Annuity Training Law
1. Where can I find out more information about the law?
SB 620 (Scott, Chapter 547, Statutes of 2003), Annuities: life insurance: required disclosures and prohibited sales practices, was signed in to law on September 29, 2003. This law enacted new life agent training requirements as stated in section 1749.8 of the California Insurance Code.
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Annuity Training Courses
1. Have courses been approved to satisfy the eight-hour annuity training requirement?
Yes, both classroom and correspondence courses have been approved by the California Department of Insurance (CDI) to meet this requirement. A listing of the courses approved by the CDI can be accessed on this Web site using the following link: education provider/course search. Be sure to select "Life-Only Agent" as the License Type, "Continuing Education" as the Education Type, and "2004 Annuity" as the Category Type.
2. Are there any courses approved to satisfy the four-hour annuity training requirement?
Yes, both classroom and correspondence courses have been approved by the CDI to meet this requirement. The courses can now be accessed using the CDI's education provider/course search program. Furthermore, the eight-hour course noted above will satisfy the four-hour annuity training requirement as well as provide the agent with an additional four hours of continuing education credit.
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1. What is the new California annuities training requirement?
California law requires Life-Only agents to complete eight hours of California specific annuities training prior to soliciting individual customers in order to sell annuities. In addition, if a Life-Only Agent sells an annuity product in a subsequent license term the agent must complete an eight or four-hour California Specific annuity training course during that license term.
2. What kind of training is required?
The law requires training in annuities; California law, regulations, and requirements related to annuities; prohibited sales practices; and fraudulent and unfair trade practices.
3. When must the eight-hour annuity training requirement be completed?
The eight-hour annuity training course must be completed prior to soliciting the sale of any annuity products.
4. What does the CDI do to verify that all life agents that sell annuities have completed the required training?
To verify that agents selling annuities have met the training requirements, the CDI provides an Annuity Training Report that enables insurers and agencies to verify their agents' course completion. The CDI has also placed the Annuity Training that was completed by the agents on the agent's Check Your License Status Page, under the "Continuing Education Link."
In addition, the CDI will be checking insurer's records during market conduct reviews. Legal action may be pursued if agents are found that have not met the annuity training requirement.
5. Does the training have to be provided in a classroom?
No, the training may be either classroom or home study (e.g. print textbook or online)
6. Do I need to send in any proof of completing the training?
No. The approved provider will submit the information directly to the CDI. However, you will receive a Certificate of Completion from the provider which you must keep in your records for five years.
7. Doesn't this new requirement apply only to those who sell annuities in the senior market?
No, it applies to every life agent who sells annuities.
8. If the training is not completed will my agent's variable authority be terminated?
No, your license will still be active; however, you must complete the training before you can sell any type of annuities.
9. Does the requirement apply to the sale of fixed and indexed annuities as well as variable annuities?
Yes, the requirement applies to all types of annuities.
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1. When does the requirement go into effect?
Effective January 1, 2005 any agent who sells annuities in California must have completed the initial eight hours of training. Any newly licensed agent must complete the initial eight hours of training prior to soliciting individual consumers for annuity sales.
2. How will I know if I am authorized to sell once my training has been completed?
As long as you have completed the California specific eight-hour CDI approved annuity training course, you are authorized to sell annuity products during the current license term. Thereafter, you must complete either an eight or four-hour California specific annuity training course prior to the renewal of your license if you sold any annuity products during that license term.
3. Will my license reflect that I am authorized to sell annuities once I complete my training?
No. Your license will not reflect this authorization. However, your continuing education record will verify you completed the required training.
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1. What is the continuing education requirement?
After the initial eight hour training, the life agent must complete either the eight or four hour California specific training requirement in any subsequent license term if an annuity product was sold during that license term. As noted above, SB 620 took effect on January 1, 2005. In order for agents to complete the training before the law took effect, many agents completed the eight hour course requirement in 2004. This has caused some confusion as to when the subsequent annuity training is to be completed. In response to these questions, the CDI has placed the agent's annuity training course completion on each life agents' Check Your License Status, Continuing Education Web link. Each agent's Continuing Education course completion record states when the next annuity training course should be completed.
2. If I complete my four hours of annuity training after the expiration of my license will I have to pay a penalty fee and will there be a break in my license?
You must complete the continuing education requirements to renew your license. Failing to complete the required annuity training prior to expiration of your license will not affect your license renewal. However you will be in violation of the California Insurance Code if you sold any annuity products during a license term and did not complete the four-hour annuity training during that license term.
3. No, the training hours are part of, and not in addition to, the continuing education requirements in Sections 1749.3 and 1749.33 of the CIC.
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1. Does this requirement apply to non-residents?
Yes, unless they are representing an insurer that is a direct response provider.
2. What is a direct response provider?
For purposes of this requirement, a "direct response provider" means an insurer that meets each of the following criteria:
a) the insurer does not initiate telephone contact with the insureds or prospective insured;
b) agents of the insurers speak with insureds and prospective insureds only by the telephone, and at the request of the insureds or prospective insureds;
c) agents of the insurer are assigned to speak with insureds or prospective insureds on a random basis, when contacted;
d) agents of the insurer are salaried and do not receive commissions for sales or referrals.
3. I am a licensed non-resident of California and hold a non-resident life agent license, will the eight-hour annuity training count toward my department of insurance's continuing education requirement?
Since the eight-hour annuity course contains California specific information, the course may not be approved in your state. Please check with the education provider who supplied the course to you to determine whether that specific course is also approved in your state for continuing education credits.
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1. Are there exemptions from this training requirement?
The only exception is if the individual represents an insurer that is a direct response provider. The definition of a direct response provider is stated in the Non-Resident Licensee section on this Web page.
2. If I am 70 years old and have 30 years of continuous licensing in the State of California, must I still complete this training?
Yes, although you may be exempt from continuing education requirements, if you are soliciting the sale of annuities you must complete the required annuity training.
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Annuity Training List
1. Can an insurer or agency obtain a list of their life agents who have and have not completed the eight-hour and the four-hour annuity training requirement?
Yes, the Insurer or Agency can download a list of their life agents who have and have not completed the annuity training requirement by following the instruction on this link: Annuity Training Report.
2. How can an Insurer or Agency obtain a list of their life agents in an Adobe Printable Document Format (PDF)?
You will need to follow the instructions noted on the following link: Printable Document Format (.pdf). This report is formatted and pops up using Adobe Acrobat. A free copy of the Adobe Acrobat Reader can be downloaded from the Adobe Web site.
3. How can an Insurer or Agency obtain a list of their life agents in an Excel format?
You will need to follow the procedures to create a Comma Separated Values (.csv) document. This link provides you with the procedures to run the report. To open the report in an Excel format, please follow the steps noted below.
- Open Microsoft Excel.
- From the Menu Bar select the Data menu option.
- From the Data drop down menu select Import External Data.
- From the Import External Data menu select Import Data.
- In the Select Data Source dialog box that displays documents, select the .csv file created and saved earlier. Click the Open button.
- In the Original Data Type area of Step 1 of the Text Import Wizard, select Delimited. Click the Next button.
- On Step 2 of the Wizard, select Comma in the Delimiters area. Click the Next button.
- In the Data Previewer area of Step 3, navigate using the horizontal scroll bar to the column titled Agent_Lic_NBR, select this column. In the Column Data Format area above select the Text radio button.
- Click the Finish button.
- You may now reformat the Excel document to accommodate your needs.
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