5. a. An annuity, for purposes of this section concerning the suitability of an annuity for a particular consumer, shall not include any annuity directly solicited to a consumer, that is:
(1)an annuity that serves as a funding vehicle for an employee welfare, pension, profit-sharing, or deferred compensation plan established or maintained by an employer or other plan sponsor, and which is funded in whole or in part by that employer or other plan sponsor;
(2)a structured settlement subject to the provisions of the "Structured Settlement Protection Act," P.L.2001, c.139 (C.2A:16-63 et seq.); or (3) a funeral insurance policy defined by section 24 of P.L.1993, c.147 (C.17B:17-5.1). b.
(1)An insurance producer, or an agent, representative or member of a fraternal benefit society not require
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5. a. An annuity, for purposes of this section concerning the suitability of an annuity for a particular consumer, shall not include any annuity directly solicited to a consumer, that is: (1) an annuity that serves as a funding vehicle for an employee welfare, pension, profit-sharing, or deferred compensation plan established or maintained by an employer or other plan sponsor, and which is funded in whole or in part by that employer or other plan sponsor; (2) a structured settlement subject to the provisions of the "Structured Settlement Protection Act," P.L.2001, c.139 (C.2A:16-63 et seq.); or (3) a funeral insurance policy defined by section 24 of P.L.1993, c.147 (C.17B:17-5.1). b. (1) An insurance producer, or an agent, representative or member of a fraternal benefit society not required to be licensed as an insurance producer in accordance with section 32 of P.L.1997, c.322 (C.17:44B-32), or an insurer, if no producer or non-licensed society agent, representative or member is involved, shall not negotiate or sell an annuity to a consumer unless the producer, non-licensed society agent, representative or member, or insurer has reasonable grounds for believing that the annuity is suitable for the consumer, on the basis of the facts disclosed by the consumer as to the consumer's investments, other insurance products, financial situation and objectives. (2) The insurance producer, non-licensed society agent, representative or member, or insurer shall, prior to selling an annuity negotiated with a consumer, make reasonable efforts to obtain, and record on a form prescribed by the commissioner, information concerning: (a) the consumer's financial status; (b) the consumer's tax status; (c) the consumer's investment objectives; (d) any other information considered to be relevant by the producer, non-licensed society agent, representative or member, or insurer to provide the reasonable grounds for believing the annuity is suitable for the consumer; and (e) the consumer's acknowledgement: (i) that the annuity and the solicitation, negotiation, and sale of the annuity concerning its suitability are subject to regulatory oversight by the department; and (ii) of receipt of appropriate contact information for the department's consumer assistance services. (3) The reasonable grounds for an insurance producer, non-licensed society agent, representative or member, or insurer for believing the annuity is suitable for the consumer shall be based upon all relevant information and circumstances of the consumer actually obtained or known, and recorded, during the time of any negotiation or offer of sale on the annuity. (4) (a) The insurance producer, non-licensed society agent, representative or member, or insurer shall not have any obligation to a consumer concerning the suitability of an annuity under this subsection: (i) for merely soliciting a consumer to apply for a particular type of annuity through a direct-response solicitation, occurring prior to any negotiation or attempt to sell the annuity; (ii) if the consumer, upon negotiating or attempting to sell the annuity, refuses to provide the relevant information requested pursuant to paragraph (2) of this subsection, or fails to provide complete or accurate information; or (iii) if the consumer chooses to obtain an annuity other than the annuity negotiated and offered for sale. (b) With respect to any variable annuity, the insurance producer, non-licensed society agent, representative or member, or insurer shall be deemed to have complied with the provisions of this subsection if the producer, non-licensed society agent, representative or member, or insurer complies with any rules of conduct pertaining to consumer suitability promulgated by the Financial Industry Regulatory Authority, or its successor, and approved by the United States Securities and Exchange Commission in accordance with section 19(b)(1) of the "Securities Exchange Act of 1934," Pub.L.73-291 (15 U.S.C. s.78s(b)(1)). c. (1) An insurer shall establish and maintain a system of supervision, or contract with a third party to establish and maintain a system, concerning the negotiation and sale of annuities directly negotiated and sold by the insurer, to assure compliance with the consumer suitability requirements set forth in subsection b. of this section. Any third party insurance producer or non-licensed society agent, representative or member authorized to act on behalf of the insurer shall adopt the insurer's system of supervision for its own employees and contracted persons who negotiate and sell annuities, or establish and maintain a system to assure compliance with the consumer suitability requirements set forth in subsection b. of this section. (2) A system of supervision shall include, but not be limited to: (a) A written set of procedures concerning the negotiation and sale of annuities; and (b) Periodic reviews of information as set forth by the commissioner in regulation, to assist in detecting and preventing violations of subsection b. of this section. (3) Whenever an insurer authorizes a third party insurance producer or non-licensed society agent, representative or member to act on its behalf, the insurer shall make reasonable inquiry to assure that this third party establishes and maintains the system of supervision required by paragraph (1) of this subsection. The reasonable inquiry by the insurer shall include: (a) Obtaining a certification, at least annually, from the third party insurance producer or non-licensed society agent, representative or member, signed by the third party, or an officer, director, or supervisory or managerial employee of that third party with responsibility for the system of supervision, which may be made available as a representation, in printable form to the insurer, on the third party's Internet website, stating the system complies with the provisions of paragraph (1) of this subsection, or stating that it is not presently in compliance and including specific criteria to be implemented to achieve compliance; and (b) Periodic reviews of information as set forth by the commissioner in regulation, to assist in detecting and preventing violations of subsection b. of this section. L.2008, c.88, s.5.