2. An investment adviser registered under federal or state securities law or an investment adviser representative associated with such an investment adviser.

3. A plan fiduciary, as defined in 29 USC 1002 (21), or a fiduciary, as defined in section 4975 (e) (3) of the Internal Revenue Code.

628.347 (1) (ar) “Material conflict of interest” means a financial interest of an insurance intermediary in the sale of an annuity that a reasonable person would expect to influence the impartiality of a recommendation, but does not include cash compensation or noncash compensation.

628.347 (1) (aw) “Noncash compensation” means any form of compensation that is not cash compensation, including health insurance, office rent, office support, and retirement benefits.

628.347 (1) (ax) “Non-guaranteed elements” means the premiums, credited interest rates, benefits, values, dividends, noninterest based credits, and charges, along with the elements of formulas used to determine any of these items, that are subject to company discretion and are not guaranteed at issue. An element is a non-guaranteed element if any non-guaranteed elements are used in its calculation. For purposes of this subsection, credited interest rates include any bonus.

628.347 (1) (b) “Recommendation" means advice provided by an insurance intermediary, or an insurer if no intermediary is involved, to an individual consumer that results in, or was intended to result in, the purchase, exchange, or replacement of an annuity in accordance with that advice, except that “recommendation” does not include general communication to the public, generalized customer service assistance or administrative support, general educational information and tools, prospectuses, and other product and sales materials.

260,10 Section 10. 628.347 (1) (e) of the statutes is renumbered 628.347 (1) (ag), and 628.347 (1) (ag) (intro.), 3., 8. and 11., as renumbered, are amended to read:

628.347 (1) (ag) (intro.) “Suitability Consumer profile information" means information that is reasonably appropriate to determine the suitability of whether a recommendation addresses the consumer's financial situation, insurance needs, and financial objectives, including all of the following:

3. Financial situation and needs, including the financial resources used for the funding of the annuity debts and other obligations.

8. Existing assets and financial products, including investment, annuity, and life insurance holdings.

11. Risk tolerance, including willingness to accept non-guaranteed elements in the annuity.

628.347 (2) Best interest obligations. (a) When making a recommendation of an annuity, an insurance intermediary shall act in the best interest of the consumer under the circumstances known at the time the recommendation is made, without placing the financial interest of the intermediary or insurer ahead of the consumer's interest. An insurance intermediary has acted in the best interest of the consumer if the intermediary has satisfied the care obligation under sub. (2b), the disclosure obligation under sub. (2c), the conflict of interest obligation under sub. (2d), and the documentation obligation under sub. (2e). The requirements under this subsection and subs. (2b) to (2e) create only a regulatory obligation and do not create a fiduciary obligation or relationship.

(b) Any requirement applicable to an insurance intermediary under this subsection shall apply to every insurance intermediary who exercises material control or influence in the making of a recommendation and has received direct compensation as a result of the recommendation or sale, regardless of whether the intermediary has any direct contact with the consumer. Activities such as providing or delivering marketing or educational materials, product wholesaling or other back office product support, and conducting general supervision of an insurance intermediary do not, in and of themselves, constitute material control or influence.

628.347 (2b) Care obligation. (a) In making a recommendation, an insurance intermediary shall exercise reasonable diligence, care, and skill to do all of the following:

1. Know the consumer's financial situation, insurance needs, and financial objectives.

2. Understand the available recommendation options after making a reasonable inquiry into the options available to the intermediary.

3. Have a reasonable basis to believe the recommended option effectively addresses the consumer's financial situation, insurance needs, and financial objectives over the life of the product, as evaluated in light of the consumer profile information.