayed indifinitely?

By Arthur D. Postal

May 26, 2008 at 08:00 PM

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The question was: Which of the following parts of FINRA Rule 2821 (which governs sales of deferred variable annuities) has the Financial Industry Regulatory Authority has delayed implementing indefinitely?

a) Suitability: Rule 2821(b)
b) Principal Review: Rule 2821(c)
c) Supervisory and Compliance Procedures: Rule 2821(d)
d) Training: Rule 2821(e)
e) Rule 2921(c) and Rule 2821(d)
f) Rule 2921(b) and Rule 2821 (c)

The answer is: e), according to an april 28, 2008 article in National Underwriter by Washington Bureau Chief Arthur D. Postal.

Rule 2821(c) would require that a FINRA member firm principal review the suitability of each deferred VA application within 7 business days after the customer has signed the application and before the application has been submitted to the insurance company, writes Postal. Rule 2821(d) would require member firms to maintain written supervisory procedures for complying with Rule 2821.

Firms also must implement compliance procedures to determine if their sales agents are engaging in excessive switching and must adopt policies and procedures designed to implement "corrective measures" with respect to "inappropriate exchanges" and the conduct of representatives who engage in those transactions.

See Postal's article here

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