Terms Used In Montana Code > Title 33 > Chapter 20 > Part 8 - Suitability in Annuity Transactions

• Annuity: A periodic (usually annual) payment of a fixed sum of money for either the life of the recipient or for a fixed number of years. A series of payments under a contract from an insurance company, a trust company, or an individual. Annuity payments are made at regular intervals over a period of more than one full year.
• Annuity: means a fixed annuity that is individually solicited, regardless of whether the product is classified as an individual or group annuity. See Montana Code 33-20-804
• Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
• Cash compensation: means any discount, concession, fee, service fee, commission, sales charge, loan, override, or cash benefit received by a producer in connection with the recommendation or sale of an annuity from an insurer, intermediary, or directly from the consumer. See Montana Code 33-20-804
• Complaint: A written statement by the plaintiff stating the wrongs allegedly committed by the defendant.
• Consumer profile information: means information that is reasonably appropriate to determine whether a recommendation addresses the consumer's financial situation, insurance needs, and financial objectives, including, at a minimum, the following:

  (a)age;

  (b)annual income;

  (c)financial situation and needs, including debts and other obligations;

  (d)financial experience;

  (e)insurance needs;

  (f)financial objectives;

  (g)intended use of the annuity;

  (h)financial time horizon;

  (i)existing assets or financial products, including investment, annuity, and insurance holdings;

  (j)liquidity needs;

  (k)liquid net worth;

  (l)risk tolerance, including but not limited to willingness to accept nonguaranteed elements in the annuity;

  (m)financial resources used to fund the annuity; and

  (n)tax status. See Montana Code 33-20-804

• Contract: A legal written agreement that becomes binding when signed.
• Fiduciary: A trustee, executor, or administrator.
• insurance producer: means a person or entity required to be licensed under the laws of this state to sell, solicit, or negotiate insurance, including annuities. See Montana Code 33-20-804
• Insurer: means a company required to be licensed under the laws of this state to provide insurance products, including annuities. See Montana Code 33-20-804
• Intermediary: means an entity contracted directly with an insurer or with another entity contracted with an insurer to facilitate the sale of the insurer's annuities by producers. See Montana Code 33-20-804
• Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
• Litigation: A case, controversy, or lawsuit. Participants (plaintiffs and defendants) in lawsuits are called litigants.
• Noncash compensation: means any form of compensation that is not cash compensation, including but not limited to health insurance, office rent, office support, and retirement benefits. See Montana Code 33-20-804
• Nonguaranteed elements: means the premiums, credited interest rates including any bonuses, benefits, values, dividends, noninterest-based credits, charges, or elements of formulas used to determine any of these that are subject to company discretion and are not guaranteed at issue. See Montana Code 33-20-804
• Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
• Person: includes a corporation or other entity as well as a natural person. See Montana Code 1-1-201
• Process: means a writ or summons issued in the course of judicial proceedings. See Montana Code 1-1-202
• Recommendation: means advice provided by a producer to an individual consumer that was intended to result or does result in a purchase, an exchange, or a replacement of an annuity in accordance with that advice. See Montana Code 33-20-804
• Replacement: means a transaction in which a new annuity is to be purchased, and it is known or should be known to the proposing producer or to the proposing insurer, whether or not a producer is involved, that by reason of the transaction, an existing annuity or other insurance policy or contract has been or is to be any of the following:

  (a)lapsed, forfeited, surrendered or partially surrendered, assigned to the replacing insurer, or otherwise terminated;

  (b)converted to reduced paid-up insurance, continued as extended term insurance, or otherwise reduced in value by the use of nonforfeiture benefits or other policy values;

  (c)amended so as to effect either a reduction in benefits or in the term for which coverage would otherwise remain in force or for which benefits would be paid;

  (d)reissued with any reduction in cash value; or

  (e)used in a financed purchase. See Montana Code 33-20-804

• State: when applied to the different parts of the United States, includes the District of Columbia and the territories. See Montana Code 1-1-201
• Writing: includes printing. See Montana Code 1-1-203