IMPORTANT NEWS: FIDELITY & GUARANTY LIFE INTRODUCES IMPROVED SUITABILITY ACKNOWLEDGEMENT FORM

Transcription

1 IMPORTANT NEWS: FIDELITY & GUARANTY LIFE INTRODUCES IMPROVED SUITABILITY ACKNOWLEDGEMENT FORM We are excited to introduce our new Suitability Acknowledgement Form reflecting our new name and containing many key improvements. We are hopeful that you our agents - will find this new form an improvement over our existing form, find it easier to complete, and find it helpful in expediting the suitability review process. A copy of the new form and related material is attached. We launched our enhanced suitability program nationwide on January 1, 2011 to meet standards set forth in the updated NAIC model suitability regulation. Like any newly introduced program, we learned what worked and what needed refinement, and now we want to adopt process improvements in a manner consistent with our commitment towards compliance with the model regulation. In particular we wanted to be responsive to concerns we heard from some of our top producers like our Power Partners and PAIR agents who expressed concern about the length of the form, the appearance of the form, and the clarity and purpose of some of the questions. We evaluated those concerns as well as feedback we received from other sources and then modified the form to make it more focused, user friendly, and effective. Some of the key improvements/changes: We shortened the form so it is now four pages. We removed numbering in the margin of the form that some found overly formal. We removed certain requests for information already on the application or unnecessary such as birth date, telephone number, and dependents. We added certain disclosures to the form such as the fact annuities purchased in a tax qualified account offer no additional tax deferral benefits so we can eliminate follow up with agents solely to ensure this disclosure was made where applicable. We simplified several items such as the risk tolerance question which now offers three simple choices (conservative, moderate, aggressive) rather than a scale from 1 to 10. Similarly, we simplified the investment experience question so now it asks simply whether investments were held five years or less, or greater than five years. We improved the financial information section the numbers part of the form so all the information appears on one page and it is clearer whether the annuity is being purchased out of liquid or non-liquid assets. We streamlined the questions about anticipated distributions so now there is a single question that focuses on the key point whether and when the consumer anticipates withdrawing any amounts potentially subject to surrender charges. We made a number of other edits that should make the form easier to fill out and generally improve the process such as adding a checkbox to indicate if more than one annuity is being submitted, making it clearer that the Rationale section must be filled out in all cases and not just for replacements, and For Producer Use Only--Not For Use with the General Public C Page 1

2 clarifying that we are seeking the federal marginal tax rate of the applicant as opposed to the potentially confusing marginal tax rate. As you go through the form, you will see other subtle enhancements as well. It must be emphasized that the substance and standards of our suitability program will not change. The essence of our suitability program, as described in the Annuity Suitability Instructions and Definitions, and as summarized in our Market Conduct Guide, will remain the same. In fact, we will actually be strengthening our procedures in a couple of respects: You will notice a new question on the form number 16 - inquiring whether purchase of the annuity is connected to or based on information provided during the establishment of a trust sold by the agent, the agent s affiliate, or an attorney provided through the agent or affiliate. This is not intended to apply to bona fide referrals where the agent merely refers clients to an attorney with whom the agent has no financial relationship and the client is free to use that attorney or an attorney of the client s own choosing. However, if the answer is yes to this question, we will need to ensure proper disclosures have been made, the agent is not engaged in the unauthorized practice of law, and the attorney is acting independently in representing the client s interests. Effective immediately the company will require that the sale of any annuity for purposes of Medicaid or VA Aid and Attendance planning be done so at the advice of a qualified attorney. That is, if a primary purpose of the annuity is to help qualify for Medicaid or VA benefits, then question 7 on the form must be marked yes in order to proceed. This is applicable to (a) any FG Immediate Safeguard and (b) a deferred annuity if a primary reason for purchasing the deferred annuity is Medicaid or VA planning as indicated on Question 6 of the form. In either case agents are advised they should mark yes only if (i) the attorney is someone other than the agent, (ii) the attorney represents the client and not the agent, and (iii) the attorney is advising purchase of the annuity and not merely providing general estate planning advice to the client. Fidelity & Guaranty Life is committed to complying with the NAIC model suitability requirements on a nationwide basis and thus the company will not issue a policy unless there is a reasonable basis to determine the annuity is suitable for the consumer. It is your responsibility as a representative of our company, and by law as a licensed insurance agent, to recommend an annuity only if you believe there is a reasonable basis to determine the annuity is suitable, maintain proper records and retain those records for whatever period of years is required by your state or jurisdiction (some extending as long as ten years), and comply in full with the spirit and letter of the model suitability regulation. Attached you will find (i) a copy of the updated Suitability Acknowledgement Form, (ii) an annotated version of the form highlighting some of the important changes, and (iii) updated form Instructions and Definitions. Please review these materials carefully for important information on properly filling out the form to ensure the most expeditious handling of your submitted applications. Please note that after July 1st, the old version of the Suitability Acknowledgement Form will no longer be accepted. No exceptions will be allowed. At Fidelity & Guaranty Life, we are appreciative of your business, and we never take you for granted. We truly hope these changes will improve your experience in working with our company and demonstrate our absolute commitment to superior service for the benefit of our agents and customers. Fidelity & Guaranty Life is the marketing name for Fidelity & Guaranty Life Insurance Company and, in New York only, Fidelity & Guaranty Life Insurance Company of New York. Each Fidelity & Guaranty Life company is solely responsible for its contractual committments. For Producer Use Only--Not For Use with the General Public C Page 2

3 Our new name and logo Checking here helps ensure multiple applications for one household are processed quickly Improved format so it is clear what boxes must be checked Format streamlined; birth date and telephone information removed Asks more clearly for federal tax bracket Replaces 0 10 scale with three distinct choices Simplified so you just check which types of investments and whether they have been held more or less than 5 years Check yes only if agent is not the attorney, the attorney represents the customer and not the agent, and purchase of the annuity is specifically done at the advice of the attorney (see form instructions for details) Adds disclosure statement to obviate need for follow up when tax deferral is checked for qualified annuities

4 Be sure to show funds on this page that will be going into the annuity including any inheritance or other amounts coming into possession of household members Qualified plan assets not otherwise subject to withdrawal penalties are considered non-liquid if under 59½ and liquid if over 59½ Securities are considered non-liquid if not readily convertible to cash without penalty and liquid if easily convertible to cash without penalty Annuities/ Insurance are considered non-liquid if subject to surrender charges and liquid if free of surrender charges Clarifies calculation of Remaining Liquid Assets depending on whether source of annuity funding is liquid or non-liquid assets Breaks out sources of annuity funding as liquid or non-liquid assets

5 Clarified to ask only if adverse changes are anticipated This is a new question asked to determine whether the annuity purchase is related to a trust sold by the agent, an affiliate, or attorney provided by the agent other than bona fide referrals (see form instructions for details) Makes clearer that a rationale is needed in all cases whether or not there is a replacement Replaces three questions on old form with one question aimed at whether it is anticipated any amounts will be withdrawn or distributed from the annuity that will be subject to penalties Space is provided so agents can explain past replacements within the prior 36 months; see instructions on what information is needed to minimize follow up

6 Large bold print ensures consumers understand the annuity is a long term contract subject to surrender penalties

7 Annuity Suitability Instructions and Definitions INSURER: FIDELITY & GUARANTY LIFE INSURANCE COMPANY Suitability - The Company s Requirements Fidelity & Guaranty Life Insurance Company ( Fidelity & Guaranty Life ) requires that all producer recommendations for the purchase or replacement of annuity products should have a reasonable basis as to their suitability for the consumer, based on the information disclosed by the consumer to the producer at the time the recommendation is made. Fidelity & Guaranty Life also requires its appointed producers to make every reasonable effort to present each client with the information necessary to make well-informed decisions relating to the purchase, exchange, or replacement of any annuity product. At a minimum, Fidelity & Guaranty Life producers and their clients should be able to answer yes to each of the questions below prior to completion of any annuity purchase, exchange, or replacement: Does the client understand the key features of the product? Does the client understand the purpose of the annuity? Does the client have adequate remaining funds in case of an emergency? Is the client comfortable there are no likely, foreseeable significant adverse changes in income or expenses during the annuity surrender period that may affect the client s decision to purchase an annuity? If the client is replacing or exchanging another product with this annuity, does the client understand the pros and cons of the exchange, i.e., tax penalties, surrender charges, new surrender periods, loss of existing benefits? Will the consumer benefit from the new annuity s features and enhancements such as any riders selected? Is the complete transaction (including surrender and purchase) suitable? Suitability Reviews Fidelity & Guaranty Life has established home office procedures for reviewing the suitability of annuity sales transactions. The process involves a review of information you submit with every application, including a review of our Suitability Acknowledgement Form ( SAF ). The SAF will be reviewed to determine whether the suitability information provided in connection with the transaction: Appears to reflect a reasonable basis as to suitability and should be accepted for issue; Appears to lack a reasonable basis as to suitability and should be declined; or Requires further review of certain factors and should be held until we complete our review. In situations where additional review is required, Fidelity & Guaranty Life will conduct an elevated review of the suitability information, which may include: Contacting producers by telephone with additional questions; Conducting telephone interviews with applicants; and/or Requesting written responses and/or documentation from producers to support purchase, replacement, or exchange recommendations. Fidelity & Guaranty Life will decline transactions determined, via the suitability review process, to lack a reasonable basis as to their suitability. Also, the Company may offer your client the right to free-look an issued annuity at any time, and may reserve the right to charge back any commissions paid on that transaction. ADMIN 5542 ( ) For Producer Use Only--Not For Use with the General Public Page 1

8 Annuity Suitability Instructions and Definitions INSURER: FIDELITY & GUARANTY LIFE INSURANCE COMPANY Pursuant to the adopted NAIC Model Regulation on Suitability in Annuity Transactions, a licensed insurance producer must have reasonable grounds for believing that the recommendation of the purchase, replacement or exchange of an annuity is suitable based on the insurance needs and financial objectives disclosed by the consumer. It is your responsibility both as an appointed producer for Fidelity & Guaranty Life and as a licensed insurance producer to recommend the purchase, exchange, or replacement of an annuity only after carefully evaluating the unique financial circumstances, objectives and needs of your customer and determining an annuity is suitable. Prior to the recommendation to purchase, exchange or replace an annuity, you are also required to ensure the following: The consumer has been reasonably informed of the material features of the annuity; The consumer will benefit from purchasing the annuity; and The annuity as a whole is suitable for the consumer. When a recommendation involves a replacement or exchange, you are also required to consider the following: Will the consumer incur surrender charges? Will the consumer benefit from product enhancements (such as riders)? Has the consumer had another annuity exchanged or replaced within the preceding thirty-six (36) months? Suitability Acknowledgment Form The Fidelity & Guaranty Life Suitability Acknowledgement Form ( SAF ) is an essential part of the Company s suitability program and is required with every new annuity application. The SAF is designed to help you assess your client s financial situation and determine whether an annuity is suitable by asking many of the questions to be considered prior to making an annuity recommendation, including, but not limited to: What are your client s net worth and liquid assets? How much of your client s liquid assets will remain after the purchase of this annuity? Will your client s income after the purchase of this annuity sufficiently cover his or her living expenses? What is your client s monthly disposable household income? What is the source of the funds being used to purchase this annuity? What is your client s purpose for purchasing the annuity? I.e. what financial goals will this annuity help your client achieve. Does the long term nature of an annuity product fit the client s financial time horizon? Does the client anticipate needing to take any distributions that will be subject to surrender charges? What is your client s investment experience? What other products does your client currently own or has owned in the past? What is your client s federal tax bracket? How much risk is your client willing and able to sustain in exchange for potentially greater gain? ADMIN 5542 ( ) For Producer Use Only--Not For Use with the General Public Page 2

9 Annuity Suitability Instructions and Definitions INSURER: FIDELITY & GUARANTY LIFE INSURANCE COMPANY Documents and Recordkeeping When completing the SAF, remember to complete all blanks and answer all questions. Incomplete forms will cause an application to be deemed Not in Good Order and will delay suitability review and issuance of the annuity. It is okay, when applicable to use NA or N/A to indicate not applicable, or use a null sign ( ) if the amount is zero, but it is generally preferable not to use dashes. Fidelity & Guaranty Life does not permit consumers to opt out of completing the SAF. However, agents may assure clients that this information will not be used by the company for marketing purposes and will only be used by the company to evaluate suitability. Edits to information on the original SAF, including additional information not previously disclosed, must be initialed and dated by the proposed contract owner(s). Always keep copies of the SAF and all other documents, make notes of conversations with clients, and save any other information considered in your suitability assessment so you can demonstrate the basis for your recommendations. This information should be kept for whatever period is required by your state s laws, some extending as much as ten years. Promptly provide additional information to Fidelity & Guaranty Life when requested. Whose Suitability Information should be collected? Below are some basic rules to help in determining whose suitability information should be collected: If the proposed owner of the contract is a natural person, but not the same as the annuitant, the SAF should be completed with the proposed owner s information. If the proposed owner is a revocable trust, the SAF should be completed with the grantor s information. For most other non-natural owners, (i.e., irrevocable trusts, custodial relationships, UTMA or UGMA contracts, corporations) the SAF should be completed with the beneficial owner s information, generally the beneficiary of a trust or custodian account. In situations involving irrevocable trusts, it is important that the SAF explain carefully what is the purpose of the trust and how does an annuity fit the purpose of the trust. Signatures Who should sign the form? Both you and the proposed annuity owner(s) are required to sign the SAF. You should review each point of the form with your client to ensure your client is reminded of the key considerations in purchasing the annuity and acknowledging all of the information provided is complete and accurate to the best of your client s knowledge. In cases where the proposed annuity owner is a non-natural person, the following guidelines generally apply: If the proposed owner is a trust, the trustee must sign the SAF. A copy of the title page of the trust authorizing the trustee to perform financial transactions, and the signature page of the trust should be provided with new business paperwork. If the proposed owner is a corporation, the appropriate corporate representative must sign the SAF. A copy of the Corporate Resolution reflecting the signor has the authority to act on behalf of the corporation should be provided with new business paperwork. If the contract is an UTMA or UGMA, the parent/custodian must sign the SAF. ADMIN 5542 ( ) For Producer Use Only--Not For Use with the General Public Page 3

10 Annuity Suitability Instructions and Definitions INSURER: FIDELITY & GUARANTY LIFE INSURANCE COMPANY Special Instructions for Certain Questions Most questions on the form are self explanatory. However, further instruction is warranted for a few of the questions: Question 7 Medicaid/VA: If a primary purpose of the annuity is to help qualify for Medicaid or Veterans Affairs Aid and Attendance benefits, then there is a question on the form asking whether the purchase of the annuity is being done at the advice of a qualified attorney. This question should be marked yes only if (i) the attorney is someone other than the agent, (ii) the attorney represents the client and not the agent, and (iii) the attorney is advising purchase of the annuity and not merely providing general estate planning advice to the client. Question 16 Trust Sale: There is a question on the form inquiring whether purchase of the annuity is connected to or based on information provided during the establishment of a trust sold by the agent, the agent s affiliate, or an attorney provided through the agent or affiliate. This question should be answered no if the agent merely referred the client to an attorney with whom the agent has no financial relationship and the client is free to use that attorney or an attorney of the client s own choosing. However, if answered yes, the company will need to ensure proper disclosures have been made, the agent is not engaged in the unauthorized practice of law, and the attorney is acting independently in representing the client s interests. Question 17b Replacement Within 36 Months: In cases of replacement, the form asks whether the client replaced or exchanged any life insurance or annuity contracts within the past 36 months, and then requests details. Agents should try to give enough detail to enable the company to assess the effect of any past replacement activity on the current sale. In particular, this includes information about what policies or annuities were previously replaced, whether you were the agent involved in those replacements, why the client is replacing those policies again if the current sale involves the same funds, and any other relevant facts. Page 2 Financial Information: On the financial information page, agents should be sure to include all financial information of the client as it exists prior to purchase of the annuity, including those assets to be used to purchase the annuity. The information should be presented on a consolidated basis for the household including the proposed owner and the owner s spouse or partner or any other adult with whom the owner shares finances. Other Responses: Whenever an agent checks the option of other (e.g., work status, source of income, assets, source of funds), agents should be sure to fill in a specific description to avoid a follow up request for details. Carefully following these instructions will help expedite the suitability review process. ADMIN 5542 ( ) For Producer Use Only--Not For Use with the General Public Page 4

11 Annuity Suitability Instructions and Definitions INSURER: FIDELITY & GUARANTY LIFE INSURANCE COMPANY Suitability Definitions Household: The Owner and Owner s spouse or partner. Or, an adult residing with the Owner and sharing finances (i.e., income and expenses) with the Owner. Owner: A person who will own the annuity contract if issued. Owners have the right to make withdrawals, surrender or change the designated beneficiary. Owners may also be trusts, corporations and other non-natural persons. Monthly household income: After-tax approximate household income of Owner and any spouse/partner including but not limited to earned and investment income, such as salary and wages, social security payments, pension and IRA payments, rental income, and interest and dividends earned on other financial instruments. (Income currently earned on financial instruments that will be used to fund the annuity purchase should not be included.) Monthly household expenses: Approximate household expenses of the Owner and any spouse/partner including but not limited to rent/mortgage payments, utilities, travel and transportation, insurance premiums, healthcare including insurance premiums and any deductibles or copayments, debt repayment, support for dependents, membership costs, vacation costs, charitable contributions and property taxes. Monthly disposable household income: Monthly household income minus monthly household expenses. Emergency: A significant unanticipated change in circumstances during the surrender charge period of the recommended annuity, including potential changes in medical expenses, financial situation, or living arrangements. Total Net Worth: Total assets minus total liabilities (i.e., debts, loans, mortgages or any other liabilities). Liquid Assets: Assets that can be accessed without substantial penalty such as checking and savings accounts, money markets, short term certificates of deposit, and no-load mutual funds. Source of funds: The original source(s) of money used to purchase the annuity and make any subsequent premium deposits into the annuity. Distributions: Payments or withdrawals to be taken from annuity. Risk tolerance: Level of risk a consumer is willing and able to accept for potentially greater returns. Replacement: A transaction in which the a new annuity is to be purchased, and it is known or should be know to the producer, that by reason of the transaction, an existing annuity or life policy has been or is to be: (a) lapsed, forfeited, surrendered, or partially surrendered, assigned to the replacing insurer or otherwise terminated, (b) 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, (c) 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; (d) reissued with any reduction in cash value, or (e) used in a financed purchase. Age: Owner s legal age at time application is signed by the proposed owner. Exchange: A 1035 tax free exchange in which the Owner transfers money from one annuity to another annuity. ADMIN 5542 ( ) For Producer Use Only--Not For Use with the General Public Page 5

12 Product Information ADMIN 5463 Suitability Acknowledgement Form Please check this box if submitting multiple applications for the same household. ANNUITY TYPE DEFERRED ANNUITY IMMEDIATE ANNUITY (check one) (check one) Qualified Non-Qualified Information about the Owners Fixed Indexed Multi-Year Guarantee FG Immediate-Income FG Immediate-Safeguard Owner s Name: (see instructions if Owner is not a natural person) Age: Joint Owner s Name: Age: 1. Work Status: Owner: Retired Employed Unemployed Other Jt. Owner: Retired Employed Unemployed Other 2. Do you or your spouse currently reside in a nursing home or assisted living facility? Owner: Yes No Jt. Owner: Yes No 3. Federal Tax Rate: 0% 10% 15% 28% 33% + 4. Do you currently or have you previously owned any of the products listed below and for how long? 0-5 yrs. > 5 yrs. 0-5 yrs. > 5 yrs. Stocks & Bonds Government Securities Mutual Funds Fixed Annuities Variable Insurance I have not owned any of the above products. Certificates of Deposit 5. What is your risk tolerance? Conservative Moderate Aggressive* Cautious Does not like to take Comfortable exposing some Attempt to achieve maximum on any risk or minimal risk assets to volatility returns takes on additional risk *Annuities are generally NOT considered aggressive savings vehicles. They are not securities and do not constitute a direct investment in the stock market. 6. What are the primary reasons for purchasing this annuity? (please check 1-3 primary reasons) Tax Deferral** Potential for better rate Protection from Market Risk Retirement Income Wealth Accumulation Death Benefit Medicaid or VA Aid and Assistance Immediate Income Estate Planning Other **Annuities purchased in a tax qualified account offer no additional tax deferral benefit over other tax qualified products or accounts. 7. If a primary reason for purchasing this annuity is Medicaid or VA Aid and Assistance planning, are you doing so at the advice of a qualified attorney? Yes No I am not purchasing this annuity for Medicaid/VA planning. ADMIN 5463 ( ) Page 1 of 4

13 ADMIN 5463 Suitability Acknowledgement Form Financial Information (client financial information prior to purchase of annuity) Please provide all the information below and perform calculations in boxes (c),(d),(e),(f),(h) and (j). 8. Source(s) of Income Salary/Wages Social Security Interest Income Dividends Pension/IRA Payments Other Annuities Trust Income Other 9. Monthly Income/Expenses Approximate Monthly Household Income (net after taxes): $ (a) Approximate Monthly Household Expenses: $ (b) Monthly Disposable Household Income: $ (c) (a) (b) = (c) 10. Non-Liquid Assets Value of Home Business Interests Other Real Estate Qualified Plans (if under 59½) Mutual Funds/Brokerage Accounts not readily convertible to cash without penalty Annuities/Insurance cash values subject to surrender penalties Other Total Non-Liquid Assets: $ (d) 11. Liquid Assets Cash Short Term CDs Checking/Savings/Money Market Qualified Plans (if over 59½) Mutual Funds/Brokerage Accounts readily convertible to cash without penalty Annuities/Insurance cash values not subject to surrender penalties Other Total Liquid Assets: $ (e) Gross Value of Assets (Total Non-Liquid Assets plus Total Liquid Assets) Total liabilities, debts, loans (including mortgages) Total Net Worth What is the total of the liquid assets applied to this annuity purchase? What is the total of the non-liquid assets applied to this annuity purchase? Remaining Liquid Assets (after purchasing this annuity) $ (f) (d) + (e) = (f) $ (g) $ (h) (f) (g) = (h) $ (i) $ $ (j)* * (j) = (e) (i) if annuity is purchased with liquid assets (j) = (e) if annuity is purchased with non-liquid assets ADMIN 5463 ( ) Page 2 of 4

14 Other Important Considerations ADMIN 5463 Suitability Acknowledgement Form 12. What is the Source of Funds for this annuity purchase? (check all that apply) Cash or Cash Equivalent Another Fixed Annuity Variable Annuity Life Insurance Cash Value Mutual Fund Redemption Inheritance Reverse Mortgage/Home Equity Loan Other (please specify): 13. With the exception of any surrender charge free annuitizations or withdrawals, when do you anticipate taking distributions from this annuity? (Not applicable to single premium immediate annuities) 0-5 year from now 6-7 years from now 8-10 years from now years from now 15 or more years from now Do not plan to take distributions 14. After purchase of this annuity, do you believe you have enough remaining liquid assets and other sources of income to cover any emergencies or contingencies such as sudden health care needs or increased living expenses? Yes No 15. Do you anticipate any adverse change in assets, living expenses, medical expenses, and/or income during the surrender period of this contract? Yes No (if yes, please explain): 16. Is the purchase of this annuity in any way connected to or based on information provided during the establishment of a trust sold to you by (i) your Fidelity & Guaranty Life agent or affiliate of your FG Life agent or (ii) an attorney provided to you through your FG Life agent or affiliate of your FG Life agent? Yes No 17. Will this annuity replace an existing life insurance or annuity contract? Yes No If so, please answer the following questions: a. What is the surrender charge percentage on the replaced contract(s)? Company Surrender Charge % Company Surrender Charge % (attach additional policies on a separate sheet) b. Have you replaced or exchanged any life or annuity contracts within the past 36 months? Yes No If Yes, please provide details: 18. Will this annuity replace any financial product (other than life insurance or an annuity contract)? Yes No If yes, will you pay a charge, fee or penalty to access these funds? Yes No If yes, identify product, Charge, Fee or Penalty % Rationale (to be completed in all cases whether or not a replacement) 19. Basis for recommendation to purchase this annuity including the basis for replacement of any life insurance or annuity contract: ADMIN 5463 ( ) Page 3 of 4

15 Acknowledgements ADMIN 5463 Suitability Acknowledgement Form I understand an annuity is a long term contract that I should not plan to fully surrender before completion of the surrender charge period. I understand that my principal may be subject to a surrender charge if I surrender or partially surrender my contract before completion of the surrender charge period. I understand that this annuity charges a surrender charge schedule beginning at % and declines over years. I understand surrender charges may apply to withdrawals, withdrawals may be taxable and when made before age 59 ½, may result in tax penalties. I understand annuities that offer bonus features may have higher fees and charges, lower credited interest, and longer surrender charge periods than annuities that do not provide a bonus feature. (if replacement) I understand the benefits and costs of this replacement, including but not limited to surrender charges, possible loss of benefits, tax consequences, product features and enhancements, fees, and expenses. My Agent has provided a comparison of the benefits and restrictions of both contracts. I understand that I should contact my tax professional or attorney for any tax or legal advice. DO NOT SIGN THIS FORM IF ANY ITEM IS LEFT BLANK. PLEASE CAREFULLY REVIEW THE FORM AND SIGN ATTESTING THAT THE INFORMATION IS TRUE AND CORRECT TO THE BEST OF YOUR KNOWLEDGE. Owner/Applicant's signature Date Joint Owner/Applicant's signature Date Agent s Statement I believe the purchase of this annuity contract is suitable after carefully reviewing the suitability information provided to me by the Owner. If applicable, I have discussed the advantages and disadvantages of any replacement or exchange of another annuity contract or life policy. I have reasonably informed the owner(s) of all important features of the annuity and proposed transaction. To the best of my knowledge, the questions on this form have been answered truthfully and I have complied with Fidelity & Guaranty Life suitability requirements consistent with my contractual obligations. Agent signature Agent s Printed Name and Producer Number Date ADMIN 5463 ( ) Page 4 of 4