Fiduciary/Best Interest Development

  • Effective January 1, 2023, Hawaii enacted a law governing the duties of insurers and producers
    similar to the NAIC model rule (discussed below).
  • It provides that in recommending the purchase or exchange of annuity to a consumer that results
    in an insurance transaction, the insurance producer, or the insurer where no producer is involved,
    must have reasonable grounds for believing the recommendation is suitable for the consumer
    based on the facts, including suitability information provided by the consumer about the
    customer’s investments, other insurance products, financial situation and needs.
  • The consumer must be reasonably informed of the various features of the annuity (surrender charges and periods, fees, product enhancements, etc.).
  • At the time of the sale, the producer or insurance representative must make a written record of any recommendation.
  • The statute also requires the insurer to establish and maintain a supervision system that is reasonably designed to achieve compliance and describes the procedures that should be implemented.


Laws of Hawaii, ch 58, sec 7

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