Ethics & Professional Responsibility in Annuity Sales
Table of Contents
Course Introduction	1
Defining Ethics	1
Suitability	1
Conflicts of Interest	2
Prioritizing the Needs of the Client	2
Canadian Council of Insurance Regulators (CCIR)	2
Is the Product Suitable?	2
In Canada, suitability is considered….	3
Adequate Communication Skills	5
Choosing Wisely	5
Examples 1 and 2	5
The Test of Time	6
Ethics Connection	6
Finding the Right Products	7
Case Example	7
Old Money; New Money	8
Ethics Note	8
Annuity Participants	8
Ethics Note	8
Types of Annuities	9
Ethics Note	9
Benefit Payment	9
Immediate Annuities	9
Deferred Annuities	10
Ethics Note	10
Payment Methods	10
Simple Premium Annuities	10
Flexible Premium Annuities	10
Ethics Note	11
Annuity Type Based on Policyowner Risk	11
Segregated Fund Contracts	11
Canadian vs US Terminology	12
Guaranteed Structures: 75% vs 100%	12
Provincial Regulatory Notes	12
Ethics Note	13
Fixed Rate Annuities	13
Annuitization of Fixed Annuities	14
Ethics Note	14
Declared Rate Fixed Annuities	15
Ethics Note	15
Single Premium Fixed Annuities	15
Flexible Premium Fixed Annuities	15
Ethics Note	15
Index-Linked Annuities	16
Canadian vs US Terminology	16
Ethics Note	16
Declared Interest and Reset Features	16
Ethics Note	17
Accumulation and Distribution Phases	17
Ethics Note	17
Provincial Difference in Oversight	18
Suitability & Ethics in Index-Linked Annuity Sales	18
Comparisons to Other Products	19
Historical Context	19
Fees & Expenses	19
Ethics Note	19
Financially Sound Insurers	20
Ethics Note	20
Determining Suitability	20
Sales Practices	21
Product Replacement	21
Suitability Checklist (Sample Form)	22
Full Disclosure	23
Product Knowledge	24
Ethics Note	24
Identifying Suitability Issues	24
Red Flags in Suitability	25
Advisor Reminder	26
It is Not a Liquidity Issue but Rather a Suitability Issue	26
Liquidity Assessment Mini-Checklist (Sample Form)	27
A Comprehensive Financial Plan	28
Ethics Note	28
Terminology for Index-Linked Annuity Products	29
Canadian Regulatory Note	30
Ethics & Terminology	30
General Contract Provisions	30
Entire Contract	30
Ethics Note	30
Changes and/or Waivers	31
Ethics Note	31
Misstatements	31
Ethics Note	32
Required Reporting	32
Provincial Note	32
Ethics Note	33
Other Contract Items	33
Ethics Note	33
Sample Disclosure & Initialing Checklist	34
Recognizing & Addressing a Conflict of Interest	35
Canadian Guidance on Conflicts of Interest	35
Ethics & Professional Standards	36
Ethics Note	36
Disclosing Potential Conflicts	36
Canadian Regulatory Approach	36
Ethics Note	37
Placing the Client’s Interests First	37
Commissions & Disclosure	37
Ethics Note	38
Practical Checklist: Putting the Client First	38
CCIR Considers Issues in the US	38
Ethics Note	39
Recognizing Investing Risk	39
Ethics Note	40
Needs-Based Sales & The Treatment of Customers in Canada	40
Today’s Regulatory Environment	40
The Current Framework: FTC and CISRO Principles	40
CISRO Principles of Conduct	40
Provincial Variations & Oversight	40
Expanded Ethical Considerations	42
Examples 1 and 2	42
The Evolution from “Needs-Based” to “Client-Centric”	42
Core Elements of Client-Centric Suitability	42
Provincial Oversight: A Comparative View	43
Ethics & Suitability: Where They Intersect	44
Practical Tools: Suitability Checklists	45
Case Examples (1-3)	45
Emerging Issues in Suitability	45
Applied Ethics Case Studies: Beyond Compliance	46
Case Study 1 and 2	46
Cast Study 3 through 5	47
Ethics Note	47
Advocis	47
Ethics Note	48
Chart: Practical Implications for Advisors	48
How is Canada Doing?	49
National Oversight & the Rise of the FTC	49
The Role of CCIR and CISRO	49
Ethics Note	49
Cooperative Thematic Reviews (CTRs)	49
Case Study	50
Provincial Snapshots: Oversight Across Canada	50
Ethics Note	50
Disciplinary Example (RIBO)	51
Disciplinary Example (AB)	52
Ethics Note	52
Disciplinary Example (BC)	52
Disciplinary Example (MB)	52
Disciplinary Example (NS)	52
Governance & Business Culture	53
Case Study	53
Incentives, Compensation & Conflicts	53
Ethics Note	53
Expanded Ethical Challenges	53
Practical Tools for Agents	54
Global Context: How Canada Compares	55
Conclusion: From Suitability to Professionalism	55
The Three Pillars of Ethical Insurance Practices	55
1. Suitability as the Foundation	55
Ethics Note	56
2. Disclosures as the Safeguard	56
3. FTC as the Guiding Principle	56
Professionalism Beyond Compliance	56
Emerging Ethical Frontiers	57
Case Reflections: Learning from Missteps	57
Building a Culture of Trust	58
Final Takeaway	58

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