Defined terms for the annuity market and lifetime income landscape.
Suitability standard is a producer conduct standard requiring that an annuity recommendation be suitable for the individual based on information gathered about the individual's financial situation, needs, and objectives, without requiring that the recommendation be the best available option.
A summary plan description is the participant-facing document that explains a retirement plan's terms in language calculated to be understood by the average participant, required by the Employee Retirement Income Security Act to be furnished to every participant and beneficiary.
Surplus notes are subordinated debt instruments issued by an insurance carrier that receive treatment as part of the carrier's statutory surplus under US insurance regulatory accounting, subject to specific approval requirements and payment restrictions enforced by state insurance regulators.
A surrender charge is a fee imposed by the carrier when a contract owner withdraws funds from a deferred annuity in excess of the contract's free withdrawal allowance during the surrender period, calculated as a percentage of the amount withdrawn under a typically declining schedule.
