RAA Professional Standards & Competencies 3

Question 1

Under NAIC model regulations, how many hours of annuity-specific training must a new advisor complete before selling annuities?

Accepted Answer

4 hours

Answer

The NAIC Suitability in Annuity Transactions Model Regulation requires 4 hours of annuity-specific training for new sellers.

Question 2

A client with a two-year investment horizon asks about purchasing a ten-year surrender-charge annuity. How should a competent advisor respond?

Accepted Answer

Explain that the surrender charges make this product unsuitable for the client's timeline

Answer

A significant mismatch between surrender charge period and investment horizon is a suitability concern the advisor must communicate clearly.

Question 3

Which document is most critical to demonstrate that an advisor conducted a proper suitability analysis before recommending an annuity?

Accepted Answer

A completed and signed suitability questionnaire

Answer

A signed suitability questionnaire documents that the advisor gathered required client information and assessed appropriateness of the recommendation.

Question 4

What action should an RAA advisor take if a client wants to replace an existing annuity with a new one?

Accepted Answer

Complete a replacement disclosure and evaluate whether the exchange serves the client's best interest

Answer

Replacement transactions require specific disclosure forms and a careful analysis of whether the replacement benefits the client.

Question 5

An advisor's license lapses due to failure to complete continuing education. Which statement is correct?

Accepted Answer

The advisor may not sell annuities until the license is reinstated

Answer

Selling insurance products on a lapsed license is illegal; the advisor must restore the license before conducting any new business.

(RAA) Registered Annuity Advisor Practice Test

(RAA) Registered Annuity Advisor Practice Test

RAA Professional Standards & Competencies 3