A Tennessee producer recommends replacing a client's existing annuity with a new one. Under Tennessee departmental rules, what obligation applies to the producer in this transaction?

Why A is correct

TDCI's annuity suitability rule, Tenn. Comp. R. & Regs. 0780-01-86, requires producers to act in the best interest of the consumer and to satisfy suitability obligations when recommending annuity contracts, including replacements. The producer must gather and consider the client's profile, ensure the recommendation fits, and document the basis for the recommendation — a waiver signed by the client does not eliminate these duties.

Why the other options are wrong

• B) The rule imposes suitability and best-interest conduct standards on the producer; it does not route individual replacements through advance commissioner approval.
• C) The continuing education requirement is 24 hours every 2 years including 3 hours of ethics; it is not an annuity-replacement trigger under Tenn. Comp. R. & Regs. 0780-01-86.
• D) A client's waiver cannot contract out of the suitability and best-interest obligations; the duties attach to the producer's recommendation itself.

Memory hook

Best interest first: 0780-01-86 governs every annuity recommendation.