Florida Annuity Suitability Questionnaire

The Florida Annuity Suitability Questionnaire is a document used in the state of Florida, primarily by insurance agents and companies, to ensure that an annuity purchase is appropriate and suitable for a potential buyer’s financial situation and objectives. This questionnaire is part of the regulatory framework designed to protect consumers and ensure that the financial products being sold meet their needs.

Key elements of the Florida Annuity Suitability Questionnaire include:

1. Personal Information: This includes the annuity owner’s name, age, sex, relationship to the annuitant(s), and tax status.
2. Financial Information: It collects data on the owner’s annual income, source of income, annual household income, existing assets, and existing liquid net worth.
3. Current Financial Products: The questionnaire asks if the owner currently has any annuities or life insurance policies.
4. Financial Objectives & Needs: It inquires about the reasons for purchasing the annuity and the financial objectives behind this decision, such as income growth, safety of principal, or passing assets to beneficiaries.
5. Risk Tolerance: The owner’s appetite for risk is assessed, ranging from conservative to aggressive. This helps in determining the type of annuity product that would be most suitable.
6. Investment Experience: Understanding the owner’s experience with different types of investments helps in evaluating their ability to understand and manage the annuity.
7. Source of Funds for Annuity Purchase: This includes details about where the funds for purchasing the annuity will come from (e.g., savings, another annuity, etc.).
8. Anticipated Future Financial Changes: The questionnaire asks about expected changes in living expenses, medical expenses, and overall financial needs, including during the surrender charge period of the annuity.
9. Emergency Funds: It checks whether the owner has funds set aside for unexpected expenses.
10. Acknowledgments & Signatures: The owner must acknowledge the information provided and the decision to purchase the annuity, affirming that it is based on their own judgment or the recommendation of the agent or insurer.
11. Advantages & Disadvantages: The agent, insurer, or Managing General Agent proposing the purchase is required to clearly outline the advantages and disadvantages of purchasing the proposed annuity. This ensures that the buyer is fully aware of both the benefits and potential drawbacks of the annuity product.
12. Basis for Recommendation: The professional selling the annuity must provide a basis for recommending the purchase of the proposed annuity or the replacement of an existing one. This section is crucial for transparency and ensuring that the recommendation aligns with the buyer’s needs and objectives.
13. Acknowledgements & Signatures Section: This section is where the buyer acknowledges the receipt and understanding of the information provided. They also acknowledge the potential limitations of protection offered by Florida statutes regarding the suitability of the annuity purchase if they refuse to provide the requested information or provide inaccurate information.
14. Explanation of Terms: The questionnaire includes a glossary or explanation of terms section, which defines various terms used in the document. This part is essential for helping buyers understand the technical language and terms that are part of annuity contracts and financial planning.
15. Agent & Company Responsibilities: The questionnaire makes it clear that no question or response area is to be left blank when offered to the owner for signature. If any information requested is unavailable, not applicable, or unknown, the insurance agent or insurer must indicate that.
16. Legal & Compliance Aspects: The form complies with specific Florida rules and regulations, ensuring that both the buyer’s and the seller’s interests are protected under the law.

This questionnaire is vital in helping agents and insurance companies adhere to Florida’s regulations governing the sale of annuities, ensuring that they are suitable and meet the specific needs of the consumer. It also helps in protecting the consumer from being sold a product that may not be in line with their financial goals or risk tolerance.