Life insurance laws and regulatory rules
A big part of being an insurance professional is doing things the right way – in other words, conducting your business in a fair, honest and ethical manner. We want to help make sure you have all the information you need to do so
Know Your Customer
Customer Identification Reminder:
You are required to meet “Know Your Customer” requirements as part of each application for a life insurance policy or annuity contract. A government-issued identification document with a photo should be used to validate the customer’s identity. Please ensure that all parties to the policy have been properly verified and the application is being signed by those with appropriate capacity.
2025 Annual Advertising & Replacement Notice
The Annual Advertising Review Notice is available to remind you of your obligation to submit all advertisements referencing either the Forethought Life Insurance Company or a Forethought life insurance product to the advertising review team (preneedsales.support@gafg.com) for approval prior to use. Failure to comply with state laws concerning the advertising of life insurance and annuities can result in fines, penalties, and other regulatory sanctions as well as termination of your selling agreement with Global Atlantic.
2025 Annual Advertising Review Notice
The Annual Replacement Notice is available to remind you of Global Atlantic’s policy on replacement business.
Coverage Update Notice
Effective September 15, 2023, Forethought Life Insurance Company will no longer accept the Coverage Change Form in connection with requests for additional insurance coverage on existing policies. Policyholders seeking additional preneed insurance will instead be required to complete a new application (eApp or paper) for coverage in the amount, subject to any product or regulatory required minimum amount, needed to fund the cost of any additional prearranged funeral goods and services selected.
Failure to submit a new application with such requests for additional coverage will be pended, and a request for a new application will be sent back to the preneed agent for completion and re-submission. This change is driven by our recent product updates and the corresponding desire to bring added consistency to the upgrade process across all geographies and product lines.
Important Considerations for Irrevocable Assignments
One important aspect of preneed planning is how the planning and funding of the preneed contract might affect a customer’s current or future financial situation, including the need to seek government assistance for covering the costs of healthcare and living arrangements.
Insurance funded preneed contracts typically receive favorable treatment in connection with spending down resources for the qualification for Medicaid and other government assistance programs. That treatment relies on irrevocably assigning ownership of the life insurance policy, typically to a trust.
When contemplating whether an irrevocable assignment is appropriate for your client, please consider the following important aspects:
• The assignment is permanent, irrevocable and eliminates the policy owner’s rights to make financial changes to the insurance policy or annuity. Except in the rare instance when an assignment was made in error, an irrevocable assignment cannot be reversed or undone.
• Ownership of the policy or annuity is transferred to The Forethought Trust which will make payment to the Funeral Firm, or any subsequently designated funeral firm that provides funeral services and merchandise at the time of need. Any excess death benefit proceeds are subject to recovery by a state’s Medicaid or similar assistance program.
• Your client will be waiving all rights under the policy or annuity to surrender it for cash or to obtain a loan against the policy or annuity cash value. Those rights are not assigned to any other person.
• Except in some states and situations, the right to change the designated funeral firm and the right to change the named beneficiary remains with the original owner.
Consistent with the transfer of rights to the Forethought Trust, once a policy has been irrevocably assigned, it will not be eligible for a coverage downgrade, as the owner has forfeited the right to make that request with the assignment.
SSN / TIN Application Requirements – All States
A tax identification number, social security number (“SSN”) for natural persons or tax identification number (“TIN”) for trusts or other non-natural persons, is required for the insured and, if different, the owner on all life insurance or annuity applications.
If an application is received without a tax identification number, we will place the case in pending and contact you to provide the missing requirement. If the owner and/or insured does not have a valid SSN/TIN, we cannot process the application. We will return the application and any premium submitted to you.
Compliance Notice - CA, FL, MI Face Amount Update
California: Initial Face Amount Limit
The maximum initial face amount of an Insurance Policy sold by agents holding a license limited to the sales of life insurance for the payment of funeral and burial expenses will continue to be $20,000 for 2026.
This limit applies to Certificates of Coverage sold by agents holding a limited license as described in the preceding paragraph and governed by California Code, Insurance Code - INS § 1749.01.
Florida: Initial Face Amount Limit
The 2026 Florida preneed Face Amount limit is $28,518 up $735 from last year’s limit of $27,783.
Michigan: Maximum predeath funeral assignment amounts
The maximum assignment amount of a Forethought life insurance policy at issue is $13.870, effective, June 1, 2025, through May 31, 2026.
Virginia: Annual Insurance Compliance Disclosure
Compliance with Virginia law
This notice is being posted so that you comply with 18 VAC 65-30-60.C, which states, “A funeral home shall keep on file a written verification from the insurance company that the insurance or annuity contract complies with §54.1-2820 C of the Code of Virginia.”
In Virginia, Forethought Life Insurance Company offers products with guaranteed and nonguaranteed funeral price options. Products issued prior to 08/23/2023 contain growth based on the Consumer Price Index as required by Virginia law. This growth, which is guaranteed to the consumer, is applied on the first day of each calendar quarter after the Certificate Date. Products issued on or after 08/23/2023 receive growth on a discretionary basis that is credited on the first day of each calendar quarter after the Policy Date.
Forethought Life Insurance Company’s products are in compliance with Virginia laws and have been approved for use by the Bureau of Insurance of the Commonwealth of Virginia. This regulation does not apply to our final expense plans since there is no preneed funeral contract in place.
Texas DOB Notice
October 25, 2021
Important update
Texas law stipulates that when a person provides written directions for the disposition of remains, those directions may not be modified or revoked except through a subsequent written acknowledgment by that person. The same law also provides that any other persons controlling the disposition of a decedent’s remains, shall faithfully carry out the decedent’s directions. Further information on this subject is also provided in Texas Attorney General’s Opinion #JC-0279, which can be found by entering the opinion number in the search window at the state’s website.
Any changes to an insured’s disposition should be made in writing and submitted to Global Atlantic immediately. While Texas law generally prohibits changes in disposition after the death of the insured, there may be limited hardship exceptions to the rule.
All disposition changes made after an insured’s death are recorded and compiled and may be provided for periodic review to the Texas Department of Banking. Any documentation may help with inquiries made by the state. Documents can be sent via fax to (888) 425-2463 or emailed to insuranceClaims@gafg.com.
Agent Market Conduct Guide
The agent market conduct guide was created to assist you in understanding important guidelines and procedures related to market conduct and compliance issues, and help you develop a best practices approach to your business activities. It will provide Global Atlantic’s positions and guidelines, as well as general awareness of state laws and regulations, to help you better serve your customers.
Agent training materials, financial crime
As an agent, you are the first line of defense against the company being a victim of or used to facilitate illegal activities. You are responsible for being alert and escalating suspicious activity to protect yourself and the company from potential reputational, financial, and legal harm. The training provides you with types of financial crime (money laundering and fraud) that the company is susceptible to and red flag indicators for such activity.
Anti-money laundering certification
You are required to complete Global Atlantic’s Anti-Money Laundering Fraud Training every 2 years. Your AML certification expires 2 years after your contract date or if you have been contracted for longer than 2 years, your certification expires 2 years from your last AML certification. We cannot process applications from agents whose AML certification has expired. You will be notified 60 and 30 days prior to your certification expiration.
If you aren’t sure when your certification will be due, contact PreneedLicensing@gafg.com or call (800) 331-8853, select option 5 and then option 1. Or, you may go ahead and review the AML training here and submit your certification to PreneedLicensing@gafg.com to ensure you’re in compliance.
Cross-border sales notice
Cross-border sale definition:
Cross border sales occur when the solicitation process for the sale of a life insurance policy or annuity contract occurs in a state other than the policy or contract owner’s usual state of residency.
Where are cross-border sales permitted:
Global Atlantic currently permits cross border sales upon receipt of an in good order Preneed New Business Options form or Non-Resident Sales Acknowledgement form in all states except where the proposed insured’s or contract owner’s resident state is Arkansas, Massachusetts, Minnesota, Mississippi, New York, Oregon, Washington, or Utah.
Cross-border sale requirements:
To be a permissible cross border sale, the policy or contract owner must have a valid connection to the state of issue. For the purposes of our Preneed and Final Expense business, that means:
- The insured or owner is planning a funeral in the non-residence state where the solicitation occurred,
- The owner/applicant is making or has made burial arrangements with a cemetery in a state other than the insured or owner’s residence state (proof of the cemetery arrangements required),
- The owner owns a secondary residence in the state where solicitation occurred, or
- The owner is not the insured/annuitant and solicitation occurred in the insured/annuitant’s residence state.
Additional requirements include that the application used, and the policy or contract issued, must be the ones approved for use in the state of solicitation; and the policy or contract issued must be delivered in the state of solicitation, not the owner’s residence state.
Replacement and disclosure requirements and forms are based on the state where the solicitation and delivery will occur.
The agent must be licensed and appointed in their residence state and, if different, the state where the solicitation and sale occur.
Summary:
State laws and Global Atlantic business rules prohibit residents of Arkansas, Massachusetts, Minnesota, Mississippi, New York, Oregon, Washington, or Utah from purchasing life insurance or annuity contracts in a state that is not their state of residence.
In scenarios where cross border sales are permissible, the applicant/owner must have a valid nexus to the state where solicitation occurs, and all aspects of the solicitation and sale must occur in the non-resident state. Once issued, the policy or contract must be delivered to the non-resident state.
The rules and requirements surrounding cross border sales can be challenging and there are a number of situations, especially where the applicant/owner and the proposed insured or annuitant are different persons, that can make it difficult to tell: (1) where the solicitation took place; (2) which state’s rules should apply; and (3) which state’s forms should be used. If questions arise regarding how to proceed in such cases, please reach out to your Account Manager or Sales Representative.
NAIC regulations
The National Association of Insurance Commissioners (NAIC) is the U.S. standard-setting and regulatory support organization created and governed by the chief insurance regulators from the 50 states, the District of Columbia and five U.S. territories.
Through the NAIC, state insurance regulators establish standards and best practices, conduct peer review, and coordinate their regulatory oversight.
Stay up to date with industry regulations with the National Association of Insurance Commissioners.
Annuity buyer’s guide and acknowledgement form – M3151
The NAIC Annuity Disclosure Model Regulation, which sets forth requirements for providing Annuity Buyer’s Guides when soliciting annuity business, requires delivery of the guide to preneed annuity customers at the time of sale. The Annuity Buyer’s Guide is intended to provide your families with important information relating to their annuity purchase.
Contract holders will need to confirm receipt of the Buyer’s Guide by signing the Annuity Buyer’s Guide Acknowledgment Form and return it with the completed, signed and dated Life Insurance/Annuity application. Applications for the Preneed Imminent Annuity without the completed acknowledgment form will be pended.
If you have any questions or need to obtain a supply of the Annuity Buyer’s Guide and Acknowledgment Form, contact Customer Service at (800) 331-8853.
*Required in AL, AK, AZ, AR, CO, FL, GA, HI, ID, IA, KY, MA, MO, MT, NV, NJ, NM, NC, NH, OH, OK, OR, RI, SC, TX, UT, VT, WI and WV.
Note: The Annuity Buyer’s Guide does not need to be delivered to clients who qualify for life insurance to fund prepaid funeral benefits. If you are selling the annuity, but are not in one of these states, you do not need to submit an Annuity Buyer’s Guide Acknowledgment form.
Questions?
Our experienced team can help explain any of this compliance and regulatory information.
Phone: (866) 449-3722
Email: preneedsales.support@gafg.com