Neb. Rev. Stat. §§ 44-8105

Current with changes through the 2024 First Special Legislative Session

Section 44-8105 - Terms, defined

For purposes of the Nebraska Protection in Annuity Transactions Act:

(1) Annuity means an annuity that is an insurance product under state law and is individually solicited, whether the product is classified as an individual or group annuity;

(2) Cash compensation means any discount, concession, fee, service fee, commission, sales charge, loan, override, or cash benefit received by a producer from an insurer or intermediary or directly from the consumer in connection with the recommendation or sale of an annuity;

(3) Consumer profile information means any 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 consumer's:

(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;

(4) Continuing education credit means one clock hour of an approved continuing education activity certified by the Director of Insurance pursuant to subsection (1) of section 44-3905;

(5) Continuing education provider means an individual or entity that is approved to offer continuing education activities pursuant to subsection (1) of section 44-3905;

(6) Insurer means a company required to be licensed under the laws of this state to provide insurance products, including annuities;

(7) Intermediary means an entity contracted (a) directly with an insurer or (b) with another entity that is contracted with an insurer to facilitate the sale of the insurer's annuities by producers;

(8) Material conflict of interest means a financial interest of the producer in the sale of an annuity that a reasonable person would expect to influence the impartiality of a recommendation, but does not include cash compensation or noncash compensation;

(9) 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;

(10) Nonguaranteed elements means the premiums, credited interest rates, including any bonus, benefits, values, dividends, non-interest-based credits, charges, or elements of formulas used to determine any of the listed elements that are subject to company discretion and are not guaranteed at issue. An element is considered nonguaranteed if its calculation uses any underlying nonguaranteed element;

(11) Producer means

(a) a person required to be licensed under the laws of this state to sell, solicit, or negotiate insurance, including annuities, or

(b) if no person described in subdivision (11)(a) of this section is involved, an insurer;

(12) 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, but does not include general communication to the public, generalized consumer services assistance or administrative support, general education information and tools, prospectuses, or other product and sales material; and

(13) 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 the proposing insurer that, by reason of the transaction, an existing annuity or other insurance policy has been or is to be:

(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.

Neb. Rev. Stat. §§ 44-8105

Laws 2006, LB 875, § 17; Laws 2007, LB117, § 30; Laws 2012, LB 887, § 25; Laws 2018, LB 743, § 28; Laws 2021, LB 22, § 3.

Amended by Laws 2021, LB 22,§ 3, eff. 4/8/2021.

Amended by Laws 2018, LB 743,§ 28, eff. 7/19/2018.