Index Bonus 115 Fixed Index Annuity NAIC Training Issued by Forethought Life Insurance Company. Effective January 2017

Transcription

1 Index Bonus 115 Fixed Index Annuity NAIC Training Issued by Forethought Life Insurance Company Effective January 2017

2 This material is intended to provide educational information regarding the features and mechanics of the product and is intended for producer use only. It should not be considered, and does not constitute, personalized investment advice. The issuing insurance company is not an investment adviser nor registered as such with the SEC or any state securities regulatory authority. It s not acting in any fiduciary capacity with respect to any contract and/or investment. The revised NAIC Suitability in Annuity Transaction Model regulation, in pertinent part, expands the suitability criteria necessary for an insurer or producer to recommend an annuity and requires completion of both a one time, four hour general annuity training course and a one time product specific training course. The information in this document is confidential and may not be shared, copied or otherwise disseminated to anyone other than individuals identified as being directly involved in the sales process. All information is subject to change. 2

3 Index Bonus 115 Fixed Index Annuity Index Bonus 115 offers a 15% Income Bonus* and a Guaranteed Lifetime Income Benefit (GLIB). Index Bonus 115 is a single premium deferred annuity that is available for nonqualified, IRA, and Roth IRA plans. Available to clients age 0-85 $10,000 minimum premium $1,000,000 maximum total premium for ages 0-75** $500,000 maximum total premium for ages 76-85** *Not available on cash surrender. **Maximum premium is measured by cumulative premium contributions per person, for all annuities issued by Forethought Life Insurance Company. 3

4 Index Bonus 115 Fixed Index Annuity Contract Value TWO ACCOUNT VALUES Guaranteed Lifetime Income Account Value (GLIAV) walk-away value Provides potential growth for Guaranteed Lifetime Annual Income (GLAI), withdrawal, surrender, or death benefit income floor value Provides guaranteed growth for Guaranteed Lifetime Annual Income (GLAI) Growth tied to interest crediting strategies selected 15% income bonus (not available on cash surrender) 6% annual growth guaranteed each contract anniversary for the first 10 years or until start of GLAI 4

5 Index Bonus 115 Fixed Index Annuity Contract Value TWO ACCOUNT VALUES Guaranteed Lifetime Income Account Value (GLIAV) walk-away value income floor value Prior to starting Guaranteed Lifetime Annual Income, the accounts will produce different results. Guaranteed Lifetime Annual Income will equal a percentage of the account with the higher value when the benefit is triggered. 5

6 Index Bonus 115 Fixed Index Annuity Contract Value TWO ACCOUNT VALUES Guaranteed Lifetime Income Account Value (GLIAV) walk-away value Contract Value continues to earn interest based upon the interest strategies selected. income floor value When the Owner begins their Guaranteed Lifetime Annual Income, growth of the GLIAV stops. Withdrawals of Guaranteed Lifetime Annual Income are deducted from the Contract Value. If, over time, the Contract Value should fall to zero as a result of withdrawals, the Guaranteed Lifetime Annual Income withdrawal continues to the Owner for their lifetime.* *Assuming no excess withdrawals. 6

7 Index Bonus 115 Fixed Index Annuity Guaranteed Lifetime Income Benefit (GLIB) There is an annual rider charge for the Guaranteed Lifetime Income Benefit (GLIB). The charge is calculated using the Contract Value as of the prior contract anniversary and is deducted monthly from the Contract Value. The GLIB is available to the client anytime after the owner attains age 59½. Guaranteed Lifetime Income Account Value (GLIAV) The GLIAV is a figure used to calculate the client s Guaranteed Lifetime Annual Income withdrawal amount. It is NOT part of the Contract Value and is NOT available on cash surrender. Minimum Guaranteed Contract Value The Minimum Guaranteed Contract Value is equal to 87.5% of premiums paid, less withdrawals and rider charges, compounded at a rate between 1% and 3%. 7

8 Index Bonus 115 Fixed Index Annuity Income Options The client may choose from four income options when beginning the GLIB: 1 2% annual cost of living increases begin on the 2 nd anniversary following activation of the benefit, and end once the Contract Value is depleted. 2 The age of the younger owner at the time of benefit election determines the joint life income benefit factor. Only legal spouse at time of benefit election is eligible for spousal continuation. ATTAINED AGE AT OPTION DATE SINGLE LIFE LEVEL INCOME 3 Company declared income benefit factors effective February 1, These factors are subject to change. The income benefit factors at contract issue are guaranteed to remain the same for at least 13 contract months. Factors may change in the 14 th contract month and beyond, subject to guaranteed minimums described above. Once an income option is selected, the income benefit factor is guaranteed for life. INCOME BENEFIT FACTORS SINGLE LIFE WITH COST OF LIVING INCREASE 1 JOINT LIFE LEVEL INCOME 2 CURRENT COMPANY DECLARED RATES 3 (guaranteed at issue for at least 13 contract months) JOINT LIFE WITH COST OF LIVING INCRASE 1, % 3.00% 3.00% 2.00% % 4.00% 4.00% 3.00% % 5.00% 5.00% 4.00% CONTRACT YEARS GUARANTEED MINIMUM RATES (all ages) % 3.00% 3.00% 2.00% % 2.00% 2.00% 1.00% 8

9 Index Bonus 115 Fixed Index Annuity Interest Crediting Methods 1 Clients have the option of allocating funds to any of the interest crediting methods listed below. Interest is credited daily for the Fixed Account and at the end of the crediting terms for the index-based strategies. One-year Fixed Rate One-year S&P 500 Annual Point-to-Point with Cap One-year S&P 500 Monthly Point-to-Point with Cap BlackRock Diversa TM Volatility Control 2 Two-Year Point-to-Point With Spread Indexed Strategy Barclays ARMOUR II Volatility Control 3 Three-Year Point-to-Point With Spread Indexed Strategy Funds may be allocated to the BlackRock strategy at any anniversary and reallocated to any available method at the end of each term. The minimum allocation to a method is $5,000. Interest credited to the index-linked crediting methods is guaranteed not to be less than 0%. Interest credited with the fixed rate method is guaranteed not to be less than 0.50%. Fixed rates and index caps are declared in advance and guaranteed for the entire Strategy Term. Rates and caps will never be less than the minimum guaranteed interest rate or index cap described in the contract. Spreads are declared in advance and guaranteed for the entire Strategy Term and will never be more than the maximum guaranteed spread. Guarantees are based on the claims-paying ability of Forethought Life Insurance Company and assume compliance with the product s benefit rules, as applicable. 1 The crediting methods are subject to a 0% minimum, and either a cap or spread apply. Caps and spreads are declared at the beginning of each strategy term, and any calculated index credit is credited at the end of the strategy term. The strategy terms are 1 year for S&P strategies, 2 years for BlackRock strategy, and 1 year for Fixed Rate strategy. 2 Formally known as BlackRock ibld Diversa TM VC7 ER Index 3 Formally known as Barclays ARMOUR II Gross USD 7% ER Index Crediting methods are subject to state availability. Indices are not available for direct investment. 9

10 Interest Crediting Strategies Based on S&P 500 One-year S&P 500 Annual Point-to-Point with Cap Interest credited annually based on a comparison of the S&P 500 at the start of the period to the index value after one year One-year S&P 500 Monthly Point-to-Point with Cap Performance of the S&P 500 is tracked monthly Mirrors positive index returns up to a maximum, or cap Interest is credited annually based upon the sum of positive monthly index returns (subject to a cap) and negative monthly index returns over a 12-month period to determine a percentage change Equals the cap if the index outperforms the cap If the resulting 12-month sum is positive, client receives that rate of interest crediting based on index performance Equals 0% if the index performance is zero or negative If the resulting 12-month sum is negative, client will receive 0% crediting for the year 10

11 Interest Crediting Strategies based on BlackRock Diversa TM Volatility Control and Barclays ARMOUR II Volatility Control Indices BlackRock Diversa TM Volatility Control Two-Year Point-to- Point With Spread Indexed Strategy Barclays ARMOUR II Volatility Control Three-Year Point-to- Point With Spread Indexed Strategy Tracked over a two-year period and credits interest equal to the percentage change in the index from the start to the end of the period, minus a stated spread Tracked over a three-year period and credits interest equal to the percentage change in the index from the start to the end of the period, minus a stated spread Funds may only be allocated out of the strategy at the end of the twoyear period Funds may only be allocated out of the strategy at the end of the three-year period Credits 0% if the performance is less than or equal to the spread May offer greater potential to maximize interest crediting While there is no cap on index returns, remember, returns will be subject to a spread* Generally when compared to other strategies with a cap, a spread strategy may capture greater overall interest credits in years of strong index performance, but will have lower interest credits in years of lower index performance * There is a spread deduction. Please refer to a personalized illustration for more information regarding spread deductions and both guaranteed and nonguaranteed elements. 11

12 Interest Crediting Strategies based on BlackRock Diversa TM Volatility Control and Barclays ARMOUR II Volatility Control Indices BlackRock Diversa TM Volatility Control Two-Year Point-to- Point With Spread Indexed Strategy Diversified, multi-asset allocation strategy 21 ishares Exchange Traded Funds (ETFs) Equities 50%* U.S., International Developed, Emerging Markets Fixed Income 45%* High Yield, Credit, Rates, Mortgages Alternatives 5%* REITs, Commodities Cash (as needed to maintain 7% volatility control) * The reference allocations above are for the ishares ETFs prior to any allocation to cash for volatility control purposes. Allocations adjusted monthly, based on a trend-following model designed to overweight assets with the highest historical total return and underweight assets with the lowest historical total return Daily volatility control increases cash weight, pro-rata across assets, to maintain a target volatility below 7% +/- 5% variance from reference allocation for each ETF Barclays ARMOUR II Volatility Control Three-Year Point-to- Point With Spread Indexed Strategy Multi-asset class momentum-based allocation strategy Developed Equity (S&P Total Return Index) Emerging Markets Equity Commodities Gold Bonds Cash Asset allocation is split between two best-performing asset classes Based on prior month s actual performance of each class 60% to the best performing asset class 40% to the second-best performing asset class Incorporates a daily volatility control feature designed to mitigate risk determines the percentage of the index that will be invested in cash each day to maintain a 7% target volatility A fixed index annuity is not a registered security or stock market investment and does not directly participate in any stock or equity investments or index. 12

13 Index Bonus 115 Fixed Index Annuity Withdrawal Charge Schedules 1 Contract Year Charge 12% 12% 11% 10% 9% 8% 7% 6% 4% 2% 0% Free Withdrawals 10% of the beginning-of-year Contract Value can be withdrawn each year after the first contract year (except in year of full surrender). 1,2 The Required Minimum Distribution (RMD) imposed by the IRS for the contract, if qualified. 1 Variations apply in states of AK, CA, CT, DE, FL, HI, IA, LA, MN, NH, NJ, NV, OH, OK, OR, SC, TX, UT and WA. 2 Some states may allow free withdrawals in first contract year and in year of full surrender. 13

14 Index Bonus 115 Fixed Index Annuity Increased Death Benefit Guarantee Rider Guarantees the death benefit is equal to no less than initial premium paid less withdrawals, plus 5% of premium less withdrawals for each full contract year completed. This death benefit increases until age 85 or until the rider s death benefit equals 200% of premium less withdrawals, whichever comes first. Available for issue ages 0-75 for annual charge and applies only to the Owner of the contract. 14

15 Index Bonus 115 Fixed Index Annuity Nursing Home Waiver Rider At any time on or after the first contract anniversary, if the client should become confined to an approved nursing facility for at least 60 consecutive days, withdrawal charges on any portion of the Contract Value withdrawn will be waived. Terminal Illness Waiver Rider At any time on or after the first contract anniversary, should the client be diagnosed with a terminal illness with a life expectancy of less than 12 months, withdrawal charges will be waived on any portion of the Contract Value withdrawn. 15

16 Producer Guidelines Global Atlantic is committed to marketing and selling only those products that meet our Clients needs. Determining the appropriateness of an annuity for a particular Client is the most important service an Agent provides. A purchase recommendation is suitable when it is based on the Client s: Suitability Annuity Product Training Market Conduct Advertising Age Annual income Financial situation and needs, including the financial resources used for the funding of the annuity Financial experience Financial objectives Intended use of the annuity Financial time horizon Existing assets, including investment and life insurance holdings Liquidity needs Liquid net worth Risk tolerance Tax status All other information needed to make a proper recommendation Agents must complete Global Atlantic s product-specific training prior to soliciting our annuity products in all states. Global Atlantic has partnered with RegEd for training and continued education for all agents. The Annuity Model Regulation specifies that agents must complete four-hour general annuity CE training which will be offered by and tracked through RegEd. Agents must remain in compliance with all applicable anti-money laundering (AML) laws and regulations. Agents shall not use or authorize any advertisement, circular, news release, or other communication using Global Atlantic s name or our product names (whether written, verbal, audio, or visual) without prior written approval by us. 16

17 Producer Guidelines Replacements As an Agent, please remember it is your responsibility to ensure that the product or contract meets the financial objectives of the Client. Agents must make the Company aware of all instances that support a recommendation that a client replace an existing contract, especially when significant surrender charges will be incurred as the result of the replacement. Agents and insurers are prohibited from recommending the replacement or conservation of an existing policy by use of materially inaccurate presentations. Unnecessary Replacements Patterns of action by policy owners who purchase replacement policies from the same Agent after indicating on applications that replacement is not involved in the sale, constitutes a rebuttable presumption of the Agent s knowledge that replacement is intended in connection with the sale of those policies and of the Agent s intent violate the rule. Churning occurs when an agent, for the purpose of generating commission, persuades a policy owner to lapse, surrender, or otherwise terminate an existing insurance policy and replace it with another policy where the transaction provides little or no economic benefit to the client. Churning is misleading, unethical and constitutes an unfair and deceptive practice. 17

18 Producer Guidelines Definition of Replacement A Replacement is any transaction in which a new policy or contract is to be purchased; and that by reason of the transaction, an existing life insurance or annuity policy has been or is to be: Lapsed, forfeited, surrendered or partially surrendered, assigned to the replacing insurer or otherwise terminated; Converted to reduced paid-up insurance, continued as extended term insurance, or otherwise reduced in value by the use of non-forfeiture benefits or other policy values; Amended so as to effect either a reduction in benefits or in the term for which coverage would otherwise remain in-force or for which benefits would be paid; Reissued with any reduction in cash value; or Used in a financed purchase. Replacement Determination To determine whether replacement involving a policy or contract is in the Client s long-term best interest, the Agent is expected to: Comply with applicable state and federal statutes and Global Atlantic procedures; Apply Global Atlantic s definition of replacement; Analyze each replacement to determine if it is appropriate for the Client; Provide the information necessary for the Client to make an informed decision; Disclose on the application whether replacement is involved; and Provide and explain the applicable Replacement Notice to the Client and complete any applicable Replacement Comparison Form. 18

19 Producer Guidelines Replacement Review Considerations for Replacements A replacement of existing life insurance or an annuity may not always be in the long-term best interest of the Client. If replacement is contemplated, it is crucial that the Agent assist the Client in determining whether replacement is appropriate in light of the Client s goals and objectives. When replacement is considered, the Client needs to recognize the potential advantages and disadvantages of replacement. Before recommending a replacement you must consider whether: The Client will incur a withdrawal charge, be subject to the commencement of a new withdrawal period, lose existing benefits, or be subject to increased fees; The Client would benefit from product enhancements and improvements; or The Client has had another annuity replacement, particularly within the preceding 36 months. The possible alternative to replacement is to leave the existing contract intact and purchase a new policy or contract. 19

20 Important Information Guarantees are based on the claims-paying ability of Forethought Life Insurance Company and assume compliance with the product s benefit rules, as applicable. Index Bonus 115 fixed index annuity, issued by Forethought Life Insurance Company, 10 West Market Street, Suite 2300, Indianapolis, Indiana. Available in most states with contract FA2001SPDAX-01 and FA2001SPDAXL-01 (certificate series GA2001SPDAX-01, as applicable). A fixed index annuity is intended for retirement or other long-term needs. It is intended for a person who has sufficient cash or other liquid assets for living expenses and other unexpected emergencies, such as medical expenses. A fixed index annuity is not a registered security or stock market investment and does not directly participate in any stock or equity investments or index. Taxable distributions (including certain deemed distributions) are subject to ordinary income taxes, and if made prior to age 59½, may also be subject to a 10% federal income tax penalty. Payments from IRAs are taxable in accordance with the normal rules surrounding taxation of payments from an IRA. Early surrender charges may also apply. Withdrawals may reduce any optional guaranteed amounts in an amount more than the actual withdrawal. This information is written in connection with the promotion or marketing of the matter(s) addressed in this material. The information cannot be used or relied upon for the purpose of avoiding IRS penalties. These materials are not intended to provide tax, accounting or legal advice. As with all matters of a tax or legal nature, you should consult a tax or legal counsel for advice. Products and features are subject to state availability and variations. Read the Contract for complete details. Global Atlantic Financial Group (Global Atlantic) is the marketing name for Global Atlantic Financial Group Limited and its subsidiaries, including Forethought Life Insurance Company and Accordia Life and Annuity Company. Each subsidiary is responsible for its own financial and contractual obligations. 20

21 Important Information Important Information The S&P 500 Index is a product of S&P Dow Jones Indices LLC ( SPDJI ) and has been licensed for use by Forethought Life Insurance Company. Standard & Poor s, S&P and S&P 500 are registered trademarks of Standard & Poor s Financial Services LLC ( S&P ); Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC ( Dow Jones ); and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by Forethought Life Insurance Company. Forethought Fixed Index Annuity is not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P or any of their respective affiliates (collectively, S&P Dow Jones Indices ). S&P Dow Jones Indices makes no representation or warranty, express or implied, to the owners of the Forethought Fixed Index Annuity or any member of the public regarding the advisability of investing in securities generally or in Forethought Fixed Index Annuity particularly or the ability of the S&P 500 Index to track general market performance. S&P Dow Jones Indices only relationship to Forethought Life Insurance Company with respect to the S&P 500 Index is the licensing of the Index and certain trademarks, service marks and/or trade names of S&P Dow Jones Indices or its licensors. The S&P 500 Index is determined, composed and calculated by S&P Dow Jones Indices without regard to Forethought Life Insurance Company or the Forethought Fixed Index Annuity. S&P Dow Jones Indices have no obligation to take the needs of Forethought Life Insurance Company or the owners of Forethought Fixed Index Annuity into consideration in determining, composing or calculating the S&P 500 Index. S&P Dow Jones Indices is not responsible for and has not participated in the determination of the prices, and amount of Forethought Fixed Index Annuity or the timing of the issuance or sale of Forethought Fixed Index Annuity or in the determination or calculation of the equation by which Forethought Fixed Index Annuity is to be converted into cash, surrendered or redeemed, as the case may be. S&P Dow Jones Indices has no obligation or liability in connection with the administration, marketing or trading of Forethought Fixed Index Annuity. There is no assurance that investment products based on the S&P 500 Index will accurately track index performance or provide positive investment returns. S&P Dow Jones Indices LLC is not an investment advisor. Inclusion of a security within an index is not a recommendation by S&P Dow Jones Indices to buy, sell, or hold such security, nor is it considered to be investment advice. Notwithstanding the foregoing, CME Group Inc.. and its affiliates may independently issue and/or sponsor financial products unrelated to Forethought Fixed Index Annuity currently being issued by Forethought Life Insurance Company, but which may be similar to and competitive with Forethought Fixed Index Annuity. In addition, CME Group Inc. and its affiliates may trade financial products which are linked to the performance of the S&P 500 Index. 21

22 Important Information Important Information S&P DOW JONES INDICES DOES NOT GUARANTEE THE ADEQUACY, ACCURACY, TIMELINESS AND/OR THE COMPLETENESS OF THE S&P 500 INDEX OR ANY DATA RELATED THERETO OR ANY COMMUNICATION, INCLUDING BUT NOT LIMITED TO, ORAL OR WRITTEN COMMUNICATION (INCLUDING ELECTRONIC COMMUNICATIONS) WITH RESPECT THERETO. S&P DOW JONES INDICES SHALL NOT BE SUBJECT TO ANY DAMAGES OR LIABILITY FOR ANY ERRORS, OMISSIONS, OR DELAYS THEREIN. S&P DOW JONES INDICES MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES, OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE OR AS TO RESULTS TO BE OBTAINED BY FORETHOUGHT LIFE INSURANCE COMPANY, OWNERS OF THE FORETHOUGHT FIXED INDEX ANNUITY, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE S&P 500 INDEX OR WITH RESPECT TO ANY DATA RELATED THERETO. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT WHATSOEVER SHALL S&P DOW JONES INDICES BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES INCLUDING BUT NOT LIMITED TO, LOSS OF PROFITS, TRADING LOSSES, LOST TIME OR GOODWILL, EVEN IF THEY HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, WHETHER IN CONTRACT, TORT, STRICT LIABILITY, OR OTHERWISE. THERE ARE NO THIRD PARTY BENEFICIARIES OF ANY AGREEMENTS OR ARRANGEMENTS BETWEEN S&P DOW JONES INDICES AND FORETHOUGHT LIFE INSURANCE COMPANY, OTHER THAN THE LICENSORS OF S&P DOW JONES INDICES. BlackRock, Inc. and its affiliates ( BlackRock ) is not the issuer or producer of any annuity product associated with Forethought Life Insurance Company and BlackRock has no responsibilities, obligations or duties to purchasers of such products. The BlackRock ibld Diversa TM VC7 ER Index is a product of BlackRock Index Services, LLC and has been licensed for use by Forethought Life Insurance Company. BLACKROCK, BlackRock ibld Diversa TM VC7 ER Index, and the corresponding logos are registered and unregistered trademarks of BlackRock. While Forethought Life Insurance Company may for itself execute transactions with BlackRock in or relating to the BlackRock ibld Diversa TM VC7 ER Index in connection with its annuity products purchasers acquire all such annuity products from Forethought Life Insurance Company and neither acquire any interest in the BlackRock ibld Diversa TM VC7 ER Index nor enter into any relationship of any kind with BlackRock upon purchasing such products. Forethought annuity products are not sponsored, endorsed, sold or promoted by BlackRock. BlackRock makes no representation or warranty, express or implied, to the owners of any Forethought annuity product or any member of the public regarding the advisability of purchasing such products nor does it have any liability for any errors, omissions or interruptions of the BlackRock ibld Diversa TM VC7 ER Index. BlackRock shall not be liable in any way to the issuer, purchasers, or any other party in respect of the use or accuracy of the BlackRock ibld Diversa TM VC7 ER Index or any data included therein. 22

23 Important Information Important Information Barclays ARMOUR II Volatility Control Index is a trademark of Barclays Bank PLC or its affiliates and has been licensed for use in connection with the issuance and distribution of Index Bonus 115. Index Bonus 115 is not sponsored by, endorsed, sold or promoted by Barclays, and Barclays makes no representation regarding the advisability of purchasing Index Bonus 115. Barclays Bank PLC and its affiliates ( Barclays ) is not the issuer or producer of Index Bonus 115 and Barclays has no responsibilities, obligations or duties to purchasers of Index Bonus 115. The Barclays ARMOUR II Volatility Control Index is a trademark owned by Barclays Bank PLC and licensed for use by Forethought Life Insurance Company as the Issuer of Index Bonus 115. While Forethought Life Insurance Company may for itself execute transaction(s) with Barclays in or relating to the Barclays ARMOUR II Volatility Control Index in connection with Index Bonus 115, purchasers, acquire Index Bonus 115 from Forethought Life Insurance Company and purchasers neither acquire any interest in Barclays ARMOUR II Volatility Control Index nor enter into any relationship of any kind whatsoever with Barclays upon purchasing Index Bonus 115. Index Bonus 115 is not sponsored, endorsed, sold or promoted by Barclays and Barclays makes no representation regarding the advisability of Index Bonus 115 or use of the Barclays ARMOUR II Volatility Control Index or any data included therein. Barclays shall not be liable in any way to the Issuer, purchasers, or to other third parties in respect of the use or accuracy of Barclays ARMOUR II Volatility Control Index or any data included therein. Indices are not available for direct investment. 23

24 Important Information Iowa Insurance Division Clarifies Distinction Between Insurance and Investment Advice The Iowa Insurance Division issued Insurance Bulletin 11-4 in 2011 to provide guidance to persons who hold only an insurance license or a securities license on what activities they can engage in and what discussions they can have with consumers about products they are not licensed to sell. Insurance Bulletins do not constitute new regulation, but are rather an interpretation of existing laws and regulations, designed to provide more clarity on the line between insurance advice and investment advice. In recent years there has been considerable discussion among regulators, and within the insurance and securities industries, about the appropriateness of certain interactions that insurance producers have with consumers who own securities, particularly when those securities are liquidated and used to fund all or part of the premium (s) of an insurance product. The stated purpose of Iowa Insurance Bulletin 11-4 is to provide guidance to insurance producers, investment advisor representatives, and securities agents about: (1) The permissible and prohibited activities of Insurance-Only Persons under insurance and securities laws and regulations with respect to a recommendation to purchase an annuity contract or life insurance policy made to a consumer who may choose to liquidate a security in connection with such purchase and (2) The permissible and prohibited activities of Securities-Only Persons under insurance and securities laws and regulations with respect to a recommendation to purchase a security made to a consumer who may choose to surrender part or all of the proceeds from an insurance product in conjunction with such a purchase. Through Bulletin 11-4, the Iowa Insurance Division has provided welcomed guidelines that are instructive to those producers and agents who are only licensed to sell certain types of products. Insurance (licensed)-only Persons in the state of Iowa will better understand what activities they need to avoid, while still providing a suitable recommendation to their clients. Likewise, persons who only hold a securities license will have a better understanding of the limitations of their licenses when commenting upon matters involving insurance. It is important that all Iowa-licensed Global Atlantic producers read Bulletin 11-4 in its entirety, and particularly note Sections III and IV which are designed to clarify permitted and prohibited activities of Insurance- Only Persons. Global Atlantic also encourages all producers, regardless of the state(s) in which you are licensed, to review Bulletin Comments or questions may be directed to Global Atlantic Annuity Services at This presentation must be preceded or accompanied by the aforementioned Iowa Insurance Division Bulletin and the NAIC training for the Index Bonus 115 fixed index annuity. Global Atlantic Financial Group (Global Atlantic) is the marketing name for Global Atlantic Financial Group Limited and its subsidiaries, including Forethought Life Insurance Company and Accordia Life and Annuity Company. Each subsidiary is responsible for its own financial and contractual obligations. Annuities are issued by Forethought Life Insurance Company, 10 West Market Street, Suite 2300, Indianapolis, Indiana. Neither Global Atlantic, or its affiliates, or agents provide tax, legal or investment advice. FIA1108 (04-17)