Legal and Compliance Reminders
The following information will help you stay current on your responsibilities as an Athene producer. Remember, it is your obligation to know the requirements of your Athene contract as well as the laws and regulations of any state in which you conduct business.
All states: Athene’s position on providing investment advice – Athene wants to remind all producers that state insurance and securities regulators continue to be concerned that insurance producers are dispensing investment advice without the required securities registration/licensure.
Athene wants to remind all producers that state insurance and securities regulators continue to be concerned that insurance producers are dispensing investment advice without the required securities registration/licensure. There are several circumstances under which regulators may conclude under the laws of a state that a producer is providing investment advice, including:
- A producer recommends the liquidation of a security (for example, to provide a source of funds for the purchase of an annuity product).
- A producer advises a customer of the relative advantages and disadvantages of investing in securities as directly compared to a fixed or fixed indexed annuity product.
Athene provides guidance on investment advice in each of its product trainings. Individuals who are insurance licensed may only discuss:
- The stock market and indices in general.
- Market risks, recent or historic economic activities, or market indices that are generally known to the public and regularly discussed in media.
- Suitability information required by the Suitability in Annuity Transactions Model Regulation.
Athene’s position on providing investment advice is contained in the Doing Business with Athene Producer Guide. Producers who are not licensed to discuss securities or provide investment advice are prohibited from the following activities:
- A producer must not provide specific advice about, or recommend, the liquidation or “replacement” of a security.
- A producer must not recommend a specific allocation among investment classes.
- A producer must not discuss the characteristics, advantages, and disadvantages of a particular security.
- A producer must not discuss the details of alternative index strategies and how they work.
- A producer must not advise a customer as to whether securities are relatively more or less suitable than a fixed insurance product.
Should a producer run into a situation in which a client owns a security product, which may be used to fund an Athene annuity product, please consider taking the following actions:
- Obtain a clear acknowledgement from the customer that any decision they make to liquidate securities to provide some or all the funds for the purchase of an insurance product is the customer’s independent decision and choice, and not the result of any specific recommendation on your part.
- Be clear with customers that if they require investment advice, they should seek the advice of a properly licensed securities professional in conjunction with the liquidation of any securities.
- Consider using a disclosure form that clearly reinforces what service you do and do not provide.
- Clearly indicate the services you are, and are not, licensed to provide to the customer without using phrases that may lead the customer to believe otherwise.
All states: Athene’s position on non-resident/cross border sales – A “non-resident sale” (often referred to as a “cross-border sale”) occurs whenever a customer purchases an annuity contract outside his or her state of residence. This includes solicitation and completion of the annuity application and delivery of the annuity contract.
Athene wants to remind all producers of rules and regulations that pertain to the non-resident sale of annuities. A “non-resident sale” (often referred to as a “cross-border sale”) occurs whenever a customer purchases an annuity contract outside his or her state of residence. This includes solicitation and completion of the annuity application and delivery of the annuity contract.
State insurance departments closely examine transactions in which residents are being sold insurance products outside their jurisdiction. The repercussions for producers and insurance companies can be severe, and may include the issuance of fines or penalties, remediation, or suspension of producer licenses if the state insurance department determines that a violation of law occurred.
We do not encourage non-resident sales. If, however, the solicitation of an insurance product takes place in a state that is not the residence state of the applicant/owner, you must comply with the following guidelines and requirements:
- You must be licensed and appointed in the state where the solicitation takes place.
- The solicitation and signing of the application must occur solely within the state identified in the application, and the contract must be delivered to the owner in the same state.
- The Non-Resident Information Sheet (Form 16257) must be completed and accompany every application involving a non-resident sale.
- You must describe the connection between the applicant/owner and the non-resident state in which the solicitation took place.
- You must provide evidence that the application/owner was in the non-resident state for reasons other than to transact insurance at the time of solicitation.
State insurance departments will not tolerate any producer who deliberately bends the rules while selling products to citizens outside their state of residence, nor will Athene. If a sale is made appropriately in a state other than the applicant’s residence state, the producer must maintain the correct non-resident license(s) and only sell products approved in the non-resident state(s) while conducting business there. Additionally, producers must be familiar and comply with all rules and regulations in each state for which a non-resident license is held.
State specific guidelines:
Arkansas, Massachusetts, Minnesota, Mississippi, New York, Utah, Washington and Wisconsin
It is our interpretation that insurance regulations in Arkansas*, Massachusetts, Minnesota, Mississippi*, New York**, Utah, Washington and Wisconsin prohibit cross-border sales of insurance products to residents of their state. Even in cases where the Non-Resident Information Sheet (Form 16257) is completed and an explanation for the non-resident sale is provided, Athene reserves the right to decline applications based on the information provided or other information known to the Company.
* Arkansas and Mississippi: Arkansas residents may purchase an annuity in Mississippi or Tennessee. Mississippi residents may purchase an annuity in Arkansas or Tennessee. Producers must have a non-resident license in the applicant’s state of residence.
** New York: Please be aware that Athene Annuity and Life Company is not authorized to do business in New York and, consequentially, will not accept any applications from any New York resident customers, regardless of where the application is signed or solicited.
All applications from New York residents must be submitted to Athene Annuity & Life Assurance Company of New York. Additionally, Athene Annuity & Life Assurance Company of New York will only accept an application from a non-New York resident customer when the annuity contract is being sold by a New York resident appointed agent.
Please make sure you read each update in its entirety. Failure to comply with applicable regulations may lead to disciplinary action and may be grounds for termination of your appointment and/or contract with Athene.