Florida Annuities Training Course

1. Florida Annuities Training Course An 8-Hour Continuing Education Course To begin the course, click on the forwardarrow in the bottom navigation bar or click the next topic in the left menu bar.

2. Florida Annuities Training Course Course Navigation Instructions • You can use the menu on the left to click from one screen to the next. The menu will expand as you reach each section. You can also use the navigation buttons at the top and bottom of the screen to move forward or backward within the course. • Use “EXIT” button in upper right when leaving the course. • Review questions are interspersed throughout the course to check your understanding as you go along. Explanations are provided to indicate the correct or incorrect responses. • To move from one lesson to another, continue to navigate through the course or use left menu bar to jump directly to the desired module. You must answer end of lesson quiz questionsin order to proceed to the next lesson. • Upon completion of all of the lessons in the course, access to the final exam will be available. Follow instructions provided at the end of the course for launching exam. • Optional CE credits are available but can only be awarded as long as course is approved by the state. If state approval expires, the status in your “My Courses” library will be shown as “Non-CE Course.”

3. Florida Annuities Training Course Support Information • System Requirements: Windows Media Player version 9 or higher; Flash 9 or higher; Windows 2000, Windows XP, Windows Vista; Internet Explorer (IE 6, IE 7, or IE8 with IE7 compatibility mode) • Access to your purchased course is available 24 hours a day, 7 days a week for a twelve month period from the date of purchase or initial access. • For technical support, please contact our customer service department at 1-800-543-0874. • For questions about content or to request information from an instructor, please contact Kevin Speed, Director of Learning & Continuing Education via email to kspeed@nuco.com. • Information gathered during the registration process is utilized to authenticate your identification, and to provide required information for processing and reporting CE credits. This information will not be sold, distributed or shared with any third party without your prior written consent.

4. Key Terms Glossary

5. Florida Annuities Training Course Lesson 1 Purpose of Annuities

6. Lesson 1: Purpose of Annuities Definition of Annuities • An annuity is defined as the liquidation of a principal sum to be distributed on a periodic payment basis to commence at a specific time and to continue throughout a specified period of time or for the duration of a designated life or lives. • Annuities are valued tools for retirement planning. In this lesson, we will review the uses of annuities and also consider alternative financial planning vehicles used to help fulfill consumer’s retirement goals.

7. Lesson 1: Purpose of Annuities Primary Uses of Annuities • Since the annuity’s unique feature is to provide a stream of payments that cannot be outlived, annuities are frequently used as a tool to provide for a monthly retirement income. However, annuities can be used in many other ways. • Annuities allow an individual to take advantage of tax-deferred accumulation of interest, since the interest earned inside an annuity is not subject to taxation until it is withdrawn. • An annuity is an investment that can be used as collateral for a loan. • Annuities provide a fairly high degree of liquidity, meaning owners can withdraw funds within certain limits during the accumulation phase. • An annuity can be a useful estate planning tool for people who want to pass on a large sum of money to an heir that is not subject to probate and cannot be contested by a will.

8. Lesson 1: Purpose of Annuities Primary Uses of Annuities • To create an appreciating asset that does not require any care and feeding (such as dividing money between accounts, etc.) • As an alternative to an IRA, particularly since there are no IRS limits to the amount which can be contributed annually as there are with IRAs. • Annuities are very useful for conservative investors whose primary goal is to preserve funds yet still earn a guaranteed level of interest over a long period of time.

9. Lesson 1: Purpose of Annuities Retirement Planning • Although the annuity can be used for many purposes, probably its best and most frequent use is retirement planning. • Retirement has been the focus of much attention in recent years. • Since people are living longer than at any prior time in history, there are more retirement years to be planned for and paid for. • Americans of the baby boomer generation, those born between 1945 and 1964, are quickly nearing retirement age and have begun planning for their retirement years in earnest. • Further, the downsizing of major American corporations is symptomatic of an economy in which employees cannot rely on their employers to finance their retirement.

10. Lesson 1: Purpose of Annuities Retirement Planning • As a result of these and other factors, there has been a steadily increasing interest in the financial aspects of retirement. • Most Americans expect to receive Social Security benefits at retirement, and many are participants in qualified retirement plans provided by their employers. • Experts warn, though, that if baby boomers are to afford the retirement lifestyle they seem to want, these two sources of retirement income will not suffice. • Personal savings must make up the difference.

11. Lesson 1: Purpose of Annuities Retirement: Accumulation Planning • One of the best vehicles for accumulating funds to supplement retirement income from Social Security and qualified retirement plans is a nonqualified annuity. • The use of the labels “qualified” and “nonqualified” refer to whether the annuity is used as part of a retirement plan that is “qualified” under certain sections of the Internal Revenue Code. • A qualified annuity is one that is used as part of, or in connection with, a qualified retirement plan. A nonqualified annuity is one that is not used as part of any qualified retirement plan. • If the annuity is labeled nonqualified, this simply means that it may be purchased by any individual or entity and is not associated with an employer-provided plan.

12. Lesson 1: Purpose of Annuities Retirement: Accumulation Planning • As with many financial planning strategies, earlier is better than later when deciding to save for retirement. • To illustrate, consider annuity holder Mrs. Smith, who begins saving for retirement at age 40. She will have accumulated $138,598 by age 65 by saving $200 per month, resulting in a monthly benefit of $812. • The same monthly amount started at age 50 would result in a retirement sum of $58,164. Waiting until age 60, with retirement only five years away, severely cuts down on the available funds, resulting in a sum of only $13,954. Under the annuity started at age 50, the monthly benefit would be $341, while under the annuity started at age 60 she would receive only $82 each month.

13. Lesson 1: Purpose of Annuities Retirement: Accumulation Planning • The usefulness of starting early can be illustrated another way. Assume that Mrs. Smith, with the help of her financial planner, determines that she needs $500 per month at retirement to supplement her retirement income from other sources. • If Mrs. Smith begins paying premiums into the annuity at age 40, she will need to pay a monthly premium of $123 in order to accumulate the $85,320 that will pay her a life income annuity of about $500 each month beginning at age 65. • If she delays starting the payments until age 50, she must pay $293 each month; while waiting until age 60 would require a monthly payment of $1,223. Clearly, starting early is the best course of action for this type of retirement planning.

14. Lesson 1: Purpose of Annuities Retirement: Distribution Planning • With the large number of baby boomers hitting retirement age, a great deal of attention has turned to looking at ways to help retirees receive their retirement benefits. One term used for this type of planning is “income distribution planning.” This activity of planning to receive funds is, in some ways, the opposite of planning to accumulate retirement funds, which has received far greater attention. • With the ability to provide a life-long income stream that an individual cannot outlive, annuities can be an ideal vehicle for income distribution planning. Most annuities offer payout options as part of the contract. Thus, an annuity holder can typically elect to receive the funds in an annuity over his lifetime, over the lifetimes of the annuity holder and his spouse, over a certain number of years, in a certain monthly amount, or according to one of several other alternatives typically available. Other names for these payout options are settlement options and payment contracts.

15. Lesson 1: Purpose of Annuities Retirement: Distribution Planning • To illustrate a basic method in which a nonqualified annuity can be used for distribution planning, consider a scenario featuring Mr. Jones, age 62, who has decided to retire from his accounting position. • Over the years Mr. Jones has contributed to the retirement plan offered by his employer and, in addition, has made a modest monthly contribution to a nonqualified annuity. • This annuity now has a value of $35,000. If Mr. Jones elects, under the annuity contract’s settlement options, to receive this amount over his lifetime, his monthly benefit will be approximately $235. He will receive this amount each month for the remainder of his life, regardless of how long this ends up being.

16. Lesson 1: Purpose of Annuities Retirement: Distribution Planning • Since a nonqualified annuity can offer a greater degree of flexibility with regard to distribution than can many employer-sponsored qualified plans, the nonqualified contract can be a useful distribution vehicle for individuals who wish to begin receiving retirement benefits earlier than the typical retirement age. • Many qualified retirement plans assume age 65 as the age at which retirement benefits can commence. Even if a plan participant can begin receiving benefits before age 65, the amount of the benefit may be less than it would be at age 65. • Also, delaying the start of Social Security benefits will result in a greater amount of monthly benefit and this may be an attractive alternative to some individuals.

17. Lesson 1: Purpose of Annuities Retirement: Distribution Planning • Suppose an individual wants to retire at age 55-1/2 or wishes to take another job, start a business, or engage in some other activity that will result in less income than was previously received. • If the individual has a nonqualified annuity, he might consider using these funds as income over the next ten years until age 65. • To illustrate, let’s assume that Mr. Black is now age 55 and wishes to leave his regular job and start his own painting business. • He has both a defined benefit and a 401(k) retirement plan through his employer, but can’t begin receiving full retirement benefits from these plans until he reaches age 65.

18. Lesson 1: Purpose of Annuities Retirement: Distribution Planning • If Mr. Black has been contributing to a nonqualified annuity, he can consider using these funds to supplement his income from his start-up business for the next ten years. He can do this by electing a ten year term certain settlement option payout from the annuity contract. • Another option would be to move funds currently in his annuity to an immediate annuity that would pay benefits over the next ten years. • Assuming Mr. Black’s current balance in the nonqualified annuity is $50,000, a ten year payout would result in about $465 per month. • At the end of ten years, the funds in the nonqualified annuity will have been used up but Mr. Black will then be able to start receiving retirement benefits from his previous employer’s qualified retirement plans.

19. Lesson 1: Purpose of Annuities Retirement: Distribution Planning • Another possible use of the nonqualified annuity in the distribution phase of retirement capitalizes on the fact that not all of the benefit payments received from a nonqualified annuity are currently taxable. • As will be explained in Lesson 7, with a nonqualified annuity only a portion of each benefit payment will be taxed. The other portion is considered a return of principal and is therefore not taxed. • In contrast, with most qualified retirement plans and traditional IRAs, the benefit payments are fully taxable. Thus, if a client has both a nonqualified annuity and qualified retirement plans, it may make sense to receive the nonqualified annuity benefits first and delay starting receipt of the qualified benefits until a later time.

20. Lesson 1: Purpose of Annuities Retirement: Distribution Planning • Yet another way in which annuities can be used in the income distribution process is as Individual Retirement Annuities used to receive rollovers or direct transfers from retirement plans. • Although a complete description of the IRA rules is beyond the scope of this course, it is helpful to realize that annuities can be used, as IRAs, to receive funds from qualified retirement plans. Typically, a qualified plan participant will have the option to make a direct transfer of his or her balance in the plan into either an IRA or another qualified plan. • Among other times, this option is often available when the person terminates employment or retires. Moving the funds to an IRA as part of an eligible rollover distribution will likely allow the individual to exercise a greater degree of control over how the funds are invested and how and when benefit payouts begin.

21. Lesson 1: Purpose of Annuities Other Retirement Planning Vehicles • To make the best use of the nonqualified annuity in retirement planning, one should understand alternate retirement planning techniques and grasp how these options interact with nonqualified annuities. • A brief discussion of the more commonly encountered types of retirement plans follows.

22. Lesson 1: Purpose of Annuities Other Retirement Planning Vehicles • Individual Retirement Arrangements - An individual retirement arrangement, or IRA, is a similar planning tool to an annuity in many ways. Both are vehicles for tax-deferred savings. • However, an IRA contribution often results in an income tax deduction in the year the contribution is made. This deduction depends on income levels and on participation in other employer-provided plans. • And most IRA investments cannot offer a stream of payments that the owner cannot out live (unless, of course, the annuity is owned within an IRA).

23. Lesson 1: Purpose of Annuities Other Retirement Planning Vehicles • IRA investments, other than annuities, may offer more or less liquidity than an annuity, and the investor must consider the impact of fees such as surrender charges and early withdrawal penalties. • For example, a mutual fund owned within an IRA may offer fairly rapid access to cash in case of an emergency, but require a sizable early withdrawal penalty. There are two ways to withdraw funds from many annuities: surrenders and loans. The availability and specific terms associated with these options vary between annuities, so careful scrutiny of available options is often called for. • In 1998, another form of IRA, the Roth IRA, became available. While contributions made to a Roth IRA are not tax deductible, funds distributed from a Roth IRA may be received completely free of any income tax, provided certain conditions are satisfied.

24. Lesson 1: Purpose of Annuities Other Retirement Planning Vehicles • From a financial planning perspective, it is important to note that high-income taxpayers cannot take advantage of IRAs, making the use of a nonqualified annuity to accumulate funds for retirement purposes an attractive option. • While it is true that premiums paid into a nonqualified annuity are not income tax deductible and benefit payments from such an annuity will be partially taxable, there is no limit on the amount of funds that may be placed in a nonqualified annuity. • And, of course, the interest earned on the funds inside the annuity is tax deferred.

25. Lesson 1: Purpose of Annuities Other Retirement Planning Vehicles • Qualified Retirement Plans ­- Generally, a qualified retirement plan is an employee benefit arrangement offered to employees by an employer. There are several different types of qualified plans, such as profit-sharing plans, 401(k) plans and employer stock ownership plans. A detailed explanation of these is beyond the scope of this course. • However, it is important to understand that while these plans are designed to provide an employee with some type of retirement benefit, most employees have little control over the type of plan offered by their employer or how the plan’s funds are invested. The nonqualified annuity offers a method of retirement planning over which the employee retains a much greater degree of control.

26. Lesson 1: Purpose of Annuities Other Retirement Planning Vehicles • Most large corporations provide their employees with some type of qualified retirement plan. A few provide more than one plan. • However, many small companies and self-employed individuals do not have sufficient income to make contributions to such a plan. • Contributions to a nonqualified annuity by these individuals may provide their only source of retirement income other than government benefits such as Social Security.

27. Lesson 1: Purpose of Annuities Other Retirement Planning Vehicles • Tax Sheltered Annuities - A tax sheltered annuity, or TSA, is a special type of annuity that is available only to individuals employed in public schools and nonprofit organizations that are operated exclusively for religious, literary, charitable, scientific, or educational purposes. Included here are churches, synagogues, hospitals, and colleges. • A TSA is usually issued by an insurance company. It may be either a fixed or a variable annuity contract.

28. Lesson 1: Purpose of Annuities Other Retirement Planning Vehicles • Small Business Retirement Planning - For a self-employed individual, the use of a nonqualified annuity may provide the only source of retirement income, other than government benefits such as Social Security. • Many agents and financial planners find that a business owner who has just purchased an individual disability income policy is interested in beginning his retirement planning also.

29. Lesson 1: Purpose of Annuities Split Annuity Arrangement • One use of nonqualified annuities that has generated interest is called a “split annuity” or “combined annuity” arrangement. • Basically, with this arrangement an individual starts with a sum of money and then places a portion of the funds in an immediate annuity and the remainder of the funds in a deferred annuity. • The immediate annuity begins to pay out an income right away and typically is set up to continue to the payout for a set number of years. • The funds in the deferred annuity are not accessed during this period and remain in the deferred annuity.

30. Lesson 1: Purpose of Annuities Split Annuity Arrangement • Some versions of this arrangement suggest that at the end of the immediate annuity payout period, which may be somewhere between five and ten years, that the value of the deferred annuity may have increased to the point where the annuity holder can take a portion of the deferred annuity and purchase another immediate annuity that will pay a similar income for another set period of years. • Of course, whether this arrangement will work out as planned depends upon whether the rate of return assumed on the deferred annuity portion of the arrangement is met.

31. Lesson 1: Purpose of Annuities Annuities for Charitable Planning • There are occasions when an individual who has purchased an annuity finds that he would like to make a gift of either the contract itself or the funds held in the contract. There is no reason that an individual cannot make a gift of a nonqualified annuity contract, if that is his wish. However, there may be some unanticipated tax results. • An annuity holder who decides to surrender an annuity fully and make a gift of the funds must pay income tax on the amount received from the insurance company less his or her basis in the contract. Barring previous partial surrenders, the basis will likely be equal to the amount of premiums paid into the annuity. If the annuity holder is not at least age 59-½ at the time of the surrender, a 10% penalty tax on premature distributions may also apply.

32. Lesson 1: Purpose of Annuities Annuities for Charitable Planning • After surrendering the annuity and paying the necessary taxes, the individual can make a gift of the cash received from the surrender. Generally, a gift of up to $10,000 per person as indexed ($11,000 in 2004) can be made before any gift tax will be due. In addition, an unlimited deduction from gift tax is generally available for gifts to charity. • The annuity holder could also simply make a gift of the annuity contract itself. This provides the person who receives the gift with the advantage of the income tax deferral on the interest earned inside the annuity. However, if the gift is of an annuity contract issued after April 22, 1987, the person making the gift is treated as having received an amount equal to the cash surrender value of the contract at the time of the gift minus the annuity holder’s investment.

33. Lesson 1: Purpose of Annuities Annuities for Charitable Planning • Charitable Gift Annuity – As opposed to making a gift of an existing annuity, an individual can enter into a charitable gift annuity arrangement. There is no previously-purchased annuity contract in this instance. • Generally, a charitable gift annuity is an agreement between a charitable institution, such as a church or college, and an individual who wishes to make a contribution to the charity. If an individual donates property to the charity under a charitable gift annuity, he receives an annuity from the charity for the remainder of his life. There is no transfer of an annuity contract, rather the annuity payments are made directly from the charity to the individual and are backed by the charity’s assets and good name. The tax consequences of a charitable gift annuity can be complicated. There is usually an immediate income tax deduction for the person making the gift, although the amount of the deduction may be limited.

34. Lesson 1: Purpose of Annuities College Funding • Even before planning for their own retirement, the expense of providing their children with a college education is a primary concern for parents. The cost of a college education has increased rapidly in the last few years. • Currently, the cost to attend four years at a private college can well exceed $120,000 while the cost of four years at a state university can be upwards of $40,000. • In recent years, as annuity sales have increased rapidly, there has been much debate over the use of nonqualified annuities as a college-planning vehicle. In some instances, the annuity can be a useful tool. However, it is not always the best answer to the college-funding dilemma.

35. Lesson 1: Purpose of Annuities College Funding • The major advantage in using an annuity for college planning is that the funds accumulate on a tax-deferred basis. • Since all the interest stays in the contract to accumulate even more interest, the tax-deferred annuity generally provides a greater rate of return than a financial vehicle that is taxed on a regular basis. • The primary drawback to using the annuity for college funding appears when it is time to take the funds out of the contract. • There are several ways that an annuity holder can withdraw funds from an annuity: These include a full surrender, a partial surrender, or annuitization of the contract.

36. Lesson 1: Purpose of Annuities College Funding • If the annuity holder decides on either a full or partial surrender, to withdraw the college funds, he will incur the 10% premature distribution penalty tax unless he is at least age 59-1/2. • By the time that the parent pays the regular income tax due on the surrender and then the penalty tax, the advantage gained by using the tax-deferred funding vehicle is often eliminated. • Of course, there is no requirement that the parent be the owner and annuitant of the annuity contract. One logical alternative that eliminates the age 59-1/2 problem is for a grandparent to be the owner and annuitant of the contract that will be used for funding a grandchild’s college education.

37. Lesson 1: Purpose of Annuities Sale of a Business • Often, as a business owner approaches retirement age, he realizes that the only source of retirement income available will be Social Security. With the realization that he will not be able to quit working, the business owner often looks at selling all or part of the business to create funds for retirement. • If the business is sold, the former owner may find himself with a large amount of cash. Since the funds are intended to be used for retirement, a nonqualified annuity is often a good way to utilize the cash from the sale. Frequently, a business that was largely dependent on the talents of the owner will be sold for a smaller purchase price with former owner agreeing to serve as a consultant for several years and receive either a salary or percentage of the company’s sales or profits. In this situation, the former owner may wish to place the funds from the sale in a deferred annuity.

38. Lesson 1: Purpose of Annuities Sale of a Business • Consider the example of Mr. Jones who owns a successful insurance agency. As he approaches age 65, he agrees to sell the agency. • Since many of his large accounts are personal friends who may leave the agency without Mr. Jones in the business, the new owners may desire to keep Mr. Jones on staff for five years in exchange for a percentage of the commissions earned by the agency each year. • Mr. Jones agrees to a sale price of $500,000 which he places in a deferred annuity. He also places a percentage of his salary as he continues working into the deferred annuity. • At the end of five years when Mr. Jones is 70 years old and ready to completely retire, he annuitizes the contract and chooses to receive payments for the remainder of his life.

39. Lesson 1: Purpose of Annuities Bonus Plan • Occasionally an annuity is used in place of a life insurance policy in a type of nonqualified employee benefit plan referred to as a Bonus Plan or a Section 162 Bonus Plan. Although this type of plan is not a true “plan” it does provide a benefit. Under a Section 162 Bonus Plan, a corporation selects certain employees – usually top level executives – to receive a salary increase or bonus. This salary increase is deductible from income by the corporation under IRC Section 162 (hence the name) and must be included in income by the employee. • Once the increase is in the hands of the executive he uses it to pay the premium on a life insurance policy insuring his life and owned by him personally. Although a life insurance policy is usually used in this type of plan, an annuity may be substituted in certain instances such as when the executive cannot purchase insurance (i.e., is uninsurable) due to health problems.

40. Florida Annuities Training Course Lesson 2 Overview of Recent Legislation and Rules

41. Lesson 2: Recent Legislation and Rules 2010 Legislative Enhancements from the Safeguard Our Seniors Act The first piece of legislation we’re going to look at is the 2010 Legislative Enhancements from the Safeguard Our Seniors Act.

42. Lesson 2: Recent Legislation and Rules §624.310(1)(a)5, F.S. • This amends the definition of an ‘affiliated party’ to bring subjected marketers under the regulatory authority of the department. • §624.310(1)(a), F.S. – “Affiliated party” means any person who directs or participates in the conduct of the affairs of a licensee and who is: • 5. A third-party marketer who aids or abets a licensee in a violation of the insurance code relating to the sale of an annuity to a person 65 years of age or older.

43. Lesson 2: Recent Legislation and Rules §626.025(13) & §626.798, F.S. • This extends the prohibition on a life insurance agent being the beneficiary of a life insurance policy sold to someone other than the agent’s family member by including the agent’s family members within the prohibition and by prohibiting the agent, or the agent’s family member, from serving as a guardian, trustee, or having power of attorney over the insured. • §626.025, F.S. - To transact insurance, agents shall comply with consumer protection laws, including the following, as applicable: • (13) The prohibition against the designation of a life insurance agent or his or her family member as the beneficiary of a life insurance policy sold to an individual other than a family member under s. §626.798, F.S.

44. Lesson 2: Recent Legislation and Rules §626.025(13) & §626.798, F.S. • §626.798, F.S. - No agent shall, with respect to the placement of life insurance coverage with a life insurer covering the life of a person who is not a family member of the agent, handle in his or her capacity as a life agent the placement of such coverage when the agent placing the coverage or a family member of such agent is the named beneficiary under the life insurance policy, unless the life agent or family member has an insurable interest in the life of such person. However, the agent or a family member of such agent may not be designated as a trustee or guardian or be granted power of attorney unless he of she is a family member of the policy owner or insured, or is a bank or trust company duly authorized to act as a fiduciary.

45. Lesson 2: Recent Legislation and Rules §626.2815(3)(k), F.S. • This exempts agents not actively soliciting or servicing insurance or annuity contracts from Senior Suitability CE requirement. • The CE requirement of life agents to complete 3 hours on the subject of Senior Suitability does not apply to an agent who does not have any active life insurance or annuity contracts. In applying this exemption, the department may require the filing of a certification attesting that the agent has not sold life insurance or annuities during the continuing education compliance cycle in question and does not have any active life insurance or annuity contracts.

46. Lesson 2: Recent Legislation and Rules §626.621(13), F.S. • This gives the department authority to take license disciplinary action against an agent who has been disciplined under his or her securities license or a related license. • §626.621, F.S. – The department may, in its discretion, deny an application for, suspend, revoke, or refuse to renew or continue the license or appointment of any applicant, agent, adjuster, customer representative, service representative, or managing general agent, and it may suspend or revoke the eligibility to hold a license or appointment of any such person, if it finds that as to the applicant, licensee, or appointee any one or more of the following applicable grounds exist under circumstances for which such denial, suspension, revocation, or refusal is not mandatory under s. 626.611, F.S.

47. Lesson 2: Recent Legislation and Rules §626.621(13), F.S. • (13) Has been the subject of or has had a license, permit, appointment, registration, or other authority to conduct business subject to any decision, finding, injunction, suspension, prohibition, revocation, denial, judgment, final agency action, or administrative order by any court of competent jurisdiction, administrative law proceeding, state agency, federal agency, national securities, commodities, or option exchange, or national securities, commodities, or option association involving a violation of any federal or state securities or commodities law or any rule or regulation adopted thereunder, or a violation of any rule or regulation of any national securities, commodities, or options exchange or national securities, commodities, or options association.

48. Lesson 2: Recent Legislation and Rules §626.641(3)(b), F.S. • This prohibits the department from issuing a license to a former licensee who has had his or her license revoked resulting from the solicitation or sale of an insurance product to a senior consumer. • If a licensee as an agent or customer representative or the eligibility to hold such a license has been revoked resulting from the solicitation or sale of an insurance product to a person 65 years of age or older, the department may not thereafter grant or issue any license under this code to such individual.

49. Lesson 2: Recent Legislation and Rules §626.9521(3)(a)-(b), F.S. • This increases the financial penalty for the willful act of “twisting” or “churning” of an annuity, and fraudulent signatures to a maximum of $75,000. • (3)(a) If a person violates s. 626.9541(1)(l) F.S. the offense known as “twisting,” or violates s. 626.9541(1)(aa) F.S. the offense known as “churning,” the person commits a misdemeanor of the first degree, punishable as provided in s. 775.082, F.S. and an administrative fine not greater than $5,000 shall be imposed for each nonwillful violation or an administrative fine not greater than $75,000 shall be imposed for each willful violation. To impose an administrative fine for a willful violation under this paragraph, the practice of “churning” or “twisting” must involve fraudulent conduct.

50. Lesson 2: Recent Legislation and Rules §626.9521(3)(a)-(b), F.S. • (b) If a person violates s. 626.9541(1)(ee), F.S. by willfully submitting fraudulent signatures on an application or policy-related document, the person commits a felony of the third degree, punishable as provided in s. 775.082, F.S. and an administrative fine not greater than $5,000 shall be imposed for each nonwillful violation or an administrative fine not greater than $75,000 shall be imposed for each willful violation. • (4) A licensee must make all reasonable efforts to ascertain the consumer’s age at the time an insurance application is completed.