Fiduciary/Best Interest Development

  • Effective October 17, 2022, Wisconsin enacted a law requiring that insurance intermediaries act in the best interest of the consumer when making a recommendation of an annuity.
  • The law imposes a care obligation, disclosure obligation, conflict of interest obligation and documentation obligation.
  • The care obligation requires that the insurance intermediary exercise reasonable diligence, care and skill in making the recommendation taking into account the consumer’s financial situation, insurance, needs, financial objectives and the available options.
  • Prior to recommending an annuity, the insurance intermediary must prominently disclose to the consumer: the scope and terms of the relationship with the consumer and the role of the insurance intermediary in the transaction; a description of the compensation to be received by the insurance intermediary and notice of the consumer’s right to request additional information about the compensation.
  • At the time of the recommendation or sale, the insurance intermediary must make a written record of any recommendation and the basis for the recommendation and obtain a signed statement from the consumer if the consumer refuses to provide or provides insufficient consumer profile information.
  • The insurance intermediary must identify and avoid or reasonably manage and disclose material conflicts of interest.
  • The insurer must maintain reasonable procedures to ensure compliance with these requirements.
  • The law does not create a private cause of action.


2021 Wis. Act 260

Wis. Stat. § 628.347

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