HF 1134

1st Unofficial Engrossment - 87th Legislature (2011 - 2012)

Posted on 04/25/2012 03:02 p.m.

1.1A bill for an act 1.2relating to insurance; regulating annuity products; enacting and modifying 1.3a model regulation adopted by the National Association of Insurance 1.4Commissioners relating to suitability in annuity transactions;amending 1.5Minnesota Statutes 2010, sections 60K.46, subdivision 4; 60K.56, subdivision 5; 1.672A.20, subdivision 34; proposing coding for new law in Minnesota Statutes, 1.7chapter 72A. 1.8BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.9    Section 1. Minnesota Statutes 2010, section 60K.46, subdivision 4, is amended to read: 1.10    Subd. 4. Suitability of insurance. In recommending the purchase of any life, 1.11endowment, individual accident and sickness, long-term care, annuity, life-endowment, or 1.12Medicare supplement insurance to a customer, a producer must have reasonable grounds 1.13for believing that the recommendation is suitable for the customer and must make 1.14reasonable inquiries to determine suitability. The suitability of a recommended purchase 1.15of insurance will be determined by reference to the totality of the particular customer's 1.16circumstances, including, but not limited to, the customer's income, the customer's need 1.17for insurance, and the values, benefits, and costs of the customer's existing insurance 1.18program, if any, when compared to the values, benefits, and costs of the recommended 1.19policy or policies. This subdivision does not apply to limited lines insurance under section 1.2060K.38, subdivision 1 , paragraph (c). new text begin Recommendations for the purchase of an annuity new text end 1.21 new text begin are subject to sections 72A.203 to 72A.2036 and not this subdivision. new text end 1.22    Sec. 2. Minnesota Statutes 2010, section 60K.56, subdivision 5, is amended to read: 1.23    Subd. 5. Criteria for course accreditation. (a) The commissioner may accredit a 1.24course only to the extent it is designed to impart substantive and procedural knowledge of 2.1the insurance field. The burden of demonstrating that the course satisfies this requirement 2.2is on the individual or organization seeking accreditation. The commissioner is authorized 2.3to establish a procedure for renewal of course accreditation. 2.4(b) The commissioner shall approve or disapprove professional designation 2.5examinations that are recommended for approval by the advisory task force. In order 2.6for an insurance producer to receive full continuing education credit for a professional 2.7designation examination, the producer must pass the examination. A producer may 2.8not receive credit for classroom instruction preparing for the professional designation 2.9examination and also receive continuing education credit for passing the professional 2.10designation examination. 2.11 new text begin (c) The commissioner shall approve continuing education courses offered by new text end 2.12 new text begin accredited institutions of higher education that are approved education providers under new text end 2.13 new text begin chapter 45 that impart substantive and procedural knowledge of the insurance field. new text end 2.14 new text begin Continuing education courses offered by accredited institutions of higher education new text end 2.15 new text begin that are approved education providers under chapter 45 shall not be considered new text end 2.16 new text begin company-sponsored courses unless attendance is restricted to producers of one or more new text end 2.17 new text begin companies or their affiliates. new text end 2.18    Sec. 3. Minnesota Statutes 2010, section 72A.20, subdivision 34, is amended to read: 2.19    Subd. 34. Suitability of insurance for customer. In recommending or issuing life, 2.20endowment, individual accident and sickness, long-term care, annuity, life-endowment, or 2.21Medicare supplement insurance to a customer, an insurer, either directly or through its 2.22agent, must have reasonable grounds for believing that the recommendation is suitable for 2.23the customer. 2.24In the case of group insurance marketed on a direct response basis without the use of 2.25direct agent contact, this subdivision is satisfied if the insurer has reasonable grounds to 2.26believe that the insurance offered is generally suitable for the group to whom the offer is 2.27made. new text begin Sections 72A.203 to 72A.2036, and not this subdivision, apply to recommending new text end 2.28 new text begin and issuing an annuity. new text end 2.29    Sec. 4. new text begin [72A.203] EXEMPTIONS. new text end 2.30 new text begin Unless otherwise specifically included, sections 72A.203 to 72A.2036 do not apply new text end 2.31 new text begin to transactions involving: new text end 2.32 new text begin (1) direct response solicitations where there is no recommendation based on new text end 2.33 new text begin information collected from the consumer pursuant to sections 72A.203 to 72A.2036; new text end 2.34 new text begin (2) contracts used to fund group plans under: new text end 3.1 new text begin (i) an employee pension or welfare benefit plan that is covered by the Employee new text end 3.2 new text begin Retirement and Income Security Act of 1974 (ERISA) title 29, United States Code, new text end 3.3 new text begin sections 1001 to 1461; new text end 3.4 new text begin (ii) a plan described by section 401(a), 401(k), 403(b), 408(k), or 408(p) of the new text end 3.5 new text begin Internal Revenue Code of 1986 (IRC); as amended, if established or maintained by an new text end 3.6 new text begin employer; new text end 3.7 new text begin (iii) a government or church plan defined in section 414 of the Internal Revenue new text end 3.8 new text begin Code of 1986 as amended, a government or church welfare benefit plan, or a deferred new text end 3.9 new text begin compensation plan of a state or local government or tax exempt organization under section new text end 3.10 new text begin 457 of the Internal Revenue Code of 1986, as amended; or new text end 3.11 new text begin (iv) a nonqualified deferred compensation arrangement established or maintained by new text end 3.12 new text begin an employer or plan sponsor; and new text end 3.13 new text begin (3) contracts used to fund, unless there is a recommendation to a consumer regarding new text end 3.14 new text begin an annuity in which case sections 72A.203 to 72A.2036 do apply with respect to the new text end 3.15 new text begin consumer annuity transaction: new text end 3.16 new text begin (i) settlements of or assumptions of liabilities associated with personal injury new text end 3.17 new text begin litigation or a dispute or claim resolution process; or new text end 3.18 new text begin (ii) formal prepaid funeral contracts. new text end 3.19    Sec. 5. new text begin [72A.2031] DEFINITIONS. new text end 3.20     new text begin Subdivision 1. new text end new text begin Definitions. new text end new text begin For purposes of sections 72A.203 to 72A.2036, the new text end 3.21 new text begin terms defined in this section have the meanings given them. new text end 3.22     new text begin Subd. 2. new text end new text begin Annuity. new text end new text begin "Annuity" means an annuity that is an insurance product under new text end 3.23 new text begin state law that is individually solicited, whether the product is classified as an individual or new text end 3.24 new text begin group annuity. new text end 3.25     new text begin Subd. 3. new text end new text begin Continuing education credit or CE credit. new text end new text begin "Continuing education credit" new text end 3.26 new text begin or "CE credit" means one continuing education credit earned pursuant to section 45.30, new text end 3.27 new text begin subdivision 4. new text end 3.28     new text begin Subd. 4. new text end new text begin Continuing education provider or CE provider. new text end new text begin "Continuing education new text end 3.29 new text begin provider" or "CE provider" means an approved education provider under chapter 45. new text end 3.30     new text begin Subd. 5. new text end new text begin FINRA. new text end new text begin "FINRA" means the Financial Industry Regulatory Authority new text end 3.31 new text begin or a succeeding agency. new text end 3.32     new text begin Subd. 6. new text end new text begin Insurer. new text end new text begin "Insurer" means a company required to be licensed under the laws new text end 3.33 new text begin of this state to provide insurance products, including annuities. new text end 4.1     new text begin Subd. 7. new text end new text begin Insurance producer. new text end new text begin "Insurance producer" means a person required to new text end 4.2 new text begin be licensed under the laws of this state to sell, solicit, or negotiate insurance, including new text end 4.3 new text begin annuities. new text end 4.4     new text begin Subd. 8. new text end new text begin Replacement. new text end new text begin "Replacement" means a transaction in which a new policy or new text end 4.5 new text begin contract is to be purchased, and it is known or should be known to the proposing producer, new text end 4.6 new text begin or the proposing insurer, whether or not there is an insurance producer, that by reason of new text end 4.7 new text begin the transaction, an existing policy or contract has been or is to be any of the following: new text end 4.8 new text begin (1) lapsed, forfeited, surrendered or partially surrendered, assigned to the replacing new text end 4.9 new text begin insurer, or otherwise terminated; new text end 4.10 new text begin (2) converted to reduced paid-up insurance; continued as extended term insurance, new text end 4.11 new text begin or otherwise reduced in value by the use of nonforfeiture benefits or other policy values; new text end 4.12 new text begin (3) amended so as to effect either a reduction in benefits or in the term for which new text end 4.13 new text begin coverage would otherwise remain in force or for which benefits would be paid; new text end 4.14 new text begin (4) reissued with any reduction in cash value; or new text end 4.15 new text begin (5) used in a financed purchase. new text end 4.16     new text begin Subd. 9. new text end new text begin Suitability information. new text end new text begin "Suitability information" means information that new text end 4.17 new text begin is reasonably appropriate to determine the suitability of a recommendation, including new text end 4.18 new text begin but not limited to the following: new text end 4.19 new text begin (1) age; new text end 4.20 new text begin (2) annual income and anticipated material changes in annual income; new text end 4.21 new text begin (3) financial situation and needs, including the financial resources used for the new text end 4.22 new text begin funding of the annuity, and including anticipated material changes in financial situation new text end 4.23 new text begin and needs; new text end 4.24 new text begin (4) financial experience; new text end 4.25 new text begin (5) financial objectives; new text end 4.26 new text begin (6) intended use of the annuity; new text end 4.27 new text begin (7) financial time horizon; new text end 4.28 new text begin (8) existing assets, including investment and life insurance holdings and anticipated new text end 4.29 new text begin material changes in existing assets; new text end 4.30 new text begin (9) liquidity needs and anticipated material changes in liquidity needs; new text end 4.31 new text begin (10) liquid net worth and anticipated material changes in liquid net worth; new text end 4.32 new text begin (11) risk tolerance; new text end 4.33 new text begin (12) tax status; and new text end 4.34 new text begin (13) whether or not the consumer has a reverse mortgage. new text end 4.35    Sec. 6. new text begin [72A.2032] DUTIES OF INSURERS AND INSURANCE PRODUCERS. new text end 5.1     new text begin Subdivision 1. new text end new text begin Suitability standard. new text end new text begin In recommending to a consumer the purchase new text end 5.2 new text begin of an annuity or the exchange of an annuity that results in another insurance transaction or new text end 5.3 new text begin series of insurance transactions, the insurance producer, or the insurer where no producer new text end 5.4 new text begin is involved, shall have reasonable grounds for believing, after a reasonable inquiry, that new text end 5.5 new text begin the recommendation is suitable for the consumer, under the totality of the circumstances new text end 5.6 new text begin based on the facts disclosed by the consumer as to the consumer's investments and other new text end 5.7 new text begin insurance products and as to the consumer's financial situation and needs, including the new text end 5.8 new text begin consumer's suitability information, and that there is a reasonable basis to believe all of new text end 5.9 new text begin the following: new text end 5.10 new text begin (1) the consumer has been reasonably informed of various features of the annuity, new text end 5.11 new text begin such as the potential surrender period and surrender charge, potential tax penalty if the new text end 5.12 new text begin consumer sells, exchanges, surrenders, redeems, or annuitizes the annuity, mortality and new text end 5.13 new text begin expense fees, investment advisory fees, potential charges for and features of riders, new text end 5.14 new text begin limitations on interest returns, insurance and investment components, and market risk; new text end 5.15 new text begin (2) the consumer would receive a tangible net benefit from the transaction; new text end 5.16 new text begin (3) the particular annuity as a whole, the underlying subaccounts to which funds are new text end 5.17 new text begin allocated at the time of purchase or exchange of the annuity, and riders and similar product new text end 5.18 new text begin enhancements, if any, are suitable; and in the case of an exchange or replacement, the new text end 5.19 new text begin transaction as a whole is suitable taking into account, among other things, the age of the new text end 5.20 new text begin consumer; for the particular consumer based on the consumer's suitability information; and new text end 5.21 new text begin (4) in the case of an exchange or replacement of an annuity, the exchange or new text end 5.22 new text begin replacement is suitable including taking into consideration all of the following: new text end 5.23 new text begin (i) the consumer will incur a surrender charge; be subject to the commencement of a new text end 5.24 new text begin new surrender period; lose existing benefits, such as death, living, or other contractual new text end 5.25 new text begin benefits; or be subject to increased fees, investment advisory fees, or charges for riders new text end 5.26 new text begin and similar product enhancements; new text end 5.27 new text begin (ii) the consumer would receive a tangible net benefit from the transaction, and new text end 5.28 new text begin in the case of a person 65 years of age or older, neither a producer nor an insurer shall new text end 5.29 new text begin recommend a replacement or exchange of an annuity that requires the insured to pay new text end 5.30 new text begin a surrender charge for the annuity being replaced or exchanged if the replacement or new text end 5.31 new text begin exchange does not confer a substantial financial benefit over the life of the annuity to the new text end 5.32 new text begin consumer so that a reasonable person would believe the purchase is unnecessary; and new text end 5.33 new text begin (iii) the consumer has had another annuity exchange or replacement and, in new text end 5.34 new text begin particular, an exchange or replacement within the preceding 60 months. new text end 5.35     new text begin Subd. 2. new text end new text begin Obtaining suitability information. new text end new text begin Before the execution of a purchase, new text end 5.36 new text begin exchange, or replacement of an annuity resulting from a recommendation, an insurance new text end 6.1 new text begin producer, or an insurer where no producer is involved, shall make reasonable efforts to new text end 6.2 new text begin obtain the consumer's suitability information, and record this information on a form, new text end 6.3 new text begin inventory, or similar record. new text end 6.4     new text begin Subd. 3. new text end new text begin Restriction on issuance of annuity. new text end new text begin Except as permitted under subdivision new text end 6.5 new text begin 4, an insurer shall not issue an annuity recommended to a consumer unless there is a new text end 6.6 new text begin reasonable basis to believe the annuity is suitable based on the consumer's suitability new text end 6.7 new text begin information. new text end 6.8     new text begin Subd. 4. new text end new text begin Exception. new text end new text begin (a) Except as provided under paragraph (b), an insurance new text end 6.9 new text begin producer, or an insurer, does not have any obligation to a consumer under subdivision 1 new text end 6.10 new text begin or 3 related to an annuity transaction if: new text end 6.11 new text begin (1) no recommendation is made; new text end 6.12 new text begin (2) a recommendation was made and was later found to have been prepared based on new text end 6.13 new text begin materially inaccurate information provided by the consumer; or new text end 6.14 new text begin (3) a consumer refuses to provide relevant suitability information and the annuity new text end 6.15 new text begin transaction is not recommended. new text end 6.16 new text begin (b) An insurer's issuance of an annuity subject to paragraph (a) shall be reasonable new text end 6.17 new text begin under all the circumstances actually known, or which after reasonable inquiry should be new text end 6.18 new text begin known to the insurer or the insurance producer, at the time the annuity is issued. new text end 6.19     new text begin Subd. 5. new text end new text begin Documentation. new text end new text begin An insurance producer or, where no insurance producer new text end 6.20 new text begin is involved, the responsible insurer representative, shall at the time of sale: new text end 6.21 new text begin (1) make a record of any recommendation subject to subdivision 1; new text end 6.22 new text begin (2) obtain a customer signed statement documenting a customer's refusal to provide new text end 6.23 new text begin suitability information, if any; and new text end 6.24 new text begin (3) obtain a customer signed statement acknowledging that an annuity transaction new text end 6.25 new text begin is not recommended if a customer decides to enter into an annuity transaction that is not new text end 6.26 new text begin based on the insurance producer's or insurer's recommendation. new text end 6.27     new text begin Subd. 6. new text end new text begin Supervision system. new text end new text begin (a) An insurer shall establish a supervision system new text end 6.28 new text begin that is reasonably designed to achieve the insurer's and its insurance producers' compliance new text end 6.29 new text begin with sections 72A.203 to 72A.2036, including, but not limited to, all of the following: new text end 6.30 new text begin (1) the insurer shall maintain reasonable procedures to inform its insurance new text end 6.31 new text begin producers of the requirements of sections 72A.203 to 72A.2036 and shall incorporate the new text end 6.32 new text begin requirements of sections 72A.203 to 72A.2036 into relevant insurance producer training new text end 6.33 new text begin programs and manuals; new text end 6.34 new text begin (2) the insurer shall establish standards for insurance producer product training new text end 6.35 new text begin and shall maintain reasonable procedures to require its insurance producers to comply new text end 6.36 new text begin with the requirements of section 72A.2033; new text end 7.1 new text begin (3) the insurer shall provide product-specific training and training materials which new text end 7.2 new text begin explain all material features of its annuity products to its insurance producers; new text end 7.3 new text begin (4) the insurer shall maintain procedures for review of each recommendation new text end 7.4 new text begin before issuance of an annuity that are designed to ensure that there is a reasonable basis new text end 7.5 new text begin to determine that a recommendation is suitable. The review procedures shall apply a new text end 7.6 new text begin screening system for the purpose of identifying selected transactions for additional review new text end 7.7 new text begin and may be accomplished electronically or through other means including, but not limited new text end 7.8 new text begin to, physical review. The electronic or other system shall be designed to require additional new text end 7.9 new text begin or elevated review of those transactions identified for additional elevated review on the new text end 7.10 new text begin basis of the advanced age of the consumer, liquidity, and income; new text end 7.11 new text begin (5) the insurer shall maintain reasonable procedures to detect recommendations new text end 7.12 new text begin that are not suitable. This may include, but is not limited to, confirmation of consumer new text end 7.13 new text begin suitability information, systematic customer surveys, interviews, confirmation letters, new text end 7.14 new text begin and programs of internal monitoring. Nothing in this clause prevents an insurer from new text end 7.15 new text begin complying with this clause by applying sampling procedures, or by confirming suitability new text end 7.16 new text begin information after issuance or delivery of the annuity; and new text end 7.17 new text begin (6) the insurer shall annually provide a report to senior management, including to the new text end 7.18 new text begin senior manager responsible for audit functions, which details a review, with appropriate new text end 7.19 new text begin testing, reasonably designed to determine the effectiveness of the supervision system, the new text end 7.20 new text begin exceptions found, and corrective action taken or recommended, if any. new text end 7.21 new text begin (b)(1) Nothing in this subdivision restricts an insurer from contracting for new text end 7.22 new text begin performance of a function, including maintenance of procedures, required under paragraph new text end 7.23 new text begin (a). An insurer is responsible for taking appropriate corrective action and may be subject new text end 7.24 new text begin to sanctions and penalties pursuant to section 72A.2034 regardless of whether the insurer new text end 7.25 new text begin contracts for performance of a function and regardless of the insurer's compliance with new text end 7.26 new text begin subdivision 2, and an insurer is responsible for the compliance of an insurance producer new text end 7.27 new text begin with the provisions of sections 72A.203 to 72A.2036 regardless of whether the insurer new text end 7.28 new text begin contracts for performance of a function required under this paragraph; and new text end 7.29 new text begin (2) an insurer's supervision system under paragraph (a) must include supervision new text end 7.30 new text begin of contractual performance under this clause. This includes, but is not limited to, the new text end 7.31 new text begin following: new text end 7.32 new text begin (i) monitoring and, as appropriate, conducting audits to assure that the contracted new text end 7.33 new text begin function is properly performed; and new text end 7.34 new text begin (ii) annually obtaining a certification from a senior manager who has responsibility new text end 7.35 new text begin for the contracted function that the manager has a reasonable basis to represent, and does new text end 7.36 new text begin represent, that the function is properly performed. new text end 8.1 new text begin (c) An insurer is not required to include in its system of supervision an insurance new text end 8.2 new text begin producer's recommendations to consumers of products other than the annuities offered new text end 8.3 new text begin by the insurer. new text end 8.4     new text begin Subd. 7. new text end new text begin Undue influence. new text end new text begin An insurance producer or insurer shall not dissuade, new text end 8.5 new text begin or attempt to dissuade, a consumer from: new text end 8.6 new text begin (1) providing suitability information to the insurance producer or insurer and new text end 8.7 new text begin truthfully responding to an insurer's request for confirmation of suitability information; new text end 8.8 new text begin (2) filing a complaint; or new text end 8.9 new text begin (3) cooperating with the investigation of a complaint. new text end 8.10     new text begin Subd. 8. new text end new text begin FINRA compliance. new text end new text begin (a) Certain sales made by a broker-dealer in new text end 8.11 new text begin compliance with FINRA requirements pertaining to suitability and supervision of new text end 8.12 new text begin annuity transactions satisfy the requirements under sections 72A.203 to 72A.2036. This new text end 8.13 new text begin subdivision applies to FINRA broker-dealer sales of variable annuities and fixed annuities new text end 8.14 new text begin if the suitability and supervision is no less stringent than to those applied to variable new text end 8.15 new text begin annuity sales under FINRA requirements. However, nothing in this subdivision limits new text end 8.16 new text begin the commissioner of commerce's ability to enforce the provisions of sections 72A.203 new text end 8.17 new text begin to 72A.2036 with respect to sales made in compliance with FINRA requirements and new text end 8.18 new text begin federal law. In addition, nothing in this subdivision limits the responsibilities of the new text end 8.19 new text begin insurer to monitor the broker-dealer as provided in this subdivision. The insurer remains new text end 8.20 new text begin responsible for the suitability of every transaction and must take reasonably appropriate new text end 8.21 new text begin corrective action for any consumer harmed by violation of law and is subject to the penalty new text end 8.22 new text begin provisions described in section 72A.2034, subdivision 1. new text end 8.23 new text begin (b) For paragraph (a) to apply, an insurer shall: new text end 8.24 new text begin (1) monitor the FINRA member broker-dealer using information collected in the new text end 8.25 new text begin normal course of an insurer's business; and new text end 8.26 new text begin (2) provide to the FINRA member broker-dealer information and reports that new text end 8.27 new text begin are reasonably appropriate to assist the FINRA member broker-dealer to maintain its new text end 8.28 new text begin supervision system. new text end 8.29    Sec. 7. new text begin [72A.2033] INSURANCE PRODUCER TRAINING. new text end 8.30     new text begin Subdivision 1. new text end new text begin Requirement. new text end new text begin An insurance producer shall not solicit the sale of an new text end 8.31 new text begin annuity product unless the insurance producer has adequate knowledge of the product to new text end 8.32 new text begin recommend the annuity and the insurance producer is in compliance with the insurer's new text end 8.33 new text begin standards for product training. An insurance producer may rely on insurer-provided new text end 8.34 new text begin product-specific training standards and materials to comply with this subdivision. new text end 9.1     new text begin Subd. 2. new text end new text begin Initial training. new text end new text begin (a) An insurance producer who is otherwise entitled to new text end 9.2 new text begin engage in the sale of annuity products shall complete a onetime four-credit training course new text end 9.3 new text begin approved by the commissioner and provided by a continuing education provider approved new text end 9.4 new text begin by the commissioner prior to commencing the transaction of annuities. new text end 9.5 new text begin Insurance producers who hold a life insurance line of authority on the effective new text end 9.6 new text begin date of sections 72A.203 to 72A.2036 and who desire to sell annuities shall complete new text end 9.7 new text begin the requirements of this subdivision no later than six months after January 1, 2013. new text end 9.8 new text begin Individuals who obtain a life insurance line of authority on or after January 1, 2013, may new text end 9.9 new text begin not engage in the sale of annuities until the annuity training course required under this new text end 9.10 new text begin subdivision has been completed. Producers licensed on or after January 1, 2013, have new text end 9.11 new text begin until June 30, 2013, to complete the course. new text end 9.12 new text begin (b) The length of the training required under this subdivision must be four continuing new text end 9.13 new text begin education hours. new text end 9.14 new text begin (c) The training required under this subdivision must include information on the new text end 9.15 new text begin following topics: new text end 9.16 new text begin (1) the types of annuities and various classifications of annuities; new text end 9.17 new text begin (2) identification of the parties to an annuity; new text end 9.18 new text begin (3) how fixed, variable, and indexed annuity contract provisions affect consumers; new text end 9.19 new text begin (4) the application of income taxation of qualified and nonqualified annuities; new text end 9.20 new text begin (5) the primary uses of annuities; new text end 9.21 new text begin (6) appropriate and lawful sales practices, replacement, and disclosure requirements, new text end 9.22 new text begin and suitability information and whether an annuity is suitable for a consumer; and new text end 9.23 new text begin (7) the recognition of indicators that a prospective insured may lack the short-term new text end 9.24 new text begin memory or judgment to knowingly purchase an insurance product. new text end 9.25 new text begin (d) Providers of courses intended to comply with this subdivision shall cover all new text end 9.26 new text begin topics listed in the prescribed outline and shall not present any marketing information or new text end 9.27 new text begin provide training on sales techniques or provide specific information about a particular new text end 9.28 new text begin insurer's products. new text end 9.29 new text begin (e) A provider of an annuity training course intended to comply with this subdivision new text end 9.30 new text begin must be an approved continuing education provider in this state and comply with the new text end 9.31 new text begin requirements applicable to insurance producer continuing education courses. new text end 9.32 new text begin (f) Annuity training courses may be conducted and completed by classroom or new text end 9.33 new text begin self-study methods in accordance with chapter 45. In order to assist compliance with this new text end 9.34 new text begin section, all courses approved by the commissioner for the purposes of this section shall be new text end 9.35 new text begin given the course title "Annuity Suitability and Disclosure." Only courses satisfying the new text end 9.36 new text begin requirements of this section shall use this course title after the effective date of this section. new text end 10.1 new text begin (g) Providers of annuity training shall comply with the course completion reporting new text end 10.2 new text begin requirements of chapter 45. new text end 10.3 new text begin (h) The satisfaction of the training requirements of another state that are substantially new text end 10.4 new text begin similar to the provisions of this subdivision satisfies the training requirements of this new text end 10.5 new text begin subdivision in this state, but does not satisfy any of the continuing education requirements new text end 10.6 new text begin of chapter 60K unless the training requirements of the other state are satisfied through one new text end 10.7 new text begin or more continuing education courses approved by the commissioner. new text end 10.8 new text begin (i) An insurer shall verify that an insurance producer has completed the annuity new text end 10.9 new text begin training course required under this subdivision before allowing the producer to sell an new text end 10.10 new text begin annuity product for that insurer. An insurer may satisfy its responsibility under this new text end 10.11 new text begin subdivision by obtaining certificates of completion of the training course or obtaining new text end 10.12 new text begin reports provided by commissioner-sponsored database systems or vendors or from new text end 10.13 new text begin a reasonably reliable commercial database vendor that has a reporting arrangement new text end 10.14 new text begin with approved insurance education providers. If such data collection and reporting new text end 10.15 new text begin arrangements are not in place, an insurer must maintain records verifying that the producer new text end 10.16 new text begin has completed the annuity training course required under this subdivision and make the new text end 10.17 new text begin records available to the commissioner upon request. new text end 10.18    Sec. 8. new text begin [72A.2034] PENALTIES. new text end 10.19     new text begin Subdivision 1. new text end new text begin Imposition. new text end new text begin (a) An insurer is responsible for compliance with new text end 10.20 new text begin sections 72A.203 to 72A.2036. If a violation occurs, either because of the action or new text end 10.21 new text begin inaction of the insurer or its insurance producer, the commissioner may, in addition to any new text end 10.22 new text begin available penalties, remedies, or administrative actions order: new text end 10.23 new text begin (1) an insurer to take reasonably appropriate corrective, including but not limited new text end 10.24 new text begin to canceling a transaction action for any consumer harmed by the insurer's, or by its new text end 10.25 new text begin insurance producer's, violation of sections 72A.203 to 72A.2036; new text end 10.26 new text begin (2) a general agency, independent agency, or the insurance producer to take new text end 10.27 new text begin reasonably appropriate corrective action for any consumer harmed by the insurance new text end 10.28 new text begin producer's violation of sections 72A.203 to 72A.2036; and new text end 10.29 new text begin (3) appropriate penalties and sanctions. new text end 10.30 new text begin (b) Nothing in sections 72A.203 to 72A.2036 shall affect any obligation of an new text end 10.31 new text begin insurer for the acts of its insurance producers, or any consumer remedy or any cause new text end 10.32 new text begin of action that is otherwise provided for under applicable federal or state law, including new text end 10.33 new text begin without limitation chapter 60K. new text end 11.1     new text begin Subd. 2. new text end new text begin Aggravation or mitigation. new text end new text begin Any applicable penalty for a violation of new text end 11.2 new text begin sections 72A.203 to 72A.2036 may be increased or decreased upon consideration of any new text end 11.3 new text begin aggravating or mitigating circumstances. new text end 11.4    Sec. 9. new text begin [72A.2035] RECORD KEEPING. new text end 11.5     new text begin Subdivision 1. new text end new text begin Duration. new text end new text begin Insurers and insurance producers shall maintain or be able new text end 11.6 new text begin to make available to the commissioner records of the information collected from the new text end 11.7 new text begin consumer and other information used in making the recommendations that were the basis new text end 11.8 new text begin for insurance transactions for ten years after the insurance transaction is completed by the new text end 11.9 new text begin insurer. An insurer is permitted, but shall not be required, to maintain documentation on new text end 11.10 new text begin behalf of an insurance producer. new text end 11.11     new text begin Subd. 2. new text end new text begin Medium. new text end new text begin Records required to be maintained by sections 72A.203 to new text end 11.12 new text begin 72A.2036 may be maintained in paper, photographic, microprocess, magnetic, mechanical, new text end 11.13 new text begin or electronic media or by any process that accurately reproduces the actual document. new text end 11.14    Sec. 10. new text begin [72A.2036] RELATIONSHIP TO OTHER LAWS; ENFORCEMENT. new text end 11.15 new text begin (a) Nothing in sections 72A.203 to 72A.2036 shall be interpreted to: new text end 11.16 new text begin (1) change, alter, or modify any of the obligations, duties, or responsibilities of new text end 11.17 new text begin insurers or insurance producers, pursuant to any orders of the commissioner or consent new text end 11.18 new text begin decrees in effect as of January 1, 2013; or new text end 11.19 new text begin (2) limit the commissioner's authority to make any investigation or take any action new text end 11.20 new text begin under chapter 45 or other applicable state law with respect to any insurer, insurance new text end 11.21 new text begin producer, broker-dealer, third-party contractor, or other entity engaged in any activity new text end 11.22 new text begin involving the sale of an annuity that is subject to sections 72A.203 to 72A.2036. new text end 11.23 new text begin (b) In addition to any other penalties provided by the laws of this state, a violation of new text end 11.24 new text begin sections 72A.203 to 72A.2036 shall be considered a violation of section 72A.20. new text end 11.25    Sec. 11. new text begin EFFECTIVE DATE. new text end 11.26 new text begin This act is effective January 1, 2013. new text end