L&HMAmedium
A MA producer recommends that a client surrender an existing deferred annuity and use the proceeds to fund a new deferred annuity via an IRC §1035 exchange. Which MA requirements are most directly triggered?
AOnly the producer's appointment paperwork must be updated
BOnly c. 176D advertising rules apply
CNo special MA rules apply because §1035 is federal tax law
Both 211 CMR 34.00 and 211 CMR 96.00
Why this is the answer
A §1035 annuity-to-annuity exchange is a replacement under 211 CMR 34.00 and a covered recommendation under 211 CMR 96.00. The producer must complete replacement notices, comparison disclosures, and document why the new contract is in the consumer's best interest.
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