The NAIC Suitability in Annuity Transactions Model is a regulatory framework that establishes standards for recommending annuity products to consumers. It requires insurers and producers to ensure that any recommended annuity is suitable based on the consumer's financial status, tax situation, investment objectives, time horizon, liquidity needs, and risk tolerance. The model specifies required information to be gathered on suitability forms, sets expectations for product-specific training, and outlines supervisory obligations for carriers. Recent revisions incorporate a best interest standard in many adopting states, elevating the duty of care and documentation required for annuity recommendations. The model aims to prevent inappropriate sales and to improve alignment between annuity features and consumer needs while maintaining access to a range of commission-based products.

In daily practice, the NAIC Suitability in Annuity Transactions Model is felt through detailed fact-finding and suitability questionnaires that must be completed before submitting annuity applications. Advisors ask about income, assets, existing insurance and investments, liquidity preferences, and time horizons, using that information to determine whether a fixed, indexed, variable, or income annuity is appropriate. Compliance teams review submitted cases for completeness and consistency with the model's standards, sometimes requesting additional explanations when choices appear inconsistent with the client's profile. Training modules and continuing education courses teach producers how to apply suitability criteria and document rationales. Understanding the NAIC Suitability in Annuity Transactions Model helps advisors design recommendations that stand up to regulatory scrutiny and genuinely serve clients' long-term interests.