FIA Insurance Companies have begun Auditing for PTE 84-24

Here’s the Skinny,

If you are not operating under BICE, you better have a PTE 843-24 document signed by clients and in your files for all FIA sales!

At least three of the largest FIA Carriers (Fixed Index Annuity Carriers) have announced that beginning January 2018, they will be conducting random audits and/or random app requests in order to verify that agents/advisors are properly disclosing and collecting client signatures on their PTE 84-24 disclosure forms.

The carriers include (but are not limited to):

  • Allianz Life
  • American Equity
  • Athene USA

Last year I wrote in detail regarding the conundrum for advisors between BICE and PTE 84-24.  As I shared at the time, if your BD and/or Corporate RIA do not extend BICE coverage to you (and most do not) on FIA transactions, then you must adhere to PTE 84-24 on all your FIA transactions.

As I stated in that previous Advisor Skinny blog post

“Under the transitional PTE 84-24, the agents/advisors must disclose conflicts of interest plus the sales commission, expressed as a percentage of gross annual premium payments for the first year and for each of the succeeding renewal years, that will be paid to the agent in connection with the purchase of the product. Documentation must be provided to and signed by the client and retained by the agent/advisor for 6 years (meaning written disclosure and client signature is required).”

For additional commentary on this subject, click here and refer to the full Advisor Skinny blog post titled,  “Did You Get Abandoned (to Fend for Yourself) on DOL PTE 84-24?”

Again, if you are not afforded BICE coverage, make sure your files are in order and signatures are being obtained under PTE 84-24.

That’s the Skinny,